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27 February 2019
The Manager, Companies
Australian Securities Exchange
Companies Announcement Centre
20 Bridge Street
Sydney NSW 2000
Dear Sir/Madam,
OZ Minerals 2018 Annual and Sustainability Report
OZ Minerals today announced its results for the full year ended 31 December 2018. Attached is the Appendix
4E and 2018 Annual and Sustainability Report including:
• Directors’ Report
• Remuneration Overview and Report
•
•
FY18 Financial Report
Sustainability Report
Sincerely,
Michelle Pole
Company Secretary and Senior Legal Counsel
OZ Minerals Limited | ABN: 40 005 482 824 | 2 Hamra Drive, Adelaide Airport South Australia 5950
T: +61 8 8229 6600 | F: +61 8 8229 6601 | info@ozminerals.com | www.ozminerals.com
A modern mining company
RESULTS FOR ANNOUNCEMENT
TO THE MARKET
We have provided the announcement to the market results in accordance with Australian
Securities Exchange (ASX) Listing Rule 4.2A and Appendix 4E for the Consolidated Entity (OZ
Minerals) comprising OZ Minerals Limited (OZ Minerals Limited or the ‘Company’) and its
controlled entities for the year ending 31 December 2018 (financial year) compared to the
year ending 31 December 2017 (comparative year).
Consolidated results, commentary on results and outlook
Revenue
Profit after tax attributable to OZ
Minerals Limited equity holders
31 December 2018
$m
31 December 2017
$m
Movement
$m
Movement
%
1,117.0
222.4
1,023.1
231.1
93.9
(8.7)
9.2
(3.8)
The commentary on the consolidated results and outlook, including changes in state of
affairs and likely developments of the Consolidated Entity, is set out on pages 6 to 19 and
within the Financial Review section of the Directors’ Report (page 24).
Net tangible assets per share
Net tangible assets per share
31 December 2018
$ per share
9.03
31 December 2017
$ per share
8.42
In accordance with Chapter 19 of the ASX Listing Rules, net tangible assets per share
represents the total assets less intangible assets, less liabilities ranking ahead of, or equally
with, ordinary share capital, and divided by the number of ordinary shares on issue at the
end of the year.
OZ Minerals Limited | ABN: 40 005 482 824 | 2 Hamra Drive, Adelaide Airport, South Australia 5950
T: +61 8 8229 6600 | F: +61 8 8229 6601 | info@ozminerals.com | www.ozminerals.com
A modern mining company
Dividends
Since the end of the financial year, the Board of Directors has resolved to pay a fully-franked
dividend of 15 cents per share on 26 March 2019. The record date for entitlement to this
dividend is 12 March 2019. The financial impact of the dividend amounting to $48.4 million
has not been recognised in the Consolidated Financial Statements for the year ended 31
December 2018 and will be recognised in subsequent consolidated financial statements.
Dividends announced or paid since 1 January 2017
Record date
Payment date
Fully franked cents per
share
Total dividends
$m
12 March 2019
26 March 2019
3 September 2018
17 September 2018
12 March 2018
26 March 2018
7 September 2017
21 September 2017
10 March 2017
24 March 2017
15
8
14
6
14
48.4
25.8
41.8
17.9
41.8
Independent auditor’s report
The above announcement of the results to the market is based upon the Consolidated
Financial Statements and we have included the Independent Auditor’s Report to OZ Minerals
Limited members in OZ Minerals’ 2018 Annual and Sustainability Report.
OZ Minerals Limited | ABN: 40 005 482 824 | 2 Hamra Drive, Adelaide Airport, South Australia 5950
T: +61 8 8229 6600 | F: +61 8 8229 6601 | info@ozminerals.com | www.ozminerals.com
2018
OZ Minerals Annual
and Sustainability Report
Cover image: Antas mine, Brazil
Inside cover image: Exploration at Carrapateena
CONTE NTS
2018 Snapshot
Message from the Chairman and CEO
Operating Review
Company Strategy
Prominent Hill
Carrapateena
Musgrave Province
Brazil
Exploration and Growth
Governance
Directors’ Report
Financial Review
Remuneration Overview and Report
Sustainability Report
Mineral Resources and Ore Reserves
Financial Report
02
04
06
06
08
10
12
14
18
20
24
33
41
62
90
97
Shareholder Information
141
Cautionary statement
This report contains forward-looking statements that
relate to our activities, plans and objectives. Actual
results may significantly differ from these statements,
depending on a variety of factors. The term ‘material
topic’ is used for voluntary sustainability reporting
to describe topics that could affect our sustainability
performance. By their nature, forward-looking
statements involve risk and uncertainty because they
relate to events and 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.
SNAPSHOT
/ Fourth consecutive year
copper production and
cost guidance met at
Prominent Hill
/ Carrapateena Phase 1
construction completed,
Phase 2 construction
underway
/ Brazilian asset and project
portfolio acquired in Carajás
and Gurupi
/ Progressed to 51%
ownership on West
Musgrave project
COPPER PRICING
$/lb
4.5
3.5
2.5
1.5
US$/lb
A$/lb
Jan 14
Jan 15
Jan 16
Jan 17
Jan 18
Jan 19
GOLD P RICING
$/oz
2,000
1,600
1,200
800
US$/oz
A$/oz
Jan 14
Jan 15
Jan 16
Jan 17
Jan 18
Jan 19
FULL YEAR FINANCIAL RESULTS SU MM ARY
Group revenue
Underlying EBITDA
Net depreciation
Underlying EBIT
Net finance income
Income tax expense
Underlying NPAT
Non-underlying items net of tax
NPAT
Dividends per share (cents)
0 2
2018
$m
1,117.0
540.4
(228.5)
311.9
7.1
(90.5)
228.3
(5.9)
222.4
23
2017
$m
1,023.1
539.4
(218.7)
320.7
8.7
(98.3)
231.1
–
231.1
20
ANNUAL AND SUSTAINABILITY REPORT 2018 135,647
ounces of gold produced
2
0
1
8
S
N
A
P
S
H
O
T
115,998
tonnes of copper produced
ALL ASSETS
Lannavaara, Sweden
Oaxaca, Mexico
Paraiso, Peru
Gurupi Province (CentroGold)
Carajás Province
Antas
Pedra Blanca
Pantera
Musgrave Province
Coompana
Eloise
Prominent Hill Province
Carrapateena Province
Operating mine
Mine in construction
Study phase
Exploration
Prominent Hill
/ Underground operations
/ Copper concentrate (containing gold
and silver)
Carrapateena
/ Project in construction
/ Commissioning in Quarter 4 2019
/ Copper concentrate (containing gold
and silver)
West Musgrave
/ With Cassini Resources Limited
/ Pre-feasibility study underway
Coompana
/ With Mithril Resources Limited
/ Targeting copper/nickel magmatic
sulphide mineralisation
Punt Hill
/ With Red Metal Limited
/ Targeting IOCG mineralisation 50km
south of Carrapateena project
Exploration Alliance
/ With Red Metal Limited
/ Joint exploration of chosen base metal
and gold/silver prospective projects from
Red Metal portfolio
Eloise
/ With Minotaur Exploration Limited
/ Excellent prospectivity for high-grade
Eloise-style Cu-Au and Cannington-style
Pb-Zn-Ag deposits
Antas
/ Small, high grade, open-pit
copper-gold mine
Pedra Branca
/ IOCG project in definitive feasibility stage
Pantera
/ High grade, copper-gold exploration project
CentroGold
/ In pre-feasibility study stage
Paraiso
/ With private Peruvian company Inversiones
Mineras La Chalina S.A.C.
/ Targeting IOCG deposits in the Arequipa
district of southern coastal Peru
Lannavaara
/ With private explorer Mineral
Prospektering i Sverige
/ Targeting IOCG mineralisation in the
Norrbotten district of northern Sweden
Oaxaca
/ With Acapulco Gold Corp
/ Targeting copper/zinc VHMS systems
in southern Mexico
0 3
//
Through 2018,
OZ Minerals’
organisational structure
has evolved for growth.
We’ve refined our
strategy; strengthened
and simplified
governance processes;
and reorganised the
team to support the
forward momentum.
Message from the Chairman and CEO
Innovation and agility
We have implemented many changes to the
culture and wider stakeholder relationships over
the past years and there will be more to come
as the company grows.
We are determined to do things better and
innovate:
/ Prominent Hill built up its data management
and analysis capabilities and is investigating
how big data could be captured and stored by
embedding wireless technology throughout its
surface operations.
/ We investigated opportunities to increase
Prominent Hill’s production to above 3.5 million
to four million tonnes per year once stockpiles
are exhausted in 2023.
/ At Carrapateena, the innovative approach
used to develop community and business
partnerships continued to yield positive
outcomes; the Carrapateena team, together
with Global Maintenance Upper Spencer Gulf,
was a joint recipient of the South Australian
Premier’s Award for Excellence in Working
with Communities.
/ At West Musgrave we worked with PwC – The
difference to develop a new, effective, inclusive
and accelerated style of working on the project.
Partnering with our communities
In 2018, we embarked on developing a flagship
social contribution project under the banner
Educating the Next Generation. We are in the
early stages of developing partnerships with
The Smith Family and the Clontarf Foundation.
The three-year education support program will
create value for the communities where we
operate, build enduring partnerships aligned
with the community’s aspirations, and provide
engagement opportunities for our employees.
Importantly, the flagship banner, Educating the
next Generation, is internationally applicable.
Rewarding our shareholders
As a result of our strong performance in 2018,
the Board declared a total, fully-franked dividend
for 2018 of 23 cents per share, made up of a half
year payment of eight cents per share and an
end-year payment of 15 cents. 2018 earnings per
share totalled 71.5 cents.
Our updated capital management strategy
prioritises shareholder returns while supporting
our growth ambitions.
Dear shareholders,
Realising our growth strategy
in a changing world
This year we safely and significantly advanced our
growth strategy, having prepared the company
for growth over the preceding three years.
We reached or exceeded the production and
cost guidance at Prominent Hill and advanced
Carrapateena, our copper–gold project in South
Australia, with final government approvals
in March 2018 triggering the second stage
of construction. We have taken the first step
towards becoming a global copper core modern
mining company with the successful acquisition
of Avanco Resources, an Australian-based
company with an operating asset and a number
of advanced exploration projects in Brazil, giving
us a foothold in two highly prospective provinces,
Carajás and Gurupi. We continued to evolve
OZ Minerals’ exploration pipeline with new sites
in Sweden and Peru.
A good balance sheet supported by strong
financial results led to a $677.3 million
investment into growth activities; $67.6 million
in dividends to shareholders; and a cash balance
of $505.0 million.
Strengthening the leadership
and structure
Through 2018, OZ Minerals’ organisational
structure has evolved for growth. We’ve refined
our strategy; strengthened and simplified
governance processes; and reorganised the team
to support the forward momentum. The refreshed
strategy will deliver a continued push to innovate
and create value.
Safety is core to OZ Minerals and it is an
integral part of everything we do. Our overall
total recordable injury frequency rate was 7.52
compared to 6.39 in 2017, partially reflecting the
change and rapid growth of activity during 2018
with the construction of a new mine and projects
now in multiple countries. Safety improvement
focussed initiatives are being stepped up in 2019.
The devolved organisational structure has
enabled us to integrate the new Brazilian assets
while retaining a strong focus on operating
the Prominent Hill mine and building the
Carrapateena project. The company’s strategy and
activities are managed by an executive team with
experience in larger, more complex companies
and international operations.
The OZ Minerals Board has the breadth and depth
of experience to navigate us through a future
with global operations. Two new directors recently
joined the Board. Charlie Sartain and Marcelo
Bastos bring extensive international copper mining
experience to the team – both directors have
also worked at senior levels of large international
mining companies in South America.
0 4
ANNUAL AND SUSTAINABILITY REPORT 2018 M
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2018 FINANCIAL & OPERATIONA L H IGHLI GHTS
/ $1,117.0m revenue
/ $222.4m statutory net profit after tax
/ $505.1m cash balance
/ 71.5 cents earnings per share
/ Total dividends for 2018: 23 per share fully franked
/ Fourth consecutive year copper production and cost guidance met at Prominent Hill
/ Carrapateena Phase 1 construction completed, Phase 2 construction underway
/ Brazilian asset and project portfolio acquired in Carajás and Gurupi
/ Progressed to 51% ownership on West Musgrave project
2019 priorities
The outlook for copper remains optimistic with
demand for traditional and new uses of copper
contributing to a projected growth in demand.
A global mine supply shortfall is projected in the
coming years due to declining head grades and
a lack of new mine development. This, combined
with emerging technology which depends on
copper, suggests that it will remain a sought-
after commodity.
In 2019, we will deliver value for shareholders
and other stakeholders – employees,
communities, governments and suppliers – by:
/ strengthening our approach to safe work
and further embedding it in our operations
/ fostering innovation and collaboration in
the business and developing a modern
mining culture
/ reliably and consistently delivering Prominent
Hill’s mine plan and seeking ways to extend its
life so that it continues to support future growth
/ commissioning Carrapateena on schedule
for Quarter 4 2019
/ optimising plans to develop our Brazilian assets
/ completing the pre-feasibility study for West
Musgrave, our copper nickel project with
Cassini Resources in Western Australia
/ developing a ‘phase two’ expansion plan
for Carrapateena
/ maintaining the future growth pipeline
through a province approach and seeking
acquisitions that provide foot-holds into
priority mineralised belts.
Our achievements of today and tomorrow
would not be possible without the support
of our shareholders, customers, partners,
communities and our people. We thank you
for your support and are pleased to lead
OZ Minerals on the journey towards becoming
a modern mining company.
Rebecca McGrath
Chairman
Adelaide, 27 February 2019
Andrew Cole
Managing Director and CEO
Adelaide, 27 February 2019
0 5
e r n Mining Com
pa
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Value
Creation
How We Work To g e t
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0 6
Customer Focus Lean & Innovative Devolved & Agile Global Copper Capital Discipline ANNUAL AND SUSTAINABILITY REPORT 2018 Company strategy
We refined our strategy in 2018 and kept the focus on creating stakeholder value in
ways consistent with the How We Work Together principles. Delivering to strategy
through 2018 saw us moving to realise our vision of becoming a global copper-
core modern mining company that delivers superior value across multiple operating
assets with diverse operations and project pipeline.
Creating value is at the heart of our strategy. It means creating value for all of our
stakeholders – shareholders, employees, communities, governments and our supply
partners. This concept of value creation has been embedded into our governance
system through our process standards and how we assess risk.
Lean and innovative
Running a lean business encourages our people
to find new and better ways to work, as we
innovate to deliver bottom-half cost curve and
superior production performance. We embrace
new ideas and new thinking and are willing to be
the first to try something which might add value.
We test ideas safely and efficiently, fail fast and
look beyond our own industry for inspiration.
In 2018, we simplified our process standards to
complement our governance system and ensure
high compliance standards. The simplified process
standards allow our assets to adapt to their local
conditions and encourage our employees to use
their innate skills, be curious and innovate.
Customer focus
We provide a quality product based on our
customers’ needs and market demand. Our
people know our customers well and we want
to be partners to their businesses.
How We Work Together
Our How We Work Together principles are the
glue that binds our company. Our people use the
principles to create an inclusive culture that drives
diversity and results in superior performance. We
work safely, unlock innovation, embrace change
and consistently deliver.
Winning the 2018 Premier’s Award for Excellence
in Working with Communities acknowledges
how our How We Work Together principles have
been leveraged to generate shared value for our
community stakeholders.
Global copper
Our acquisition of Avanco Resources Limited,
which has an operating asset and projects in
Brazil, delivers on our strategy of developing a
global portfolio of copper assets. The acquisition
immediately added to our copper production
profile and provided us with expansion options in
the highly prospective Carajás iron-oxide–copper–
gold province and Gurupi Greenstone Gold Belt
in Brazil, enhancing our portfolio at every stage of
the asset pipeline.
Capital discipline
We responsibly use shareholder funds for long
term success, only spending on things we
need and that represent the best value. Capital
discipline is applied across all our projects,
regardless of their stage, and we continue to look
for opportunities to reduce costs where we can.
Having a strong balance sheet gives flexibility
and agility. We chose to fund the acquisition of
Avanco partly with scrip, to maintain a strong
balance sheet through the development of
Carrapateena, and to give flexibility for the future.
We updated our capital management strategy
in 2018 to prioritise shareholder returns while
supporting our growth strategy and maintaining
a disciplined approach to capital allocation.
Devolved and agile
A devolved organisational model is an important
enabler of our strategy and allows us to efficiently
bring more assets into the company from
different parts of the world or potentially exit
assets in future. Our assets remain autonomous
and accountable, while the corporate centre
undertakes work on strategy; customers and
owners; assurance; and growth. Our devolved
model unlocks discretionary effort and value,
as our people are accountable and encouraged
to collaborate to make better and more agile
decisions. During the year, we reorganised our
Executive Committee team’s areas of responsibility
so we can continue to be flexible and scalable as
our business grows.
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Prominent Hill
Prominent Hill is a copper–gold–silver
mine located in South Australia,
130 km south-east of Coober Pedy.
Prominent Hill continues to deliver
consistent and reliable results, meeting
copper production and cost guidance for
the fourth consecutive year. Prominent
Hill generated $522.0 million in free
cash and enables our growth activities.
Highlights for 2018
/ We achieved cost guidance and annual
copper and gold production.
/ The mine life was extended to 2030.
/ The open pit mine was safely closed after more
than 100 Mt of ore was mined over 10 years.
/ We successfully transitioned the mine to an
underground-only operation.
/ We completed the third and fourth
underground declines, enabling a ramp up
in 2019.
/ Operational efficiencies increased as we
commissioned surface fleet rehandling activities.
/ We began a mine expansion study, with
drilling expected to begin in Quarter 1 2019.
/ Construction of a new transmission line
commenced.
/ Our mine-to-mill modelling software was
upgraded to improve scenario analysis capability
and facilitate faster operational decision-making
and improved strategic planning.
Safe, consistent and
reliable operations
Prominent Hill’s transition to an underground-only
mining operation was completed in early 2018.
Thiess Mining, the contractor for open pit mining
at Prominent Hill, was awarded a five-year
contract to provide run-of-mine management,
crusher feed and ore-rehandling services.
Underground mining will ramp up to 3.7-4.0 Mtpa1
in 2019 as the third and fourth declines were
completed during the year. The plant at Prominent
Hill will remain at full capacity until mid-2023,
supplemented by ore from the open pit stockpiles.
In early 2018, a power strategy was developed
for our South Australian assets. The first phase
included the development of a transmission line,
which is being constructed under a build, own,
operate, and maintain agreement with ElectraNet.
Construction will commence in 2019 and the
transmission line is expected to be operational
in mid-2020.
0 8
Safety is a core value at Prominent Hill. The
TRIFR for 2018 was 5.78, which was higher
than the previous year. Safety of our people
will continue to be a key focus for Prominent
Hill through our safety leadership, our systems
of work, and our workplace attitudes where all
employees and contractors take action to ensure
effective controls that address hazards are in
place. Key initiatives included:
/
implementing collaborative safety training
with the South Australian ambulance service
/ undertaking a nationally recognised
auditor training course to effectively audit
site compliance against the OZ Minerals
performance standards and embrace best
practice initiatives
/ developing skills for Prominent Hill’s
emergency response team through
participation in the South Australian Mines
Emergency Rescue competition
/ commencing a behavioural safety program
to support safety leadership and a strong
safety culture aligned to organisational values
/ establishing a site-based health and
wellbeing centre for physiotherapy and
counselling services.
Working in the community
Creating value for our stakeholders is an enduring
priority at Prominent Hill. In 2018, we developed
a partnership with the local Coober Pedy Area
School to support and mentor young people in
the local area.
We also worked together with Global
Maintenance Upper Spencer Gulf and the
State Government’s Industry Capability Network
to encourage local businesses to participate in
our operations.
Our focus in 2019 is to:
/ consistently deliver strong results with C1
costs in the bottom half of the cost curve
/ construct the Malu Paste Plant. This will
replace the Cemented Hydraulic Fill Plant and is
scheduled to be completed in Quarter 4 2019
/ progress internal mining studies to investigate
options for delivering higher value mine plans.
This includes the Prominent Hill expansion study
where drilling is to commence in early 2019
/ complete a feasibility study on haulage options
/ steadily ramp up underground mining to
3.5–4.0 Mtpa1
/ complete gold-only ore processing trials with
a view to test recoveries and mill throughput.
//
The Prominent Hill
mine has achieved
copper guidance for
four consecutive years.
It continues to generate
value through strong
operational discipline
and consistent, safe,
and cost effective
production.
1 To be read in conjunction with cautionary
statement on p. 1.
2 Please refer to the Mineral Resources
and Ore Reserves section (page 90) for
full disclosure.
ANNUAL AND SUSTAINABILITY REPORT 2018 O
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130,856
ounces of gold produced
110,111
tonnes of copper produced
OvER vIEW
Location: 650 km north-west of Adelaide,
130 km south-east of Coober Pedy
Product: Copper concentrate
(containing gold and silver)
Mining method: Open pit transitioned
to underground-only mine
Processing method: Conventional crushing,
grinding and flotation
Mineral Resources: 150 Mt at 1.0% copper,
0.7 g/t gold, and 2.9 g/t silver2
Reserves: 69 Mt at 1.0% copper,
0.6 g/t gold, and 3 g/t silver2
0 9
Delivering
construction on schedule
Commissioning in
Quarter 4
2019
OvER vIEW
Location: 250 km south-east of Prominent
Hill and 160 km north of the regional centre
of Port Augusta in South Australia
Status: Construction underway,
commissioning scheduled for Quarter 4
2019, project then ramps up to steady
state production
Resources: 134 Mt at 1.5% copper,
0.6 g/t gold3
Reserves: 79 Mt at 1.8% copper,
0.7 g/t gold3
Robust financials: NPV ~$910 million;
IRR ~20% on post tax basis at copper/gold
$A consensus pricing4
1 0
ANNUAL AND SUSTAINABILITY REPORT 2018 Carrapateena
Our Carrapateena copper–gold project
is on schedule for commissioning
in Quarter 4 2019 after significant
construction during the year. After
commissioning, the project will ramp up
over eighteen months to a steady state
production of 4.25 Mtpa.
Carrapateena is an iron-oxide–copper–gold (IOCG)
deposit located in the highly prospective Gawler
Craton in South Australia. The project is one of
Australia’s largest new mining developments and
has an estimated mine life of 20 years.
Highlights for 2018
/ We received all primary and secondary approvals.
/ Phase one of construction began and was
completed, including the aerodrome, airstrip
and accommodation village.
/ Phase two construction began, which includes
the minerals processing plant, non-processing
infrastructure, the tailings storage facility and
installation of the communications network.
/ The team received the Premier’s Award for
Excellence in Working with Communities.
/ Underground development rates remained on
schedule because of a smooth transition to the
new underground mining contractor.
/ The total decline development reached over
10,600 m at the end of January 2019.
/ We strengthened relationships with the local
community, pastoralists and traditional owners.
/ Key leadership appointments were made in line
with the operational readiness plan.
Construction of the minerals processing plant
was brought forward as part of an optimised
development strategy. We also improved safety
and commenced the upgrade of the existing
southern access road in line with this strategy.
Tailings storage facility construction was deferred
until Quarter 4 2018 and construction of the
western access road was deferred until 2020.
Safety focus
Safety is a core value for the project across
operational and construction teams. In 2018 the
TRIFR was 7.52, an improvement on the previous
year. The team implemented the Stand Together
for Safety initiative, which saw contract partners
and the project team align safety messaging and
activities across the site.
Working in the community
We have continued our commitment to further
developing partnerships with the local community,
pastoralists and traditional owners.
More than 40 local businesses have delivered
work for the project through a partnership with
the Global Maintenance Upper Spencer Gulf and
Industry Capability Network, that is designed to
maximise local industry and business participation.
The Partnering Management Committee, made
up of members of the Carrapateena team and
the Kokatha Aboriginal Corporation, continues
to meet on a quarterly basis to operationalise
the Native Title Mining Agreement.
Land access agreements with pastoralists from
surrounding properties have been successfully
negotiated. A number of community roadshows
were also held throughout the year to update
the local community on the project’s progress.
Our focus for 2019 is to:
/ commission and have first concentrate
by Quarter 4 2019
/ hand over the project from construction
to operations in Quarter 4 2019
/
install the underground materials
handling system
/ complete improvements to the southern
access road
/ complete construction of all five surface
vent shafts
/ energise the powerline and substation
onsite in Quarter 2 2019
/ continue expansion studies.
Carrapateena province expansion
Carrapateena expansion studies started in 2018
and were focused on optimising the Carrapateena
resource and ‘life of province’ planning. These
studies investigated how to optimise the sub-level
cave inventory (a possible block cave transition for
the lower half of the Carrapateena resource) and
included options for mining nearby lower grade
mineralised zones. Study outcomes are expected
to be available in Quarter 1 2019.
In 2018, we undertook resource delineation
programs at the Fremantle Doctor and Khamsin
prospects which returned broad intersections of
mineralisation and extended grade outside of the
previously modelled mineralised domains.
Four holes were drilled at Fremantle Doctor, all
of which returned intersections of chalcopyrite-
dominant copper mineralisation. The recent
drilling was incorporated into a re-interpretation
and subsequent release of a maiden inferred
resource of 104 million tonnes at 0.7% Cu
and 0.5 g/t Au1. The Fremantle Doctor deposit
provides another valuable input into the
company’s ‘life of province’ planning and will help
inform expansion studies currently in progress.
At Khamsin, the four holes drilled in 2018 all
returned broad intersections of zoned bornite
and chalcopyrite mineralisation. A standout
intersection of 402.6 m at 1.38% Cu and
0.27 g/t Au in DD18KMS031 (from 735m)2
extended the previously interpreted high grade
domain to the south-west. The drilling results
are currently being used to help model the area’s
geology, which will improve understanding of
the project and guide further drilling.
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Carrapateena is
one of Australia’s
largest undeveloped
copper deposits. It
will be a 4.25 Mtpa
underground sub-level
cave operation and
have an estimated
mine life of 20 years.
Carrapateena is located
in a highly prospective
region, with known
mineralisation
at Khamsin and
Fremantle Doctor.
1 Detailed information required under JORC
2012 can be found in the Fremantle Doctor
project mineral resource statement and
explanatory notes – 12/11/2018.
2 Detailed information required under JORC
2012 can be found in the 2018 Quarter 2
quarterly report – 19/07/2018.
3 Please refer to Mineral Resources and Ore
Reserves section (p. 90) for full disclosure.
4 This information was extracted from the
Carrapateena project Feasibility Study
Update report released to the ASX on 24
August 2017 and is available at 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.
1 1
Musgrave province
The Musgrave province is a highly
prospective region spanning Western
Australia and South Australia.
OZ Minerals has two projects in the
area, the West Musgrave project with
Cassini Resources which is currently
in the pre-feasibility study stage, and
the East Musgrave exploration joint
venture with Woomera Exploration Ltd
that targets magmatic copper–nickel
sulphide systems.
West Musgrave project
The West Musgrave project is located in
Western Australia, near the South Australian
border. It is Australia’s largest undeveloped
copper–nickel project.
West Musgrave contains three known deposits –
Nebo, Babel and Succoth, and the One Tree Hill
prospect. The further scoping study completed in
2017 proposed developing the Nebo and Babel
deposits as a low cost, long life, open pit mine.
The most financial potential was seen in the
10 Mtpa case, which generated an eight year
mine life and an annual average net cash flow
of $120–$150 million1.
//
The Musgrave area is
an exciting new mineral
province with attractive
near-mine and district
opportunities.
WEST MUSGR AvE O vER vIEW
Location: Western Australia near the South
Australian and Northern Territory border
Earn-in agreement: Cassini Resources
49% ownership; OZ Minerals 51% ownership
Deposit: Nebo, Babel, Succoth
Status: West Musgrave project, currently
in pre-feasibility study
Resources: Nebo and Babel contain
a combined indicated and inferred
mineral resource estimate of 283 Mt
at 0.39% copper and 0.36% nickel1.
Succoth inferred mineral resource estimate
is 156 Mt at 0.6% copper2.
Indicative project production metrics:1
– Processing capacity: 10 Mtpa
– Mine life: 8 years
– Average copper production: 25–30 ktpa
– Average nickel production: 20–25 ktpa
– Average cobalt production: 700–1,000 tpa
Exploration program: One Tree Hill
prospect and the Succoth deposit
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A pre-feasibility study (PFS) on the project
is almost complete. It focuses on improving
metallurgical recoveries, lowering costs for non-
process infrastructure, and resource conversion.
OZ Minerals is leading the study and our joint
venture partner, Cassini Resources, is managing
on-the-ground activities. The PFS is scheduled for
completion in Quarter 2 2019. A parallel regional
exploration program led by Cassini Resources is
also underway and focuses on the One Tree Hill
prospect and Succoth copper deposit.
2018 highlights
/
In 2018, we progressed to 51% ownership
by spending $22 million on the project.
OZ Minerals has the option to progress to 70%
ownership by spending a total of $36 million.
/ Early results from the PFS metallurgical test work
are encouraging and showed improvement in
copper and nickel recovery and an increased
grade of copper concentrate.
/ The regional exploration program revealed a
second significant intersection of copper and
nickel mineralisation at the Yappsu prospect,
just six kilometres east of Nebo and Babel.
This demonstrates the province’s potential.
/ We completed the 2018 resource drilling
program ahead of schedule which has
enabled the 2019 infill drilling program to
be brought forward.
/ We completed the exploration program at
Succoth to test geological interpretation and
inform 2019 exploration drilling.
/ Key leaders were appointed and our team has
been given resources to deliver the PFS, resource
assessment, community engagement and
agreements, and approval programs.
Additional highlights from the PFS
/ A water modelling program of regional
groundwater resources was completed.
/ We completed the geotechnical drilling
program around the current pit outline.
/ We began the engineering study, which includes
processing and non-processing infrastructure.
/ Expressions of interest have been sought for
power supply solutions.
/ The West Musgrave camp was expanded to
support increased on-ground activity.
The team has also been working on strengthening
relationships with the local community and
traditional owners. A number of community
meetings were held during the year and we
began a cultural heritage program to identify
areas of cultural significance. The team is working
alongside the traditional owners to develop a
shared vision of what the project could look like.
Our focus for 2019 is to:
/ complete the PFS
/ further strengthen relationships with
the local community
/ progress project approvals
/ develop a mining access agreement with
the traditional owners
/ complete the inaugural ore reserve
/
implement new ways of working to pilot
how OZ Minerals undertakes major projects.
East Musgrave
The East Musgrave project with Woomera
Exploration targets magmatic nickel–copper
sulphide systems similar to those of the Nebo-
Babel deposits in West Musgrave. The Project
is located in the Musgrave province, 500 km
east of the West Musgrave project in South
Australia’s far north.
After drilling is complete, OZ Minerals has
the option to earn up to 51% of the project
by spending $2.5 million within 18 months.
An additional spend of $5.0 million within
two years will allow OZ Minerals to progress
to 75% ownership.
2018 highlights
/ We began negotiations for a Native Title
Mining Agreement with Tjayuwara Unmuru
Aboriginal Corporation, traditional owners
of East Musgrave.
/ We completed an electro-magnetic survey
and defined six targets for drill testing.
/ We began drill testing of six targets to look
for magmatic nickel–copper sulphide systems
similar to those of the Nebo-Babel deposits
in West Musgrave. We expect results in
early 2019.
EAST M USGRAvE
OvER vIEW
/ Location: Musgrave province,
500 km east of the West
Musgrave project in far-north
South Australia
/ Status: Copper–nickel
exploration project
/ Earn-in agreement:
Woomera Exploration Ltd.
/ Earn-in conditions: OZ
Minerals to fund EM survey
and approximately 4,000 m
of drilling. After drilling is
complete, OZ Minerals can
elect to earn 51% equity in
the project by achieving a
total spend of $2.5 million
in exploration activity within
18 months. An additional
$5.0 million for further
exploration and drilling will
secure a total 75% equity
in the project within the
following two years.
1 This information was extracted from the West Musgrave project to progress to pre-feasibility study report released to the ASX on 14 November 2017 and is available at
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 was extracted from the Cassini Resources’ ASX Release entitled Maiden Succoth Resource Estimate dated 7 December 2015 and is available at 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.
1 3
5,887
tonnes of copper produced at Antas1
4,791
ounces of gold produced at Antas1
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Brazil
In August 2018, OZ Minerals completed
an off-market takeover of the Australian-
listed company Avanco Resources
Limited (Avanco) for a net purchase
consideration of $428.3 million.
With an operating mine and a number of
advanced projects in Brazil, this represented
a strategic opportunity for OZ Minerals to
diversify our portfolio and add to our organic
growth pipeline.
Brazil is a stable operating jurisdiction and
supports mining. This acquisition has given
us a major foothold in two world class mineral
provinces: the Carajás Copper Region and the
Gurupi Greenstone Belt.
On completion of the takeover, a small
dedicated team has been focused on integrating
the Brazilian assets into OZ Minerals, optimising
the asset portfolio, and introducing the required
systems and processes to align with our
operating philosophy.
Avanco and OZ Minerals shared a strong cultural
alignment and we retained Avanco’s in-country
Brazilian management team and employees. They
have a proven track record of project delivery and
hold strong relationships with local stakeholders.
Brazilian assets
The Brazilian assets have been part of the
OZ Minerals portfolio for six months. In line
with good practice, a review, verification and
improvement process is underway, applying
the OZ Minerals value lens to prioritise and
phase project development.
The Carajás province is a premier mineral
province located in northern Brazil. It hosts the
world’s largest concentration of quality, large
tonnage IOCG deposits.
We hold an asset and two projects in the
Carajás province:
/ Antas – an operating copper–gold mine
/ Pedra Branca – an IOCG project currently
in the definitive feasibility stage
/ Pantera – a high-grade copper–gold
exploration project covering approximately
100 square kilometres.
The Gurupi province is an underexplored and
emerging geological region that hosts several
large gold deposits. The province is located in
the Brazilian state of Maranhão, between the
cities of Belém and São Luis. It is close to existing
infrastructure, including sealed roads, power,
water and skilled labour.
We hold one development project in the Gurupi
province, CentroGold. This gold project is
currently in the pre-feasibility study stage.
Antas
Antas is a small, high grade, open-pit copper
–gold mine located in the state of Pará, in
northern Brazil. The mine produced 5,887 tonnes
of copper and 4,791 ounces of gold in 20181.
Antas has been operating since July 2016 and
successfully completed the ramp up to full
production on schedule. The processing plant is
operating above 800 ktpa and has been designed
to support increased capacity.
2018 highlights
/ Management of the asset was transitioned
to OZ Minerals effectively.
/ We completed over 4,500 metres of resource
delineation drilling.
/ Optimisation improvements resulted in greater
efficiencies and cost savings.
/ We commenced a review of the open pit
mineral resource and mine plan.
/ 16 of 20 trainees from the company training
program were employed at Antas, a record
for the company.
Our focus for 2019 is to:
/ maintain high performance and pit
operating efficiencies
/
implement the optimisation opportunities
identified in 2018
/ complete a review of the open pit mineral
resource and mine plan
/ continue mine life extension work with
a near-mine exploration program
/ continue to integrate OZ Minerals’
governance structures
/ strengthen relationships with local community.
ANTAS OvER vI EW
/ Location: Carajás province.
Northern Brazil, in the state
of Para, 25 km south-east
of Parauapebas
/ Product: Copper concentrate
containing gold
/ Mining method: Open pit,
drill and blast
/ Processing method:
Conventional crushing,
grinding and flotation
1 Antas metrics represent production
for the second half of 2018 only.
1 5
Pedra Branca
Pedra Branca is an IOCG project located in the
southern part of the Carajás province, 100 km
south of Paraupebas.
The project comprises two adjacent high-grade
copper–gold deposits: Pedra Branca East and
Pedra Branca West. In 2017, a pre-feasibility study
conducted by Avanco recommended a 1.2 Mtpa
underground mine targeting Pedra Branca East
and pre-production capex of ~US$158 million1.
Annual production is estimated at 24 kt copper
and 16 koz gold1.
A definitive feasibility study (DFS) is currently
underway and focuses on further refining the
mine plan and construction costs, and completing
basic engineering.
2018 highlights
/ We progressed the DFS work.
/ Early site works began after we received
key provisional licences.
/ Resource delineation drilling began.
/ A water tank was installed to provide
20 farming families on nearby land with
access to fresh water.
Our focus for 2019 is to:
/ progress the DFS, including the mineral
resource update, mining studies and basic
plant engineering.
PEDRA BRANCA
OvER vIEW
/ Location: Carajás province.
Northern Brazil, in the state
of Para, 100 km south of the
Parauapebas and 30 km east
of Canaã
/ Project: High grade
copper–gold deposits
/ Status: DFS underway
/ Proposed method:
Underground mine
Pantera
Pantera is a high-grade copper–gold exploration
project covering approximately 100 square
kilometres in the Carajás province. It is located
about 110 km west of Pedra Branca and is close
to infrastructure.
OZ Minerals has the option to acquire
100% ownership of the project from Vale
for US$20–$35 million (total investment)
over a 7–10 year period.
In 2018 an initial 5,000 m resource delineation
drilling program yielded a maiden inferred
mineral resource estimate of 20.8 Mt at
1.7% copper and 0.2 g/t gold2.
Our focus for 2019 is to continue resource
delineation drilling and complete a conceptual
mine design study.
PANTER A OvER vIEW
/ Location: Carajás province,
north-eastern Brazil
/ Status: High grade copper–
gold exploration project
/ Maiden inferred mineral
resource estimate:
~20.8 Mt at 1.7% copper
and 0.2 g/t gold2
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CentroGold
CentroGold is one of the largest undeveloped
gold projects in Brazil. It is located in the
Brazilian state of Maranháo, between the cities
of Belém and São Luis, and is close to existing
infrastructure, power and water. The project
comprises 1,370 square kilometres of tenements
and lies within the Gurupi Greenstone Gold Belt.
The project is currently in the pre-feasibility study
(PFS) stage and hosts three deposits: Blanket,
Contact and Chega Tudo.
The larger CentroGold area has exceptional
exploration potential. Interpretation of a vast
database of historical information, including
drilling and numerous studies, suggest that
there is significant potential for new discoveries.
2018 highlights
/ We continued resource delineation drilling
into the Contact deposit.
/ We began the ’Hill of Value’ optimisation
exercise to identify the optimal project value
and scale.
/ Avanco Resources completed a CentroGold
scoping study that demonstrated potential
for a high-grade, low capex project.
Our focus for 2019 is to:
/ continue the approvals process and engage
local communities
/ complete the pre-feasibility study
/ decide whether or not to progress to
feasibility study.
CENTROGOLD
OvER vIEW
/ Location: Gurupi Province.
Northern Brazil, in state of
Maranháo, between Belém
and São Luis
/ Status: Pre-feasibility study
underway, scheduled for
completion mid-2019
/ Project: High grade copper–
gold exploration project
/ Proposed method: Open
pit mine, carbon-in-leach
processing plant3
/ Estimated mine life:
11 years3
/ Estimated annual
production:
~129,900 ounces3
1 This information is extracted from the announcement by Avanco Resources Limited titled Positive pre-feasibility study for Pedra Branca, released on 26 May 2017. OZ Minerals is not aware of
any new information or data that materially affects the information included in the announcement. OZ Minerals confirms that the form and context in which the Competent Person’s findings are
presented have not been materially modified from that announcement.
2 This information is extracted from the announcement by Avanco Resources Limited titled Maiden Pantera MRE pushes Avanco’s Carajás resource base beyond 1 Mt of contained copper, released
on 19 March 2018. OZ Minerals is not aware of any new information or data that materially affects the information included in the announcement. OZ Minerals confirms that the form and context
in which the Competent Person’s findings are presented have not been materially modified from that announcement.
3 This information is extracted from the announcement by Avanco Resources Limited titled CentroGold – scoping study, released on 10 April 2018. OZ Minerals is not aware of any new information
or data that materially affects the information included in the announcement. OZ Minerals confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified from that announcement.
1 7
Exploration and growth
OZ Minerals’ dynamic pipeline of
growth projects progressed and
expanded during 2018.
Three new earn-in agreements were signed:
East Musgrave with Woomera Exploration
Limited; Lannavaara with Mineral Prospektering
i Sverige AB; and Paraiso with Inversiones Mineras
La Chalina S.A.C. The acquisition of Avanco
Resources Limited provided OZ Minerals with the
second largest exploration portfolio in Brazil and
an active earn-in agreement with Vale S.A. on the
Pantera project (see Brazil, p. 16 for details).
OZ Minerals withdrew from the Alvito earn-in
agreement in Portugal following drill testing of
eight target areas. Drilling confirmed the presence
of an IOCG system but no significant intersections
were returned.
The Mount Woods earn-in agreement with
Minotaur Resources on exploration licences
surrounding the Prominent Hill mining lease
concluded by mutual agreement, following a
second round of electromagnetic surveying and
testing of geophysical and structural targets. No
significant intersections of targeted iron-sulphide–
copper–gold mineralisation were returned during
the program’s second year. The team is continuing
to review previous work in the Prominent Hill area
and investigate new exploration techniques.
Ongoing partnerships with Amazon Web Services
are modernising the way OZ Minerals manages
and maintains exploration data. In 2018 data
was migrated to platforms with expanded data
storage, access and analytical capabilities. In 2019,
the partnership will begin developing analytical
algorithms and processes which will help us to
interpret multidisciplinary data sets and streamline
exploration and decision-making processes.
OZ Minerals, in collaboration with Unearthed
Solutions, announced the Explorer Challenge –
a unique and innovative approach to advancing
exploration on the tenements surrounding
Prominent Hill. The crowd-sourcing challenge
invites competitors to find new and innovative
techniques and models that target base metal
mineralisation in the prospective Gawler
Craton. As part of the initiative, OZ Minerals
will release its database amassed from over
20 years of exploration to the public for analysis,
data manipulation, and target generation.
Data scientists and geoscientists alike are invited
to compete for a one million dollar prize pool.
The competition was announced in December
2018 and will run from February to May 2019.
1 8
Exploration portfolio
Coompana with Mithril Resources consists
of seven exploration licences in South Australia’s
far western Coompana province. OZ Minerals
is working with the Far West Coast Aboriginal
Corporation on a Native Title Mining Agreement
for exploration. In 2017, the South Australian
Department of State Development in collaboration
with PACE Copper conducted a significant
number of airborne and ground geophysical
surveys in the area. A scientific drill program was
sponsored by Geological Survey of South Australia
in conjunction with Geoscience Australia and the
results have been released publicly for review.
Punt Hill with Red Metal Ltd is targeting
IOCG mineralisation in the area adjacent to
Carrapateena. Previous work on Punt Hill
uncovered many examples of IOCG mineralisation
and one of the new prospects shows a number
of geophysical similarities to Carrapateena
deposits. The team initially focused on obtaining
local level agreements with traditional owners and
landowners. A 6,000 metre drilling program that
focused on priority targets was completed with
results expected in Quarter 1 20191.
Exploration Alliance with Red Metal Ltd
was completed in early 2019. The Exploration
Alliance with Red Metal allows OZ Minerals to
jointly explore chosen projects from the Red
Metal portfolio of base metal and gold/silver
prospective projects. Preliminary plans have
been made for 2019 and 2020 which include
geophysical and/or drill coverage activity
(depending on target maturity) in six areas in
Queensland and Western Australia.
Eloise with Minotaur Exploration is targeting
Eloise-style massive sulphides in the highly
prospective eastern succession of the Mount
Isa block, 60 km south-east of Cloncurry,
Queensland.
Off the back of positive drilling results in 2017 at
the Jericho prospect, we acquired a 51% interest
in the Project and have the option to earn up to
70% with an additional $5 million spend.
A total of 38 drill holes have now been completed
on the Jericho prospect and they continue to
intersect mineralisation along the entirety of the
Jericho trend. The mineralised structure remains
open along strike and at depth.
A number of regional targets with similar
geophysical characteristics to Jericho were tested
in the second half of 2018 and all intersected
anomalous copper and gold. However, our focus
remains on Jericho in the immediate forward plan.
Internal modelling and evaluation of the project
has commenced and an infill drilling program
is currently being planned in order to build
confidence in the upper 300 metres of the J1
and J2 mineralised structures.
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Paraiso with private Peruvian company,
Inversiones Mineras La Chalina S.A.C., is
exploring for IOCG deposits in the Arequipa
district of southern coastal Peru.
OZ Minerals can earn up to 75% of the project
by spending US$10.0 million over five and half
years and has the right to purchase a further
25% equity.
The initial work program is planned to
include geological mapping, rock chip and soil
sampling, ground geophysics and an airborne
magnetic survey.
OZ Minerals has committed to spending
US$0.5 million on exploration in the first
12 months, after which it can elect to proceed
with the project. If we elect to progress,
we can earn 100% of the project by spending
US$11.5 million over five years.
Lannavaara with Mineral Prospektering
i Sverige is targeting IOCG mineralisation in
the Norbotten district of northern Sweden.
Multi-method geophysics surveys began
in Quarter 4, including ground-based
electromagnetic, gravity and magnetic data
acquisition. These surveys confirmed the presence
of anomalies identified in pre-competitive data
and further refined the position of potential drill
targets. A gridded, base-of-till drilling program
was conducted during Quarter 4 to collect
geochemical samples of the bedrock beneath
periglacial and transported cover. A second phase
of geochemical sampling and geophysics surveys
will be conducted during the winter so as not
to interfere with local reindeer herding and to
minimise the overall environmental impact.
Drill testing is expected to commence in the
first half of the year.
Oaxaca with Acapulco Gold Corp is focused
on base metal projects in Oaxaca, South Mexico
and is targeting the Riqueza Marina, Zaachila
and Zapotitlán sites. The sites have potential for
volcanic-hosted massive sulphide deposits.
Field work at Riqueza Marina led to the discovery
of more surface copper, zinc, gold, and silver
mineralisation, approximately 1.2 km east of
previously reported gossanous sub-crop. Ground
magnetic and gravity surveys were subsequently
completed at Riqueza Marina. These identified a
coincident gravity and magnetic anomaly beneath
alluvial cover and adjacent to outcropping
gossanous rocks, and another gravity high
over the area containing surface base metal
mineralisation. The geophysics will help to inform
a 2019 drill program.
Mapping and geochemical sampling
undertaken at Zaachila outlined a copper-oxide
mineralisation at the surface over a strike length
of approximately two kilometres along a key
geological contact. Gravity and ground magnetic
surveys covering this zone commenced in
Quarter 4.
We have secured community access agreements
and environmental permits for Riqueza Marina
and drill permitting documents were submitted
in November.
(I) Refer to Red Metal Ltd ASX announcement
Drilling underway at Punt Hill & Pernatty
Lagoon copper–gold projects released
on 10 September 2018, and available
at redmetal.com.au/investors/asx-
announcements-mainmenu-96.html
1 9
Governance
OZ Minerals provides strong governance to enable lean business processes, clear
accountability and room for innovation. This is fundamental to our business strategy.
OZ Minerals’ management structure
Our management structure, Governance and Risk
Policy, and supporting standards provide clear
guidelines and reporting structures to ensure our
activities reinforce the corporate strategy and are
conducted in a financially, environmentally and
socially responsible way.
OZ Minerals’ Board is committed to adopting the
recommended corporate governance practices
set out in the ASX Corporate Governance Council
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 includes 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 Board currently comprises six directors,
one executive director and five non-executive
directors. The executive director is Managing
Director and Chief Executive Officer, Andrew
Cole. The Board has a unitary structure. All non-
executive directors, including the Chairman, are
independent. The proportion of women on the
Board is 33 per cent1.
Three standing committees help 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
internal control and risk management system’s
effectiveness.
People & Remuneration Committee – assists
the Board in discharging its responsibilities relating
to the remuneration of directors, executives
and employees, succession planning, and the
Diversity and Inclusion Policy’s establishment and
monitoring.
Sustainability Committee – assists the
Board in the effective discharge of its
responsibilities in relation to safety, health,
environment and community (SHE&C) issues
for the OZ Minerals Group. This includes
managing the risks relating to SHE&C issues
by meeting the Company’s requirements for
internal notification, investigation, reporting and
continuous improvement, and overseeing the
public reporting and disclosure processes insofar
as they relate to SHE&C risks.
OZ Minerals’ management team
Management is responsible for implementing
management systems across the business and
monitoring the application and effectiveness
of these systems through internal and external
audits. Training and competency are part of
the continuous improvement process and are
detailed in the Performance Standards.
OZ Minerals has a devolved operating
model ensuring its assets are autonomous
and accountable, with the corporate centre
focused on strategy, customers and owners,
assurance and growth. With the acquisition
of international assets and the focus on
innovation, transformation and developing
our people, a review of the devolved model
in 2018 resulted in some changes to the
construct of the Executive Committee.
2 0
1 On 4 May 2018, OZ Minerals announced
that Julie Beeby resigned from the Board.
On 17 July 2018, OZ Minerals announced
other changes to the Board, including:
/ Peter Tomsett resigned as a non-executive
director effective 1 August 2018;
/ Charlie Sartain joined the Board as a
non-executive director on 1 August 2018,
succeeding Peter Tomsett as Chairman of
the Sustainability Committee; and
/ Marcelo Bastos joined the Board as a non-
executive director on 1 September 2018.
Further information can be found in the
Company’s announcements entitled ‘Non-
Executive Director resignation’ and ‘Two
experienced miners to join OZ Minerals’
Board’ released to the ASX on 4 May 2018
and 17 July 2018 respectively, which are
available at ozminerals.com/media/asx/
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Management structure2
OZ Minerals Ltd Board of Directors
Rebecca McGrath
Chairman and Independent
Non-executive Director
Marcelo Bastos
Independent
Non-executive Director
Board Committees
Andrew Cole
Managing Director and
Chief Executive Officer
Peter Wasow
Independent
Non-executive Director
Charlie Sartain
Independent
Non-executive Director
Tonianne Dwyer
Independent
Non-executive Director
Audit
Committee
People & Remuneration
Committee
Sustainability
Committee
OZ Minerals Ltd management team
Andrew Cole
Warrick Ranson
Mark Irwin
Kerrina Chadwick
Fiona Blakely
Managing Director and
Chief Executive Officer
Chief Financial
Officer
Chief Commercial
Officer
Chief Corporate
Affairs Officer
Chief People Officer3
Tania Davey
Myles Johnston
Chief Transformation Officer4
and acting Chief People Officer5
General Manager
Carrapateena Operations
Gabrielle Iwanow
General Manager
Prominent Hill6
Carlos Gonzalez
Chief Executive Brazil7
Asset managers and line managers
Employees
2 As at 14 February 2019.
3 Fiona Blakely commenced as Chief People
Officer on 11 February 2019.
4 Tania Davey commenced as Chief
Transformation Officer on 1 January 2019.
5 Mark Rankmore was appointed to manage
the integration of Avanco Resources in Brazil
on 18 April 2018 and Tania Davey acted
as Head of People & Performance until the
appointment of the Chief People Officer.
6 Gabrielle Iwanow commenced as General
Manager Prominent Hill on 1 January 2019.
7 Carlos Gonzalez commenced as Chief
Executive Brazil on 21 January 2019.
S U P P O RT I N G D O C U M E N T S
/ Corporate Governance Statement
/ OZ Minerals policies, and supporting
performance and process standards
/ Board and Committee Charters
/ Company Constitution
/ Code of Conduct
ozminerals.com/about/corporate-governance/
2 1
Governance framework
Company Constitution / Code of Conduct / Board Charter
Audit Committee
Charter
People & Remuneration
Committee Charter
Sustainability Committee
Charter
Policies and procedures
Governance and Risk Policy
To ensure ethical, fit-for-purpose business
processes are used to meet the highest
corporate governance standards and
identify opportunities and threats using
robust processes across OZ Minerals.
Market Dividend 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.
Securities Trading Procedure
To set out the processes of OZ Minerals
for employees (full time, part time
and casual), directors, consultants and
contractors of OZ Minerals trading in
securities of the Company.
Performance standards
Health and Safety Policy
To strive to be an injury and occupational
disease-free workplace whilst achieving
operational excellence.
Diversity and Inclusion Policy
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.
Continuous Disclosure Procedure
To ensure timely and accurate information
is provided equally to all shareholders
and market participants, consistent with
the OZ Minerals’ commitment to its
continuous disclosure obligations.
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.
Anti-bribery and Corruption
Procedure
To ensure directors, officers and
employees understand, observe
and comply with anti-bribery and
anti-corruption laws and regulations,
and a set of How We Work
Together principles.
Environment
Safety
Social
Health and Wellbeing
Process standards (including Enterprise Risk Management)
Planning
Compliance
Financial
People
Reference documents
Asset documents
2 2
ANNUAL AND SUSTAINABILITY REPORT 2018 OZ Minerals is revising its business process
standards so that 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 that are unique to OZ Minerals,
and they will be used by OZ Minerals’ employees,
contractors and assets. They define the inputs
and outputs required, the processes people
must follow and the delegations that they can
work within.
All corporate and further-developed asset
documents comply with the laws and regulations
of the jurisdiction in which each asset operates.
Internal and external audits
OZ Minerals conducts regular audits to
systematically and objectively verify that
it conforms to performance management
standards and legal requirements, and in order
to recommend ways to improve safety, health
and wellbeing along with environmental
and social performance. Further audits are
undertaken commensurate with the risk profile.
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.
We focus on what matters, and set processes
that create value, embrace the global devolved
business model and provide clarity for new assets,
partners, suppliers and employees coming into
OZ Minerals.
Our values and behaviours drive transparency
and fair dealing, and propagate a culture of
performance and devolved accountability – this
allows us to deliver on our Company strategy.
OZ Minerals’ Code of Conduct applies standards
for appropriate ethical and professional behaviour
and guides OZ Minerals’ employees, directors,
contractors and partners.
The Code of Conduct provides clear guidelines
as to our 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 and
whistleblowing.
OZ Minerals’ nine Company policies work
synergistically to provide a clear representation
of our intent while providing a platform for
multiple assets to work together under a global
devolved model. Policy documents, our Securities
Trading Procedure and our Continuous Disclosure
Procedure are publicly available and are used
to clearly articulate what we strive for to all
stakeholders, partners and communities.
Underpinning the policies are performance
standards that are grouped into four key areas.
These are safety, environment, health and
wellbeing, and social. They define the minimum
required performance to manage sustainability
opportunities and threats.
These standards will be used to audit asset
performance and set the standards for any new
assets to achieve. They are provided to contractors
and partners to outline what we expect when
they work 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
our standards, in keeping with our lean,
global devolved business model.
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DIRECTORS’ REPORT Directors’ report
The directors present their report for the Consolidated Entity (OZ Minerals)
for the financial year ending 31 December 2018 (‘the year’) together with the
Consolidated Financial Statements for the year. OZ Minerals Limited (OZ Minerals
Limited or the ‘Company’) is a company limited by shares that is incorporated
and domiciled in Australia.
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; exploration activities; and the development of
mining projects. More information on OZ Minerals principal activities can be found on pages 6–19 and
within the Financial Review (page 33).
Significant changes in state of affairs
The Consolidated Entity acquired Avanco Resources Limited and its wholly-owned subsidiaries
during the year. There have been no other significant changes in the state of affairs reported since prior
years (as discussed on pages 6–19).
Dividends
Since the end of the financial year, the Board of Directors has resolved to pay a fully-franked dividend
of 15 cents per share. This will be paid on 26 March 2019 and the date of record for entitlement to this
dividend will be 12 March 2019. The financial impact of the dividend, amounting to $48.4 million, has
not been recognised in the Consolidated Financial Statements for the financial year ending
31 December 2018 and will be recognised in subsequent Consolidated Financial Statements.
Dividends announced or paid since 1 January 2017
Record date
Date of payment
12 March 2019
26 March 2019
3 September 2018
17 September 2018
12 March 2018
26 March 2018
7 September 2017
21 September 2017
10 March 2017
24 March 2017
Fully franked
cents per share
Total dividends
$m
15
8
14
6
14
48.4
25.8
41.8
17.9
41.8
Directors and officers
OZ Minerals’ directors and officers for the financial year ending 31 December 2018 and up to the date
of this report are included in the table below:
Position
Experience and expertise
OZ Minerals special
responsibilities
during 2018
Other directorships
at currently listed
entities
Previous directorships
at listed entities (within
the last three years)
Current directors
Rebecca McGrath
Independent
Non-executive Chairman
Appointed as a Non-
executive Director on
9 November 2010 and
Chairman on 24 May 2017
BTP (Hons), MA (App.Sci)
FAICD
2 6
Ms McGrath is an internationally experienced
business leader, director and chairman.
Ms McGrath’s executive career included 23 years
with BP Plc. She held a range of senior executive
and group executive roles in Australia, Europe
and U.K, including Chief Financial Officer, Chief
Operating Officer and Executive Management
Board member Australia and New Zealand.
Ms McGrath is currently a Non-executive Director
of Investa Commercial Property Fund Holdings
and Investa Wholesale Funds Management Ltd.
Ms McGrath is a member of the Victorian Council
of the Australian Institute of Company Directors.
Chairman of the Board
Member of People
& Remuneration
Committee
Member of the Audit
Committee from
4 May 2018 to
1 August 2018
Member of the
Sustainability
Committee from
4 May 2018
Non-executive Director of
CSR Limited from February
2012 to October 2016
Non-executive Director
of Incitec Pivot Limited
since September 2011
Non-executive Director
of Goodman Group
since April 2012
ANNUAL AND SUSTAINABILITY REPORT 2018 Position
Experience and expertise
Andrew Cole
Managing Director and
Chief Executive Officer
Appointed on
3 December 2014
BAppSc (Hons) in
Geophysics MAICD
Marcelo Bastos
Independent
Non-executive Director
Appointed on
1 September 2018
BEng (Hons), MBA, MAICD
Tonianne Dwyer
Independent
Non-executive Director
Appointed on
22 March 2017
BJuris (Hons), LLB (Hons)
Charlie Sartain
Independent
Non-executive Director
Appointed on
1 August 2018
BEng (Hons), Fellow
(Australasian Institute of
Mining and Metallurgy),
Fellow (The Academy of
Technological Sciences
and Engineering)
Mr Cole has over 26 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 Councillor of SACOME (South
Australian Chamber of Mines and Energy).
Mr Bastos has over 30 years international mining
experience in copper, gold, iron ore, nickel, coal and
other mineral sectors. He served on the executive
committee of MMG Limited for six years as Chief
Operating Officer. Prior to MMG Mr Bastos held
several senior executive positions with BHP Billiton
including Chief Executive of the BHP Billiton
Mitsubishi Alliance; President of Cerro Matoso
Nickel and BHP Billiton in Colombia; and President
of Nickel West in Australia. He worked for Vale for
19 years in iron ore, gold and copper, progressing
to Director of Copper. His roles at Vale also included
General Manager of the largest company complex,
Carajas, in Para state.
Mr Bastos is also Global Board Independent
Director of major consulting engineering company,
Golder Associates.
Mr Bastos was a member of the Western Australia
Chamber of Mines and Energy and was Vice
President of the Queensland Resources Council.
Ms Dwyer is an independent non-executive
public company director. Ms Dwyer spent over
20 years in investment banking and real estate
fund management and was a Director of Investment
Banking at Societe Generale/Hambros Bank
advising on mergers and acquisitions, restructuring
and refinancing. Ms Dwyer was Head of Fund
Management at the LSE listed property company,
Quintain Estates and Development plc and was later
appointed to the Board as an Executive Director. Ms
Dwyer is a graduate member of Australian Institute
of Company Directors and a member of Chief
Executive Women and Women Corporate Directors.
Mr Sartain has more than 30 years’ international
mining experience. He was Chief Executive Officer
of Xstrata’s global copper business for nine years
from 2004. Prior to that, he held senior executive
positions in Latin America and Australia including
General Manager and President of Minera
Alumbrera Ltd in Argentina, General Manager
of Ernest Henry copper/gold mine and General
Manager of Ravenswood Gold Mines in Queensland.
Mr Sartain is Chairman of the Advisory Board of
the Sustainable Minerals Institute at the University
of Queensland and a Board Member of Wesley
Medical Research.
Mr Sartain was also the Chairman of the
International Copper Association, a member of the
Department of Foreign Affairs and Trade’s Council
on Australian Latin American Relations, a member
of the Senate of the University of Queensland and
a Local Councillor of the Dalrymple Shire Council
in Queensland.
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OZ Minerals special
responsibilities
during 2018
Other directorships
at currently listed
entities
Previous directorships
at listed entities (within
the last three years)
Managing Director and
Chief Executive Officer
None
Non-executive Chairman
of Avanco Resources
Limited from 13 June 2018
to 11 July 2018
Member of
Sustainability
Committee
None
Non-executive Director
of Iluka Resources
Limited since February
2014
Non-executive Director
of Aurizon Holdings
since November 2017
Non-executive Director
of Cardno Limited from
2012 to 2016
Chairman of the People
& Remuneration
Committee
Member of the Audit
Committee
Non-executive Director
of DEXUS Property
Group since August
2011
Non-executive Director
of ALS Limited since
July 2016
Non-executive Director
of Metcash Limited
since June 2014
Chairman of the
Sustainability
Committee
Member of the Audit
Committee
Non-executive Director
of ALS Limited since
February 2015
Non-executive Director
of Goldcorp Inc since
January 2017
Non-Executive Director
of Austin Engineering
Limited from April 2015
to April 2018
2 7
Position
Experience and expertise
OZ Minerals special
responsibilities
during 2018
Other directorships
at currently listed
entities
Previous directorships
at listed entities (within
the last three years)
Non-executive Director
of APA Group since
March 2018
Managing Director and
Chief Executive Officer
of Alumina Limited from
January 2014 to May 2017
Peter Wasow
Independent
Non-executive Director
Appointed on
1 November 2017
B. Comm, GradDip
(Management), Fellow
(CPA Australia)
Chairman of the
Audit Committee
Member of the People
& Remuneration
Committee from
1 August 2018
Member of the
Sustainability
Committee until
1 August 2018
Mr Wasow has extensive experience in the resources
sector as both a senior executive and director.
He formerly held the position of CEO & Managing
director of Alumina Limited, an ASX 100 company,
and before that Executive Vice President and Chief
Financial Officer, Santos Limited and in a 20 year
plus career at BHP he held senior positions including
Vice President, Finance and other senior roles in
Petroleum, Services, Corporate, Steel and Minerals.
Mr Wasow is currently the senior independent
Director of the privately held GHD Group and a
Non-executive Director of APA Group. He was also
Non-Executive Director of Alcoa of Australia Limited,
AWA Brazil Limitada, AWAC LLC and Non-Executive
Director of ASX-listed Alumina from 2011 to 2013
and executive director from 2014 to 2017.
Mr Wasow has also been a member of the Business
Council of Australia, and director of the International
Aluminium Institute and APPEA.
OZ Minerals special responsibilities during 2018
Member of the Sustainability Committee
Member of the Audit Committee
Chairman of the Audit Committee
Member of Sustainability Committee
Chairman of the Sustainability Committee
Member of the People & Remuneration Committee
OZ Minerals special responsibilities during 2018
Ms Pole also holds office of OZ Minerals’ Senior Legal Counsel. Ms Pole has
spent most of her career in a leading national law firm before moving in-house
to the mineral resources sector. Ms Pole has particular experience in commercial
transactions, corporate advisory and compliance with the ASX, ASIC and other
regulatory bodies. As well as being a Certificated Member of the Governance
Institute, Ms Pole holds a Bachelor of Laws from The University of Adelaide and a
Graduate Diploma in Legal Practice.
Position
Former directors
Julie Beeby
Independent Non-executive Director
Appointed on19 April 2016
BSc (Hons I), PhD (Physical-Chemistry), MBA, FAICD, FTSE
Resigned as a Non-executive Director on 4 May 2018
Charles Lenegan
Independent Non-executive Director
Appointed on 9 February 2010
BSc (Econ)
Retired as a Non-executive Director and Chairman on
24 April 2018
Peter Tomsett
Independent Non-executive Director
Appointed on 22 March 2017
BEng (Hons I), MSc
Resigned as a Non-executive Director on 1 August 2018
Position
Officers
Michelle Pole
Company Secretary
Appointed on 13 December 2017
LLB, GDLP
2 8
ANNUAL AND SUSTAINABILITY REPORT 2018 Meeting attendance
Attendance at OZ Minerals Limited Board and committee meetings (1 January 2018 to 31 December 2018)
Board meetings
Board committee meetings
Audit
People & Remuneration
Sustainability
A
19
19
5
18
6
17
9
8
12
B
19
19
6
19
7
19
9
9
12
A
1
–
–
6
3
6
2
2
–
B
1
–
–
6
3
6
2
2
–
A
8
–
–
8
–
6
–
–
2
B
8
–
–
8
–
6
–
–
2
A
3
–
1
–
2
2
1
1
2
B
3
–
1
–
2
2
1
1
2
Current directors
Rebecca McGrath(a)
Andrew Cole
Marcelo Bastos(b)
Tonianne Dwyer
Charlie Sartain(c)
Peter Wasow(d)
Former directors
Julie Beeby(e)
Charles Lenegan(f)
Peter Tomsett(g)
Note: MD&CEO and Non-executive Directors who are not Board Committee members also participated in scheduled Board Committee meetings throughout the year.
A = the number of meetings attended during the time the director held office.
B = the number of meetings held during the time the director held office.
(a) Member of the Audit Committee from 4 May 2018 to 1 August 2018. Member of the Sustainability Committee from 4 May 2018.
(b) Appointed as Non-executive Director on 1 September 2018.
(c) Appointed as Non-executive Director on 1 August 2018.
(d) Member of the Sustainability Committee until 1 August 2018. Member of the People & Remuneration Committee from 1 August 2018.
(e) Ceased as a Non-executive Director on 4 May 2018.
(f) Ceased as a Non-executive Director on 24 April 2018.
(g) Ceased as a Non-executive Director on 1 August 2018.
Directors’ interests
Directors’ interests in the ordinary shares of OZ Minerals Limited
Director
Rebecca McGrath
Andrew Cole
Marcelo Bastos
Tonianne Dwyer
Charlie Sartain
Peter Wasow
Total
Shares number
37,935
164,344
Nil
10,000
70,000
8,000
290,279
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Environmental regulation
OZ Minerals and its activities in Australia and overseas are subject to environmental regulations.
OZ Minerals’ Prominent Hill operations, Carrapateena project, Australian exploration activities and
concentrate shipping activities operate under various licences and permits under Commonwealth,
state and territory laws, in addition to the licensing and permit arrangements which apply to its
overseas activities. OZ Minerals’ Antas operations are also subject to environmental regulations under
legislation in Brazil.
OZ Minerals regularly monitors its compliance with licenses and permits in various ways, including
through its own environmental audits as well as those conducted by regulatory authorities and other
third parties. OZ Minerals uses a documented process to classify and report any exceedance of a
licence or permit condition as well as any incident reportable to the relevant authorities. All instances
of reportable environmental non-compliance and significant incidents are reviewed by the Executive
Committee and the Sustainability Committee of the OZ Minerals Board of Directors as a part of this
process. A formal report is also prepared to identify the factors that contributed to the incident or
non-compliance and the actions taken to prevent any reoccurrence.
During the year, OZ Minerals submitted the energy and emissions report to the Clean Energy Regulator
in accordance with the National Greenhouse and Energy Report Act 2007 (NGER Act). A limited
assurance engagement of OZ Minerals’ energy and emissions report was conducted by an independent
auditor over the emissions, energy production and energy consumption report prepared in accordance
with the NGER Act.
Insurance and indemnity
During the financial year, OZ Minerals Limited paid premiums with respect to a contract insuring its
directors, officers and related bodies corporate against certain liabilities incurred while acting in that
capacity. The insurance contract prohibits disclosure of the liability’s nature 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 former 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, to conform 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 auditor
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 in respect of or
on behalf of the Consolidated Entity under section 237 of the Corporations Act 2001.
Audit and non-audit services
KPMG continues in office in accordance with the Corporations Act 2001. A copy of the lead auditor’s
independence declaration is set out on page 98 as required under section 307C of the Corporations Act
2001 and this forms part of the Directors’ Report.
OZ Minerals Limited, 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.
3 0
ANNUAL AND SUSTAINABILITY REPORT 2018 Amounts paid or payable to the external auditor (KPMG) and its network firms for audit
and non-audit services
Audit services provided by KPMG Australia
Audit and review of financial reports and other audit work under the Corporations Act 2001, including audit of subsidiary
financial statements
2018
$
KPMG Australia
Overseas KPMG firms
Total fee for audit services provided by KPMG
Other assurance services provided by KPMG (NGER Act)
Total audit and assurance fee
Tax compliance and other tax advisory services
Other services provided by KPMG
Total non-audit fee
Total fees
545,000
24,900
569,900
50,000
619,900
202,000
101,600
303,600
923,500
The Audit Committee has, following the passing of a resolution by the Committee, provided the
Board with advice in relation to KPMG providing non-audit services.
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 non-audit
services provided by the auditor did not compromise the auditor independence requirements of the
Corporations Act 2001 because:
/ all non-audit services were reviewed by the Audit Committee to ensure they did not impact the
integrity and objectivity of the external auditor
/ none of the services undermined the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants. These include 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 15 cents per share on 26 March 2019. The record date for entitlement to this dividend is 12 March
2019. The financial impact of the dividend amounting to $48.4 million has not been recognised in the
Consolidated Financial Statements for the year ended 31 December 2018 and will be recognised in
subsequent Consolidated Financial Statements.
There have been no other events subsequent to the reporting date which have significantly affected
or may significantly affect OZ Minerals’ operations, state of affairs or results in future years.
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 statements and Directors’ Report have been rounded 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 unless otherwise stated.
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Operating and financial review
Our operations are reviewed on pages 6–19 and the Financial Review (page 33) forms part of the
Directors’ Report.
Remuneration report
The Remuneration Report which has been audited by KPMG is set out on pages 45, and forms part
of the Directors’ Report.
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 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 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 ozminerals.com/
about/corporate-governance/corporate-governance-statement.
Signed in accordance with a resolution of the directors.
Rebecca McGrath
Chairman
Adelaide
27 February 2019
Andrew Cole
Managing Director and CEO
Adelaide
27 February 2019
3 2
ANNUAL AND SUSTAINABILITY REPORT 2018 Financial review
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OZ Minerals’ net profit after tax (NPAT) for the year was $222.4 million, which was $8.7 million (or 4%)
lower compared to 2017. The underlying NPAT1 for the year was $228.3 million after adjusting for the
acquisition costs associated with the Avanco transaction of $5.9 million. Prominent Hill continued its
consistent production performance and benefited from the high copper prices in the first half of 2018.
During the year, the consolidated entity increased exploration and evaluation expenditure to progress
its growth pipeline as well as evaluating expansion options at Prominent Hill and Carrapateena which
also contributed to the result for the year. Earnings before interest, tax, depreciation and amortisation
(EBITDA) margins remain robust at 48 per cent. OZ Minerals’ cash balance of $505.1 million, decreased
by $224.3 million compared to 2017 after capital investment at Carrapateena, the acquisition of
Avanco Resources Limited (Avanco), expenditure on exploration activities, tax payments, and dividend
payments to shareholders which was partly offset by increased operating cash flows.
Variance analysis – underlying net profit after tax (NPAT), 31 December 2018 compared to 31 December 2017
350
300
250
n
o
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i
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$
200
150
100
50
63.5
9.6
57.2
231.1
17.4
Increase in revenue
due to sales volume:
Copper
19.1
Gold (2.6)
Silver 0.9
Total 17.4
Increase in revenue
due to higher
commodity prices:
Copper
Gold
Silver
Total
61.4
3.8
(1.7)
63.5
6.0
228.3
Increase in
production costs:
Mining (30.5)
(including inventory
movement)
Processing (19.2)
Site administration 1.8
Freight (9.3)
Total (57.2)
42.1
Increase in other costs:
Exploration
expenditure (45.8)
Corporate
administration (5.6)
Foreign exhange
& other 9.3
Total (42.1)
Underlying NPAT
for the year ended
31 December 2017
Sales
volume
Sales
price
TCRC and
royalties
Production costs
Other costs
Tax and
interest
Underlying NPAT
for the year ended
31 December 2018
Revenue
2018 revenue was $93.9 million higher when compared to 2017 with higher commodity prices,
consistent production from Prominent Hill and revenue from Antas. The amount of contained copper
sold (114,722 tonnes) was two per cent higher than in 2017 while gold sales of 131,929 ounces were
comparable to 2017 sales.
In 2018, the average $A copper price was eight per cent higher than in 2017, while the average
$A gold price was three per cent higher. Sales from Prominent Hill and Antas benefited from strong
copper prices during the year, particularly during the first half of the year when the copper price was
five per cent higher than in the second half.
Realisation costs
Treatment charges and refining costs (TCRC) were $13.0 million lower as a result of improved trading
terms and lower refining charges in the market.
Royalty expenses increased by $3.4 million because of higher sales in this period compared to the
previous period.
1OZ 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 and Underlying
NPAT. These measures are presented to
enable understanding of the underlying
performance of the Consolidated Entity.
Non-IFRS measures have not been
subject to audit. Underlying EBITDA and
Underlying NPAT are included in Note one
Operating Segments, which form part of the
Consolidated Financial Statements. Refer
Note one.
3 3
Production costs
Production costs in 2018 were $57.2 million higher than the previous year, with the inclusion of Antas
in the second half of the year, an increased proportion of underground ore and higher power costs at
Prominent Hill.
Mining costs including inventory movement and net realisable value (NRV) adjustment were
$30.5 million higher than prior year. Mining costs incurred during the year were $243.4 million lower
in 2018 as open pit mining ceased in Quarter 1. Open pit ore stockpiled in previous periods began to
be processed from Quarter 2 2018 following the closure of the Prominent Hill Open Pit. During the
year $83.7 million was recognised as an inventory cost in the Income Statement which also included
$25 million write up for NRV adjustment. During the year ending 31 December 2017 (comparative
period) while ore inventory was stockpiled, mining costs of $190.2 were capitalised in to inventory.
Processing costs increased by $19.2 million due to the inclusion of Antas in the second half of 2018
and higher power prices at Prominent Hill, as previously anticipated.
Exploration and development expenditure
Exploration and evaluation expenditure of $67.2 million was incurred during the year to progress the
West Musgrave project, Carrapateena expansion study, Gurupi province, Carajas province and other
exploration earn-in arrangements in the growth pipeline:
/ West Musgrave $23.4 million
/ Carrapateena expansion $11.4 million
/ Brazil exploration $13.0 million
/ other exploration and development expenditure $19.4 million.
Other expenditure
Corporate general and administration costs of $29.0 million are largely related to corporate activities.
These were $5.6 million higher than the comparative period as a result of the increased focus on
exploration and development.
The income tax expense of $90.5 million was $7.8 million lower than the previous year as a result of
the lower profit and the benefit of tax losses recognised during the year.
Acquisition costs associated with the Avanco transaction of $5.9 million net of tax relating to due
diligence, legal, transaction and consulting fees were recognised as a non-underlying expense during
the year.
Cash balance and cash flow
449.6
609.7
729.4
67.6
3.4
505.1
Opening January
2018 cash balance
Operating
activities
Investing
activities
Financing
activities
Effect of exchange
rate changes
Closing December
2018 cash balance
n
o
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l
i
m
$
1,200
1,000
800
600
400
200
0
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ANNUAL AND SUSTAINABILITY REPORT 2018
Operating cash flows
Operating cash flows of $449.6 million for the year were $106.7 million higher than in 2017. This was
principally due to the benefit of higher commodity prices in the first half of the year and the drawdown
of stockpiled material at Prominent Hill, partially offset by tax payments and further investment in
exploration activities. Customer receipts were $203.8 million higher as a result of the sales and copper
price realised during the year. Income tax payments of $148.7 million were in relation to 2018 and
finalisation of the 2017 tax liability.
Investing cash flows
Net investing cash flows of $609.7 million represent payments for the Avanco acquisition; property,
plant, equipment and mine development at Prominent Hill and Antas; development costs at
Carrapateena; exploration costs of the West Musgrave project; and receipts from the sale of surplus
mining equipment.
The payments incurred related to:
/ Capitalised Carrapateena project costs $335.0 million
/ Prominent Hill mine development costs $58.7 million
/ Sustaining capital expenditure $12.5 million
/ Other capital expenditure $20.2 million
/ Avanco shares acquisition $222.4 million, partially offset by Avanco’s cash balance of $39.1 million
acquired as at 30 June 2018.
Financing activities
Cash outflows relating to financing activities comprised $67.6 million in dividend payments to
shareholders.
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend
amounting to $48.4 million in respect of the 2018 financial year. This final dividend will be fully
franked for Australian tax purposes.
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Balance sheet
Total equity increased by $398.9 million during the year to $2,915.2 million. This was mainly due to
equity issued for the acquisition of Avanco ($245.0 million) and the current year profit ($222.4 million),
which was partially offset by $67.6 million in dividends and a $17.8 million (net of tax) decrease in the
value of gold derivative contracts.
The movement in the net assets of the Company since 31 December 2017 is provided below.
3,200
3,000
2,800
2,600
n
o
i
l
l
i
m
$
2,516.3
2,400
2,200
2,000
58.6
51.0
901.8
166.7
Increase in other
assets mainly due
to reclassifications
and derivatives
which were partly
offset by collection
of lease receivables
Increase in trade
payables
predominantly
due to increase
in accruals for
Carrapteena
2,915.2
Derivatives,
other liabilities,
provisions and
deferred tax
liability including
aquisition of
Avanco
Reduction in cash
balance a result
of operating cash
flows being offset
by acquisitions
of Avanco,
investment in
Carrapateena and
other assets and
dividends
Decrease in
inventory a result
of commencing
processing of open
pit ore stockpiles
68.5
224.3
Trade receivables
reduction was
due to the timing
of shipments
51.0
PP&E increase
due to capital
expenditure at
Carrapateena
and acquisition
of Avanco
Net assets 2017
Cash
Inventory
Trade
receivables
Property plant
and equipment
Other assets
Trade payables
and accruals
Tax and other
liabilities
Net assets 2018
The Company ended the year with a cash balance of $505.1 million and undrawn debt facilities of
$100.0 million, with an uncommitted facility for $300.0 million, providing the liquidity and flexibility
for the Company to execute its growth strategy.
Inventories at 31 December 2018 were $678.4 million, of which non-current ore stockpiles decreased
by $82.8 million as the Prominent Hill open pit stockpile processing commenced. A net realisable
value write-back of $25.0 million was applied to the low grade gold ore stockpiles (the estimated net
realisable value is based on revenue expected to be derived from metal contained in the ore stockpiles,
based on the processing operational plan, and after adjustment for incremental costs). As open pit
ore stockpiles are consumed, the costs of mining open pit ore and the related capitalised depreciation
(collectively comprising open pit ore inventory) will be amortised progressively and recognised in the
income statement.
Trade receivables at the end of the year of $70.9 million were $51.0 million lower than the previous
year due to the timing of shipments.
Property plant and equipment (PP&E) increased during the year mainly due to the acquisition of
Avanco PP&E, including mineral rights of $615.5 million, capitalised underground development costs
of $58.7 million; development capital expenditure at Carrapateena of $335.0 million; and sustaining
and other capital expenditure of $40.9 million partially offset by depreciation of PP&E assets.
Studies on the Concentrate Treatment Plant (CTP) have concluded with a deep body of knowledge
acquired and positive technical outcomes that provide optionality in the future. However, the Company
has decided not to proceed with the CTP at this time. The capitalised costs relating to the CTP are
classified within Other assets.
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ANNUAL AND SUSTAINABILITY REPORT 2018
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Risks
OZ Minerals’ operating results, financial results and performance are subject to a wide range of risks
and uncertainties (both opportunities and threats) that can be financial, political, operational and
environmental. The Consolidated Entity manages and mitigates these risks, where appropriate,
to minimise adverse impacts from threats and maximise beneficial outcomes from opportunities.
OZ Minerals’ simplified corporate governance structure and direct communication channels ensure
timely responses to emerging risks. Our risk management framework emphasises risk aware decision-
making to achieve enhanced business outcomes.
The Board has oversight responsibility and determines the overall risk appetite for the Consolidated
Entity. OZ Minerals operates a risk management system with multiple lines of defence. Line managers,
operational staff and corporate functions establish standards for managing risk and the Board and its
committees review risk management processes and material risk profiles as a part of their oversight
role. The Company has identified the risks and mitigating factors that have the potential to affect
future operating and financial performance (provided in the table below). Developing preventative
and mitigating controls for threats is intended to minimise the adverse impact on the Company’s
performance, but the Company’s future operations and financial performance may be significantly
impacted should any of these elements fail or be disrupted.
Risks and mitigating factors that could affect OZ Minerals’ future operating and financial performance
Context
Strategic risks
One operating asset
Operating only one material
operating asset exposes
the Consolidated Entity to
concentration risks.
Climate change
Risk
Mitigation/actions
The Prominent Hill mine generates most of the
Company’s income and cash flow.
Climate change can cause disruption to mine
production, logistics and water supply as a result of
extreme weather events.
As regulatory agencies respond to climate change
over the medium term, costs of inputs may rise and
restrictions may be placed on how certain resources
are provided, transported and used. This may adversely
impact our assets.
Climate change combined with regulatory changes
also has the potential to be a catalyst for growth
in industries that require copper and could result in
upward pressure on copper prices.
Prominent Hill now operates an integrated underground mine with
multiple areas. Following the completion of the open pit, the de-risked
ore stockpiles increase certainty to the operations.
The Company has an active program which focuses on using 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.
Progress the development of an additional significant operating project
at Carrapateena.
Prominent Hill concentrate is transported to Australian destinations
using road and rail and it is shipped to overseas destinations from
the port of Adelaide. Spillage risks (and environmental impact) are
mitigated by using customised containers with lids and rotainers to
load concentrate onto ships.
Addition of the Antas operation in Brazil, which is an operating open
pit mine, and ongoing optimisation to increase contribution through a
review of the Antas open pit Mineral Resource and mine plan.
OZ Minerals is committed to reducing the energy and water intensity
of our operations, developing innovative practices in relation to
chemical processing, and being more efficient in our transportation
and processing activities.
The Company’s power strategy is focussed on opportunities
for renewable energy, energy security and reliability for all of
our operations.
Initiatives are underway across operations to reduce our environmental
footprint including energy intensity, water use, waste management, and
transport and logistics.
OZ Minerals is currently preparing a roadmap for reporting of integrated
climate change risks and climate-related financial disclosures in line
with the Taskforce on Climate-related Financial Disclosure (TCFD)
framework.
The TCFD framework will also provide a process to gain a better
understanding of physical and financial climate-related threats and
opportunities which can then be further integrated into our company
standards and policies.
3 7
Context
Risk
Mitigation/actions
OZ Minerals competes with other power users for
a competitively-priced uninterrupted power supply
within the prevailing environment of volatile electricity
prices and power outages.
The existence of a large resource at the Prominent
Hill operation, Carrapateena, Khamsin, Fremantle
Doctor, West Musgrave (JV), Carajas, Gurupil, other
exploration joint ventures and the prospectivity of the
Gawler Craton.
In a climate of prospective commodity prices and
expected long-term shortages in copper supplies,
OZ Minerals competes with other entities to
acquire and develop projects that generate superior
shareholder value.
Mine development projects are inherently
exposed to risks of scope definition, cost estimation
accuracy and other external factors which present
threats and opportunities to a project’s cost,
efficiency and profitability. These are not all within
the Company’s control.
The production and capital costs incurred by
OZ Minerals are subject to a variety of factors,
including and not limited to:
/ fluctuations in input costs determined by global
markets (e.g. electricity, fuel and other key
consumables)
/ changes in economic conditions that impact on
the margins required by contracting partners
/ changes in mining assumptions, such as ore
grades and pit designs.
The operating results of OZ Minerals depend on
the performance of contractors.
The collapse of a TSF has the potential to impact
the safety of employees working in the area and
community members in the vicinity of the area,
company growth, disruption to the mine operation,
severe damage to the environment and long term
company reputational damage. It would likely result in
damaged relationships with key stakeholders.
The concurrent mining of multiple underground
areas will lead to increased underground mining
activities. The Antas mine open pit depth will increase
as mining progresses.
Progressive addition of tailings into the tailings
storage facility.
Continuity of power supply
The Prominent Hill mine and
Carrapateena project are both
located in South Australia, with
common sources of generation
through the connected grid.
Growth strategy
A key element of the Company’s
growth strategy is growth through
acquisition or development of
value accretive copper assets.
Operational risks
Project execution
Successful execution of OZ
Minerals’ growth strategy depends
on its ability to deliver projects on
time and within budget and scope.
Contract management
Many aspects of the Prominent
Hill operations, Carrapateena
project, Antas operations, and
the Company’s exploration
and development activities are
conducted by contractors.
Tailings Storage Facility (TSF)
management
Geotechnical failure
The open pit and underground
mining operations including
tailings storage facilities remain
subject to geotechnical uncertainty
and adverse weather conditions.
These could manifest as pit wall
failures or rock falls, mine collapse,
cave-ins or other failures to
mine infrastructure and reduced
productivity.
The Company has developed a power strategy for the Gawler Craton
to align with its business strategy.
Prominent Hill and Carrapateena power supply contracts ensure power
requirements for its operations in South Australia are met.
The Carrapateena and Prominent Hill power infrastructure agreements
were executed in 2018 and construction is underway.
OZ Minerals has a clear pipeline of projects and gated plans which
ensure a disciplined approach to leverage the large resource base.
OZ Minerals evaluates each opportunity with due care and relies
on expert opinion, both internal and external where necessary, to
ensure that any potential transaction will be value accretive to the
Company’s shareholders.
OZ Minerals maintains a segregated approach to the identification and
review of potential transactions and projects to ensure appropriate
governance is applied over the assessment of financial risk and returns.
New capital management framework established.
OZ Minerals ensures its projects go through a process of internal
and external independent review to verify the engineering, technical
and financial scope definitions and other assumptions.
The Company manages project costs by sound procurement
practices and governance.
OZ Minerals engages with reputable contractors who have the
technical ability, proven track record and financial capability to
execute its projects.
Competitive procurement processes and embedded performance
structures in contracts ensure that the Consolidated Entity mitigates
risks of non-performance by contractors, while deriving the highest
value for shareholders.
OZ Minerals is committed to proactively managing TSFs across its
operations through design and construction specifications, continuous
maintenance, governance, inspection and monitoring programs.
The ongoing management controls include management reviews,
annual independent reviews, compliance with regulatory and licence
requirements and the Australian National Committee of Large Dams
(ANCOLD) guidelines and the TSF Operational Manual, geotechnical
reviews and monitoring, detailed monitoring plans for the periods of
closure and post closure until completion of rehabilitation, periodic
stability analysis and comprehensive dam design reviews.
OZ Minerals operates systems that prevent, monitor and respond to
changes in geotechnical structures in the open pit, underground, and
tailings storage facility to ensure the safety of personnel working
in the affected areas. Activities are undertaken to reduce the risk of
geotechnical failure to as low as reasonably possible.
3 8
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Context
Risk
Mitigation/actions
Estimates of reserves
and resources
Mineral Resource and Ore
Reserve estimates involve areas
of estimation and judgement.
The preparation of these estimates involves application
of significant judgment and no assurance of mineral
recovery levels or the commercial viability of deposits
can be provided. The Company reviews and publishes
its reserves and resources annually.
Customer management
OZ Minerals markets high
grade copper concentrate to
overseas and local customers.
Any disruption to the logistics
chain from production through to
delivery to the customer can result
in significant financial impact.
Market risks
Commodity prices
and exchange rates
Concentrate marketability depends on global mine
supply, smelter demand, concentrate grades and
impurities in the product. OZ Minerals’ concentrate has
a high copper grade, containing gold and silver as well
as some impurities such as fluorine and uranium.
Regulators in various jurisdictions may change limits
or their approach to impurity assessment guidelines
in concentrate. This can impede the importation of the
concentrate into those jurisdictions. These changes
may result in additional requirements related to the
ore, tailings or concentrates, or result in challenges
with selling, transporting or importing OZ Minerals’
concentrates in various jurisdictions.
OZ Minerals does not control copper, gold, silver or other
base metal prices in the global commodities market or
the Brazilian REAL/Australian dollar exchange rate.
The Mineral Resource and Ore Reserve estimates and mine plans
have been carefully prepared by the Company in compliance with
the Joint Ore Reserves Committee (JORC) guidelines and in some
instances are verified by independent mining experts or experienced
mining operators.
The estimation of the Company’s reserves and resources involves
analysis of drilling results, associated geological and geotechnical
interpretations, operating cost and business assumptions, and a
reliance on commodity price and exchange rate assumptions.
The Company’s production plan is based on the published reserves
and resources.
OZ Minerals has developed customised solutions in partnership with
customers. These match smelter demand and production from the
OZ Minerals mines to concentrate grade and timing, along with a range
of controls to manage the fluorine and uranium impurities.
OZ Minerals has multiple marketing options including, but not limited
to, ore blending, concentrates blending and additional flotation
treatment in the processing plant.
OZ Minerals maintains a diverse customer portfolio to mitigate against
the risk of regulatory changes to importation requirements.
OZ Minerals manages its exposure to copper price on invoiced sales by
entering into derivative contracts that settle at the same time as the
contractual quotation period for the sale.
OZ Minerals has entered into gold derivative contracts to fix gold price
on 62.6 per cent of the gold expected to be sold to 2021.
OZ Minerals’ predominant functional currency is the Australian dollar
and US dollars are only held to meet US dollar commitments.
OZ Minerals does not take active steps to hedge currency risk.
OZ Minerals operates mines with a low cost of production relative to
global copper producers. This ensures resilience to low commodity prices
and an ability to maximise margins during high commodity prices.
Safety, health, environment, and community (SHEC)
Operational safety failures
resulting in injury or fatality
OZ Minerals undertakes operations in areas which
may pose a safety risk including, but not limited to,
handling explosives; underground operations subject
to rock fall; confined spaces; areas where heavy and
light vehicles interact; manual handling; and operating
at height.
A fly-in fly-out operation also introduces risk that is
inherent in air travel, as contractors and employees are
regularly required to commute by aircraft.
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 contractors and is actively
building a shared safety culture between employees and the contractors
who work at our sites.
Active engagement at all levels of operations and with senior leadership
teams, combined with activities focused on identifying and eliminating
drivers of safety incidents, has delivered significant successes and
resulted in a sustained reduction in the severity of injuries.
Mine rehabilitation
The Company operates under
a range of environmental
regulations and guidelines.
Environmental regulations and occupational health
and safety guidelines for certain products and by-
products produced or to be produced are generally
becoming more onerous.
The Company is required to close its operations and rehabilitate
the land affected by the operation at the conclusion of mining and
processing activities.
Estimates of these costs are reflected in accordance with AASB 137
Provisions, Contingent Liabilities and Contingent Assets as provisions
in the financial statements. Management seeks external assistance and
review, where appropriate, to estimate these costs.
However, actual closure costs may be higher or lower than estimated
as these are costs to be incurred following the closure of mining
operations over a long time period.
3 9
Context
Risk
Mitigation/actions
Managing and Protecting
the Environment
OZ Minerals is committed to
managing 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.
Maintenance of community
relations and good title
Non-compliance with environmental regulation has
the potential to impact company growth, damage
reputation and could result in damaged relationships
with key stakeholders
The Company works closely with local communities
across its global operations and projects, particularly
the Indigenous communities in Australia.
Agreements with the Commonwealth of Australia
govern the terms of access to areas located within the
‘green zone’ of the Woomera Prohibited Area, where
the Prominent Hill mine is located.
The Company adheres to local mining rules and
regulations as a minimum, with its own practices
often exceeding these requirements.
The OZ Minerals Risk Process Standard outlines the process of risk
identification, assessment, management and reporting across all
operations, including the requirement to take a risk-based approach
to environmental management. Environmental risks for our operations
are addressed by adhering to the conditions set out within the
Performance Standards and legislative and regulatory requirements
of the jurisdictions in which they operate. The Performance Standard
conditions set out to address the following areas, surface water, ground
water, flora and fauna, radiation, air emissions, land and biodiversity,
roads, traffic and other infrastructure, and Indigenous and non-
Indigenous cultural heritage. Each operation has monitoring programs
to ensure it meets the legislative, regulatory and other environmental
requirements. The performance of each OZ Minerals operation is
independently reviewed and reported against according to the
conditions of relevant jurisdiction each year.
Access and compensation agreements are in place with communities
affected by exploration and operational mining activities. These are
reviewed and updated from time to time as required.
The Company has controls in place to ensure compliance with the deed
covering the Woomera Prohibited area and local level agreements.
It relies on good relations with the Australian Defence Department
regarding defence operations in the Woomera region and any potential
impact these may have on our mining operations.
The Company also relies on the maintenance of good title over the
authorisations, permits and licences which allow it to operate. Loss
of good title or access due to challenges instituted by issuers of
authorisations, permits or licences, such as government authorities or
land owners, may result in operational disruptions, adversely impact
project development cost or schedule or restrict access to land for
exploration and growth.
Legal processes are being followed to facilitate the lifting of a legal
injunction across the CentroGold project in Brazil, although there
is no certainty as to the timing of remedies noting the number of
stakeholders involved. The Company retains good relations with the
local community.
Business strategies, prospects and likely developments
This report sets out on pages 6–19, our business strategies and prospects for future financial years;
likely developments in OZ Minerals’ operations; and the expected results of our operations in future
financial years. We provide this information to help shareholders make an informed assessment about
the business strategies and prospects for the Consolidated Entity’s future financial years. We have not
included details that could give rise to a likely material detriment to OZ Minerals, such as information
that is commercially sensitive, confidential or could give a third party a commercial advantage.
4 0
ANNUAL AND SUSTAINABILITY REPORT 2018 REMU NERATION
OVERVIEW
AND REPORT
Remuneration
overview
Remuneration to executive key management personnel in 2018
Full details of the audited cost to the Company of executive key management personnel (KMP)
remuneration, calculated in accordance with the accounting standards and the Corporations Act 2001,
are available in Table 11 of the Remuneration Report (p. 56).
The table below (unaudited) which includes details of remuneration actually delivered to executive KMP
in 2018, has been prepared to be transparent with our shareholders regarding remuneration outcomes.
Remuneration to executive key management personnel
Cash salary
$
Short term
incentives(a)
$
Long term
incentives(b)
$
Superannuation(c)
$
Total
remuneration
$
Current
Andrew Cole
Managing Director
and CEO
Warrick Ranson
Chief Financial Officer
Mark Irwin(d)
Chief Commercial
Officer
Former
Mark Rankmore(e)
Head of People
and Performance
2018
2017
2018
2017
2018
2018
2017
779,710
801,600
3,012,017
20,290
4,613,617
739,976
626,250
504,710
350,700
38,052
–
464,062
324,585
–
–
–
–
10,024
1,376,250
20,290
3,615
20,290
875,700
41,667
808,937
449,710
239,700
904,897
20,290
1,614,597
386,832
211,200
–
13,168
611,200
(a) Actual STI accrued in 2018.
(b) Long term incentive is calculated by multiplying the number of performance rights vested with the respective price of OZ Minerals’ share at
the end of the performance period. Due to the change in vesting periods for LTI plans, two LTIs vested during 2018. The 2015 LTI vested on
30 June 2018 and the 2016 LTI vested on 31 December 2018.
(c) Represents direct contributions to superannuation funds based on quarterly contribution limits under Super Guarantee Charge regulations.
Amounts greater than the maximum superannuation level have been paid and included in cash salary.
(d) Appointed 22 January 2018. Pro-rata remuneration reflected.
(e) Mr Rankmore continues to be employed by the Company however as defined by Corporations Act (2001), ceased to be KMP effective
18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil. Remuneration in the table above reflects
a full year.
4 2
ANNUAL AND SUSTAINABILITY REPORT 2018 Letter from the Chairman of the
People & Remuneration Committee
Developments for remuneration
for 2019 and beyond
As communicated in last year’s remuneration
report, during 2018 the Company concluded a
review of its executive remuneration framework
to make sure it remained fit-for-purpose as
OZ Minerals continues to grow.
The review concluded that the current
framework continues to serve the Company
well but identified opportunities to create a
greater alignment between executives and
shareholders over the longer term whilst ensuring
remuneration remained market competitive,
easy to understand and able to be clearly
communicated to executives and shareholders.
In summary, the key changes to the remuneration
framework for 2019 include:
/
introducing an equity component to the STI
with 30% of an executive’s STI being paid
in equity subject to a two year holding lock.
Maximum STI opportunities will be increased
to 100% of TFR for KMP and 150% for the
CEO to bring overall remuneration in line with
market. The process for setting KPIs and
assessing performance against them will remain
unchanged and the outcomes will continue to
be reported to shareholders annually.
/ replacing the absolute share price performance
measure for the LTI plan with a measure of
All-In Sustaining Costs (AISC). We believe that
keeping AISC in the bottom half of the cost
curve over the long term is a key strategic driver
of long-term performance. Executives will be
eligible for a full payout of this component
of LTI if company wide AISC over the vesting
period is in the bottom quartile. 30% of
LTI will be eligible to vest according to AISC
performance with 70% continuing to be tested
by RTSR (relative total shareholder return), in
each case over a three year vesting period,
which will remain unchanged.
/
introducing a holding lock on equity which
vests under future LTI plans, which will require
executives to hold any vested LTI for a period
of two years beyond the initial three year
performance period.
/ broadening the scope of our malus and
clawback provisions to include circumstances
that bring the company into disrepute, or any
catastrophic environmental or safety incident.
Dear shareholders,
On behalf of the Board of Directors, I am
pleased to provide you with the 2018
Remuneration Report for OZ Minerals.
2018 was a year of strong performance for
the Company. We reached or exceeded our
production guidance at Prominent Hill and
met cost guidance at Prominent Hill, materially
advanced the development of Carrapateena,
pursued our growth strategy through the
acquisition of Avanco (a company with an
operating asset and a number of advanced
exploration projects in Brazil) and continued to
develop our exploration pipeline with new sites in
Sweden and Peru. Shareholders benefited from
a strong NPAT of $222.4 million and dividends of
23 cents per share.
The success of the Company during the year
was a direct result of the talent, hard work and
dedication of the Company’s employees and
stakeholders. More detail on the Company’s
performance is contained in the Director’s Report.
Remuneration outcomes in 2018
As in previous years, we continued to ensure
that remuneration outcomes reflect the
performance of the Company and were aligned
to shareholders’ expectations.
Key outcomes for 2018
/ Executive salaries were increased as detailed
in last year’s report.
/ The strong performance of the Company
against the KPIs set by the Board for the
2018 year supported short term incentive
awards to KMP of 83.3% on average of
their maximum annual short term incentive
opportunity. Details of the KPI outcomes
can be found in section 3.2 of the
Remuneration Report.
/ The Board awarded 83.5% of the maximum
annual short term incentive opportunity to
the Managing Director and Chief Executive
Officer, Andrew Cole reflecting the strong
performance of the Company and his
leadership during 2018.
/ Vesting of performance rights to Andrew Cole
/ 154,344 performance rights for the 2015
LTI plan, vested in June 2018 at 100%
/ 177,756 performance rights for the 2016
LTI plan, vested in December 2018 at 88.34%
As foreshadowed in our report last year, the
Board decided to increase the fees paid to
Non-Executive Directors in September by an
average of 5% noting that directors fees had not
been increased in six in both scale and complexity.
Details of directors fees can be found in section
six of this report.
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introducing a requirement for executives and
Non-executive Directors to acquire shares in the
company equal to 100% of base fee for Non-
executive Directors (over five years), 100% of
fixed remuneration for the CEO and 50% for
KMPs and other senior executives.
Further details of the changes being implemented
can be found in section nine of the Remuneration
Report.
We believe these changes will put equity into
the hands of executives earlier and require them
to hold it for the long term, increasing the sense
of ownership of the Company amongst our
executives and encouraging decision making
aligned to creating longer term shareholder value.
These changes were made following extensive
consultation with major shareholders and proxy
advisors, and we are pleased that they were
strongly supported.
During the year, we also conducted a
comprehensive market benchmarking of executive
remuneration, mindful of the need to continue to
retain our key employees in a competitive market
as the Company grows. The benchmarking
demonstrated that whilst our fixed remuneration
was, in most cases, in line with our preferred
positioning, total remuneration was below our
preferred positioning of toward 75th percentile for
outperformance outcomes. We chose to address
this by holding most executive fixed remuneration
at around 2018 levels and increasing executive
STI opportunities as outlined above.
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In the case of KMP, benchmarking supported
modest increases to fixed remuneration for:
/ Andrew Cole from $800,000 to $850,000 per
annum recognising the increased scale and
complexity of the company
/ Warrick Ranson from $525,000 to $565,000
reflecting market movements; and
/ Mark Irwin from $525,000 to $545,000
reflecting his increased accountabilities.
We also reviewed the RTSR comparator group
for the 2019 LTI award. Avanco, Nevsun and
Turquoise Hill will be removed and Metals X
Limited and Central Asia Metals Plc will be added,
bringing the total number of companies in the
comparator group to 14.
The Board is determined to continue our focus
on the longer-term business strategy and
deliver consistent, well-aligned and transparent
remuneration outcomes.
Thank you for your ongoing support
of OZ Minerals.
Tonianne Dwyer
Chairman People & Remuneration Committee
Adelaide, 27 February 2019
ANNUAL AND SUSTAINABILITY REPORT 2018 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 2018. This Remuneration Report forms part
of the Directors’ Report and has been audited in accordance with the Corporations Act 2001.
1.0 Key management personnel
The Consolidated Entity’s key management personnel (KMP) during 2018 are listed in Table 1 and
consist of the Non-executive Directors (NED) and executive KMP who are accountable for planning,
directing and controlling the affairs of the Company and its controlled entities.
Table 1 – KMP during 2018
Executive KMP
Andrew Cole
Warrick Ranson
Mark Irwin
Former
Mark Rankmore
Non-executive Directors
Rebecca McGrath
Tonianne Dwyer
Peter Wasow
Charlie Sartain
Marcelo Bastos
Former
Charles Lenegan
Julie Beeby
Peter Tomsett
Position
Period as KMP during the year
Managing Director and CEO
All of 2018
Chief Financial Officer
All of 2018
Chief Commercial Officer
Appointed 22 January 2018
Head of People and Performance
Ceased as KMP effective 18 April 2018
Independent Chairman
Independent NED
Independent NED
Independent NED
Independent NED
Independent NED
Independent NED
Independent NED
All of 2018
All of 2018
All of 2018
Appointed 1 August 2018
Appointed 1 September 2018
Retired 24 April 2018
Resigned 4 May 2018
Resigned 1 August 2018
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2.0 Remuneration policy
2.1 Overview of remuneration policy and practices
The remuneration principles (Table 2) demonstrate the links between remuneration and business strategies and their impact on
OZ Minerals actual remuneration arrangements. The overriding business objective is to achieve superior returns compared to the
Company’s peers in the resources sector.
Table 2 – Remuneration principles
Business needs and
market alignment
Simplicity and equity
Performance and
reward linkages
Market positioning
and remuneration mix
Talent management
OZ Minerals remuneration policy is focused on achieving our corporate objectives. Remuneration is set with regard to market
practices and aligned with achieving shareholder returns.
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.
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 level
to maximise performance, accountability and reward linkages.
Fixed remuneration is set at a competitive level and positioned to take in to account the challenges of attracting and retaining
high performers in business critical roles, particularly in the mining industry. The ‘at-risk’ components of remuneration depend on
challenging goals and are focused on incentivising executive KMP to achieve business critical objectives and shareholder returns.
Remuneration policy is tightly linked with our performance and talent management frameworks to reward and recognise employees
who achieve their role accountabilities and to engage future leaders.
Governance, transparency
and communication with
shareholders
OZ Minerals is committed to developing and maintaining remuneration policies and practices that maximise value. We will openly
communicate these to shareholders and other relevant stakeholders, and will always be within legal, regulatory and industrial
requirements. The Board has absolute discretion to develop, implement and review key aspects of remuneration.
2.2 Remuneration consultants
The Board of Directors and the People & Remuneration Committee seek and consider advice from independent remuneration consultants
to ensure that they have all of the relevant information at their disposal to determine executive KMP remuneration. Remuneration
consultant engagement is governed by internal protocols that set the parameters around the interaction between management and
consultants to minimise the risk of any undue influence and ensure compliance with the Corporations Act 2001.
PROTO COLS
Under the protocols adopted by the Board and the People & Remuneration Committee:
/ remuneration consultants are engaged by and report directly to the Board or the People & Remuneration Committee
/ the committee must, in deciding whether to approve the engagement, have regard to any potential conflicts of interest including
factors that may influence independence such as previous and future work performed by the Committee and any relationships that
exist between any executive KMP and the consultant
/ communication between the remuneration consultants and executive KMP is restricted to minimise the risk of undue influence on
the remuneration consultant
/ where the consultant is also engaged to perform work that does not involve the provision of a remuneration recommendation,
prior approval of the Board or People & Remuneration Committee must be obtained in certain circumstances where
the consultant continues to be engaged to provide remuneration recommendations.
The Board and the People & Remuneration Committee use remuneration consultants’ advice and recommendations from time to time.
The Board makes its decisions after it considers the issues and the advice from the People & Remuneration Committee and consultants.
During 2018, Guerdons and PwC were engaged to review the Company’s executive remuneration framework and to assist with the
implementation of the changes to the Executive Remuneration Framework outlined elsewhere in this report. The work completed did
not constitute a remuneration recommendation in accordance with the Corporations Act 2001. The fee for work conducted by PwC was
$99,465.3 (including GST) and the fee for work conducted by Guerdon was $98,381.4 (including GST). In addition, EY was engaged to
undertake a market benchmarking review of executive remuneration. Their analysis was considered by the Remuneration Committee and
the Board in forming their views on remuneration matters. The work completed did not constitute a remuneration recommendation in
accordance with the Corporations Act 2001. The fee for work conducted was $72,512.0 (including GST).
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2.3 Review of executive KMP remuneration
Executive KMP remuneration levels are reviewed annually by the Board with help from the People
& Remuneration Committee and external remuneration consultants as required. The review makes sure
that executive KMP remuneration remains consistent with the Company’s remuneration policies and
guiding principles, and considers:
/ the Company’s remuneration policy and practices
/ relevant market benchmarks using salary survey data from the Australian industrial
and resources sectors
/ the skills and experience required of each role in order to grade positions accurately
and attract high calibre people
/
individual performance against role expectation, set objectives, leadership behaviours
and development plans
/ Company strategy, business plans and budgets.
2.4 Executive KMP remuneration components
Table 3 – Remuneration mix
Total fixed remuneration (TFR)
The regular base reward that reflects the job size,
role, responsibilities and professional competence
of each executive, according to their knowledge,
experience and accountabilities and considering
external market relativities.
At-risk remuneration
Short term incentive (STI)
Long term incentive (LTI)
A variable, performance based, annual cash incentive
plan designed to reward high performance against
challenging, clearly defined and measurable objectives.
These are based on a mixture of targets and are set to
incentivise superior performance with specific targets or
metrics in each category.
From 2019, STI will include an equity component.
The equity component of the at-risk reward opportunity
which is linked to the Company’s medium to long
term TSR and share price performance. A three-year
performance period applies.
From 2019, AISC will replace the share price
performance measure.
The mix of fixed and at-risk remuneration varies depending on the role and grading of executives
as well as the performance of the Company and individual executives. More senior positions have
a greater proportion of at-risk remuneration. If maximum at-risk remuneration is earned, the ratio
percentage of fixed to at-risk remuneration would be as follows.
2018 executive KMP remuneration mix(a)
Managing Director and CEO
27.0%
32.4%
Chief Financial Officer
Chief Commercial Officer
34.5%
34.5%
Head of People and Performance
40.0%
Fixed
STI
LTI
(a) Remuneration mix not based on actuals.
27.6%
27.6%
24.0%
40.6%
37.9%
37.9%
36.0%
In 2019 the remuneration mix will change. Refer to section nine for the changes.
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Table 4 – Questions and answers about executive KMP remuneration
Total fixed remuneration (TFR)
What is included in total fixed remuneration?
When and how is fixed remuneration reviewed?
An executive KMP total fixed remuneration comprises salary and certain other benefits (including statutory
superannuation contributions) that may be taken in an agreed form, such as cash, leased motor vehicles and
additional superannuation, provided that no extra cost is incurred by the Company for these benefits.
Fixed remuneration is reviewed annually. Any adjustments to the fixed remuneration for the Managing Director
and CEO and other executive KMP must be approved by the Board after recommendations by the People &
Remuneration Committee. During the year, we also conducted market benchmarking of executive remuneration,
mindful of the need to continue to retain our key employees in a competitive market as the Company grows.
The benchmarking demonstrated that our fixed remuneration was, in most cases, in line with our preferred
positioning, toward 50th percentile.
Short term incentive (STI)
Why does the Board think an STI plan is appropriate? Variable performance-based remuneration strengthens the link between pay and performance. The purpose of
What are the performance conditions?
these programmes 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 that determined STI outcomes in 2018 were: (a) Company key performance indicators
(KPIs) and (b) individual KPIs.
The Company KPI hurdle in 2018, accounted for 80% of the STI award for the Managing Director and CEO and
50% of the STI award for other KMP and the balance was attributable to individual KPIs.
(a) Company KPIs
Company KPIs are set and weighted at the beginning of each year. They 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. The key areas of focus in 2018 included improving the Company’s operational and financial
performance, sustainability performance and progressing strategic growth objectives.
Table 4.1 – Company KPIs in 2018 that applied to executive KMP
KPI category
KPI example
% weighting
Operational and financial
EBITDA, net cash flow, corporate efficiency
Sustainability
safety improvement, safety behaviours, leadership effectiveness
Strategy and growth
concentrate production and sales, Carrapateena development,
growth pipeline
40
20
40
b) Individual KPIs
Individual KPIs vary for each executive KMP based on their accountabilities.
The Board assesses and sets the KPIs for the Managing Director and Chief Executive Officer award, and the
Managing Director and Chief Executive Officer assesses and sets the KPIs for each of the other executive KMP in
consultation with the Board.
Is there an overriding financial performance
condition or other condition?
Yes. The availability of the STI pool is at the discretion of the Board, which takes into account the interests of the
Company and shareholders. The Board can choose not to pay or reduce the amount of the STI otherwise payable.
How is the STI structured to reward
exceptional performance?
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.
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What is the value of the STI opportunity?
Table 4.2 – The target and maximum STI reward opportunity for executive KMP in 2018
Executive KMP
Andrew Cole
Warrick Ranson
Mark Irwin (a)
Mark Rankmore (b)
(a) Appointed 22 January 2018
STI at target
(as % of TFR)
Maximum STI
(as % of TFR)
84
56
56
42
120
80
80
60
(b) Mr Rankmore continues to be employed by the Company, however as defined by Corporations Act (2001), ceased to be KMP
effective 18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
The Managing Director and 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 People &
Remuneration Committee and the Board. The Board also reviews the performance assessment of all executives
who report directly to the Managing Director and CEO, with a view to understanding, endorsing and/or discussing
individual circumstances, performance, leadership behaviours and future development. The People & Remuneration
Committee and the Board assess the performance of the Managing Director and CEO against the performance
targets and objectives set for that year.
The Board considers the method of assessing STI as described above to be appropriate as the Managing Director
and CEO has oversight of their direct reports and the day-to-day function of the Company, whilst the Board and
People & 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.
This is at the Board’s discretion 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 take into account 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
/ 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 shareholder returns.
How is STI assessed?
What happens to STI awards when
an executive ceases employment?
Long term incentive (LTI)
Why does the Board consider an
LTI plan to be appropriate?
How is the award delivered?
The LTI is granted using performance rights under the OZ Minerals LTI plan (detailed below).
Was a grant made in 2018?
A grant was made on 6 February 2018 to all continuing participants in the LTI plan, excluding the CEO whose grant
was made on 24 April. The number of performance rights granted to each executive was calculated as their LTI
dollar opportunity divided by the adjusted five-day volume weighted average price of OZ Minerals as at the start of
the performance period. The performance period for the 2018 LTI grant is 1 January 2018 to 31 December 2020.
What was the value of the
2018 grant for executive KMP?
Table 4.3 – The LTI grant to executive KMP in 2018
Executive KMP
Andrew Cole
Warrick Ranson
Mark Irwin (a)
Mark Rankmore (b)
(a) Appointed 22 January 2018.
2018 LTI grant
as % of TFR
2018 LTI grant allocation
$
150
90
90
70
1,200,000
472,500
472,500
329,000
(b) Mr Rankmore continues to be employed by the Company, however as defined by Corporations Act (2001), ceased to be KMP
effective 18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
4 9
What are the performance conditions?
The two performance conditions, referred to as the vesting conditions are: (a) the executive KMP meeting the service
condition; and (b) OZ Minerals meeting the LTI performance 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 2018 are the same as 2017 and are as follows:
1. Total shareholder return (TSR)
Relative TSR is the primary LTI performance hurdle measured against a comparator group. The Board considers TSR
to be an appropriate performance hurdle because it ensures that a proportion of each participant’s remuneration is
linked to shareholder value and 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 it is the most
widely used long term incentive hurdle in Australia. The Company employs an independent organisation to calculate
the TSR ranking to ensure an objective assessment of the relative TSR comparison. Performance rights in respect to
this hurdle will vest in accordance with the following table.
Table 4.4 – Performance rights vested according to total shareholder return
TSR of OZ Minerals relative to TSRs
of constituents of the nominated peer group
Proportion of 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 is 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 to this hurdle
will vest in accordance with the following table.
Table 4.5 – Performance rights vested according to absolute share price growth
OZ Minerals share price growth over
the performance period
Proportion of 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.
It is standard market practice to link individual executive performance (including mandatory service periods)
and Company performance to the vesting of performance rights. The conditions link executives’ retention and
performance 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 achieve
shareholders returns.
Why were the performance conditions chosen?
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What is the comparator group?
The comparator companies selected for the 2018 LTI plan are considered to be alternative investment vehicles for
local and global investors. They are impacted by commodity prices and cyclical factors in a similar way to OZ Minerals.
The Comparator group is reviewed annually for market changes.
Table 4.6 – 2018 comparator companies
Comparator company
Capstone Mining Corp.
HudBay Minerals Inc.
KAZ Minerals Plc
Lundin Mining Corporation
Sandfire Resources NL
Taseko Mines Limited
Nevsun Resources Ltd
Turquoise Hill
Independence Group
Western Areas
AVANCO Resources
Dundee Precious Metals
First Quantum Minerals
Antofagasta Plc
Freeport McMoran
Exchange
ASX/ticker code
TSX
TSX
LSE
TSX
ASX
TSX
TSX
NYSE
ASX
ASX
ASX
TSX
TSX
LSE
NYSE
CS
HBM
KAZ
LUN
SFR
TKO
NSU
TRQ
IGO
WSA
AVB
DPM
FM
ANTO
FCX
What happens to performance rights granted under
the LTI plan when an executive ceases employment?
What happens in the event of a change of control?
Is there any ability for the Company to ‘clawback’
LTI awards?
Does the Company have a policy in relation to
margin loans and hedging at risk remuneration?
If the executive’s employment is terminated for cause, 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 grant.
In the event of a takeover or change of control at OZ Minerals, the Board has the discretion to determine that the
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 on the portion
of the relevant performance period that has elapsed up to the change of control. The Board retains discretion to
determine if the remaining performance rights will vest or lapse.
In the event of fraud, dishonesty, gross misconduct or material misstatement of the financial statements, the Board
may make a determination that could include 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 was obtained. A minor amendment was made to provide the Board with the flexibility to make
adjustments to any awards granted under the STI or LTI plans in the event that there is a catastrophic safety or
environmental event, in which an adjustment to executive bonuses is warranted.
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. 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.
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2018 Alignment Plan
Why did the Board consider it necessary
to create the 2018 Alignment plan?
The Alignment plan was designed to support the retention of key employees during the critical period of
the development of Carrapateena.
How was the award delivered?
Was a grant made in 2018?
The 2018 Alignment plan was granted using performance rights under the OZ Minerals Alignment Plan
(detailed below).
A grant was made on 13 March 2018 to all participants. The number of performance rights granted to each
executive was calculated as 20% of their fixed remuneration divided by the adjusted five-day volume weighted
average price of OZ Minerals as at the start of the performance period. The performance period for the 2018
Alignment Plan was 1 January 2018 to 31 December 2019.
What was the value of the 2018
grant for executive KMP?
Table 4.7 - The 2018 Alignment plan to executive KMP in 2018
Executive KMP
Warrick Ranson
Mark Irwin(a)
Mark Rankmore(b)
(a) Appointed 22 January 2018
2018 Alignment plan grant
as % of TFR
2018 Alignment plan grant
allocation $
20
20
20
105,000
105,000
94,000
(b) Mr Rankmore continues to be employed by the Company, however as defined by Corporations Act (2001), ceased to be KMP
effective 18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
What are the vesting conditions?
The vesting condition for each grant is a service condition, to be employed by the Group on 31 December 2019 and
has not given notice of intention to resign.
What happens to performance rights granted under
the 2018 Alignment plan when an executive ceases
employment?
If the executive’s employment is terminated for cause, 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 unvested Rights will remain on foot subject to the original Vesting Conditions.
What happens in the event of a change of control?
In the event of a takeover or change of control at OZ Minerals, the Board has the discretion to determine that the
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 on the portion
of the relevant performance period that has elapsed up to the change of control. The Board retains discretion to
determine if the remaining performance rights will vest or lapse.
3.0 Company performance and remuneration outcomes
3.1 Company performance
We present a summary of OZ Minerals’ business performance as measured by a range of financial
and other indicators.
Table 5 – Company performance(a)
Measure
Underlying EBITDA – $ million
Net profit/(loss) after income tax – $ million
Net cash inflow from operating activities
– $ million
Basic earnings/(loss) per share – cents
Share price at end of year – $
Dividends paid per share – cents
2018
540.4
222.4
449.6
71.5
8.80
23
2017
539.4
231.1
342.9
77.4
9.16
20
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
(a) Refer to the Financial Review section (p. 33) in the Director’s Report for a commentary on the consolidated results, including underlying
performance of the Consolidated Entity.
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The Chairman and the Board, with the assistance of the Chair of the People & Remuneration Committee,
reviewed the Managing Director and CEO’s performance against 2018 KPIs. The Managing Director and
CEO reviews the performance of each of the other executive KMP against their 2018 individual KPIs and
seeks the approval of the Board and People & Remuneration Committee to determine award outcomes.
The Company scorecard contains enterprise level KPIs. The scorecard was assessed against the KPIs in
2018, which resulted in a Board-approved score of 3.9 out of five.
Table 6 – 2018 summary company KPI performance
Measure
KPI
Link to
strategy
2018 performance summary
Outcome
Exceeded
Partly
achieved
Exceeded
Exceeded
Exceeded
Target EBITDA, flexed for price and exchange, exceeded and
Carrapateena on track for delivery as budgeted. The outcome
reflected consistent performance from Prominent Hill operations
and the advancement of non-core infrastructure requirements
as planned.
A TRIFR of 7.52 above target of 7.11. All significant incidents
were reported, investigated and subsequently reviewed by the
Executive Committee for corrective action.
Leadership Capability and capacity improved across the company.
Leadership effectiveness was also demonstrated by continued
improvements in developing innovation across the Company and
ongoing improvements in cost control, operational performance
and progressing growth opportunities consistent with the
Company strategy.
Below ground depletion replaced and confidence of reserve
improved. Expansion study underway at Prominent Hill. Province
expansion studies progressed and drilling program advanced to
improve resource status.
Avanco acquisition – Selection and execution process
successfully completed with integration on track, including a
series of technical reviews underway.
Exploration has been successful with a likely discovery at
Eloise in north Queensland, and new inferred resources around
Carrapateena at Fremantle Doctor and Khamsin.
Customer
focus
All concentrate produced by the Prominent Hill operation was
sold in line with customer contracts with no breach in contract
specifications, whilst maintaining sufficient inventory.
Exceeded
Financial and
operations
(40% total)
Sustainability
(20% total)
Leadership &
culture (10%)
Financial
delivery (30%)
Lean and
innovative
Non-core
infrastructure
(10%)
Safety
performance
(10%)
Capital
discipline
How
We Work
Together
How We
Work
Together
Organic
growth (20%)
Global
copper
Pipeline
growth (10%)
Devolved
and agile
Strategy
and growth
(40% total)
Concentrate
quantity and
quality, sales
and customer
relationships
(10%)
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Table 7 – STI award percentage for executive KMP
In accordance with the procedure set out in Section 2.0, an assessment was undertaken of the
performance of each of the eligible executive KMP against their 2018 KPIs. Personal KPIs reflect
strategic business objectives and deliverables in an individual’s area of direct accountability and
leadership of safety, culture, innovation and governance across their teams and the company as
a whole.
Executive KMP
Company KPI
performance(a)
Individual KPI
performance
Overall performance
outcome
(as per cent of maximum
performance)
(as per cent of maximum
performance)
(as per cent of maximum
performance)
Current
Andrew Cole
Warrick Ranson
Mark Irwin (b)
Former
Mark Rankmore(c)
83.5%
83.5%
83.5%
83.5%
83.5%
83.5%
80.9%
87.5%
83.5%
83.5%
82.2%
85.5%
(a) Andrew Cole STI composition is 80% Company and 20% Individual. Other KMP is 50% Company and 50% Individual.
(b) Appointed 22 January 2018.
(c) Mr Rankmore continues to be employed by the Company, however as defined by Corporations Act (2001), ceased to be KMP effective
18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
Table 8 – STI payments to Executive KMP in 2018
Name
Payment
Maximum potential
value of payment(a)
Per cent of maximum
grant awarded(b)
Per cent of maximum
grant forfeited
Andrew Cole
Warrick Ranson
Mark Irwin (c)
Former
$
801,600
350,700
324,585
$
960,000
420,000
394,685
Mark Rankmore(d)
70,716
82,668
%
83.5
83.5
82.2
85.5
%
16.5
16.5
17.8
14.5
(a) The minimum potential value of the payments was nil. The maximum potential value of payment represents the achievement of
stretch performance.
(b) Rounded to the nearest whole decimal place.
(c) Appointed 22 January 2018. Pro-rata remuneration reflected.
(d) Pro-rata remuneration reflected. Mr Rankmore continues to be employed by the Company, however as defined by Corporations Act (2001),
ceased to be KMP effective 18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
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3.3 LTI performance and outcomes
Performance rights granted under the OZ Minerals LTI Plan are granted for no consideration.
Performance rights carry no dividend or voting rights. One ordinary share in the Company will be
allocated on vesting of a performance right. The vesting condition for each grant is the relative TSR
performance and absolute share price growth 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 vested or lapsed during the year are
set out in Table 15. Additional details are set out in Note 11 to the Financial Statements.
3.4 2018 Alignment plan
Performance rights granted under 2018 Alignment plan are a one-off allocation for retention purposes.
Performance rights carry no dividend or voting rights. One ordinary share in the Company will be
allocated on vesting of a performance right. The vesting condition for each grant is a service condition,
where the executive needs to remain employed by the Group on 31 December 2019 and has not given
notice of intention to resign.
The LTI awards on foot during the year (including those granted as part of the 2018 LTI and 2018
Alignment awards) are detailed below.
Table 9 – LTI awards on foot
Grant date
Rights
Maximum
value of grant(a)
$
Fair value per
performance right(b)
$
Performance period
Expiry date
vesting outcome
Current
Andrew Cole
24 April 2018
130,285
1,390,141
24 July 2017
135,446
1,353,106
5 July 2016
201,223
1,722,469
21 July 2015
154,344
Warrick Ranson
13 March 2018
11,400(f)
6 February 2018
51,300
Mark Irwin (c)
13 March 2018
11,400(f)
6 February 2018
51,300
Former
Mark Rankmore(d)
13 March 2018
10,206(f)
6 February 2018
35,720
27 January 2017
33,711
16 March 2016
74,184
21 July 2015
35,577
754,742
121,638
547,371
121,638
547,371
108,898
381,132
336,773
635,015
173,972
5.87
4.29
3.88
3.47
8.81
6.03
8.81
6.03
8.81
6.03
6.20
3.56
2.82
1/01/2018 - 31/12/2020
15/2/21
To be determined
1/01/2017 - 31/12/2019
15/2/20
To be determined
1/01/2016 - 31/12/2018
1/07/2015 - 30/06/2018
15/2/19
15/8/18
88.3% vested(e)
100% vested
1/01/2018 - 31/12/2019
15/2/20
To be determined
1/01/2018 - 31/12/2020
15/2/21
To be determined
1/01/2018 - 31/12/2019
15/2/20
To be determined
1/01/2018 - 31/12/2020
15/2/21
To be determined
1/01/2018 - 31/12/2019
15/2/20
To be determined
1/01/2018 - 31/12/2020
15/2/21
To be determined
1/01/2017 - 31/12/2019
15/2/20
To be determined
1/01/2016 - 31/12/2018
1/07/2015 - 30/06/2018
15/2/19
15/8/18
Vested(e)
Vested
(a) The minimum value of each grant is nil. The maximum value of grant is calculated by applying the highest price of OZ Minerals’ shares during the
year to the rights issued during the year.
(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.
(c) Appointed 22 January 2018.
(d) Mr Rankmore continues to be employed by the Company however as defined by Corporations Act (2001), ceased to be KMP effective
18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
(e) As Katanga Mining Limited is now a controlled entity of Glencore, the Board exercised its discretion under the terms of the 2016 LTI grant to
remove Katanga Mining Limited from the relative TSR comparator group.
(f) 2018 Alignment plan.
5 5
4.0 Executive KMP employment arrangements
Remuneration arrangements for executive KMP are formalised in executive service agreements. Each agreement provides for the payment
of fixed remuneration, performance-related cash bonuses under the STI plan, other benefits, and participation in the Company’s LTI plan.
Table 10 – Executive KMP key provisions
Term of contract
2018 TFR
Notice period
Termination benefit
Name
Current
Andrew Cole
Permanent – ongoing until notice
has been given by either party.
$800,000
Warrick Ranson
Permanent – ongoing until notice
has been given by either party.
$525,000
Mark Irwin
Permanent – ongoing until notice
has been given by either party.
$525,000
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 required for termination by Company
for cause.
Twelve months fixed
remuneration in the case of
termination by the Company.
Three months’ notice by either party. Company may
elect to make payment in lieu of notice.
No notice required for termination by Company for cause.
Nine months fixed
remuneration in the case of
termination by the Company.
Three months’ notice by either party. Company may
elect to make payment in lieu of notice.
No notice required for termination by Company for cause.
Nine months fixed
remuneration in the case of
termination by the Company.
Former
Mark Rankmore
Permanent – ongoing until notice
has been given by either party.
$470,000
Three months’ notice by either party. Company may
elect to make payment in lieu of notice. No notice
required for termination by Company for cause.
Six months fixed remuneration
in the case of termination by
the Company.
5.0 Executive KMP remuneration
Table 11 – Total rewards to executive KMP
Salary,
fees and
allowances
$
Current
Andrew Cole
Managing Director & CEO
2018
779,710
2017(h)
739,976
Benefits &
Allowances(b)
$
–
–
Accrued
annual
leave(a)
$
Super-
annuation(d)
Short term
incentive
Other
long term
benefits(c)
value of
performance
rights(e)
Total
remuneration
Performance
Related
$
$
$
$
$
%
(5,554)
20,290
801,600
26,142
816,782
2,438,970
(15,379)
10,024
626,250
16,744
621,591
1,999,206
Warrick Ranson
Chief Financial Officer
Mark Irwin (f)
Chief Commercial Officer
Former
Mark Rankmore(g)
Head of People
and Performance
2018
504,710
104,603
33,761
20,290
350,700
4,158
141,187
1,159,409
2017
38,052
2018
464,062
2018
132,673
2017(h)
386,832
–
–
–
–
1,141
3,615
–
56
–
11,254
20,290
324,585
1,781
141,187
42,864
963,159
(2,127)
5,986
70,716
3,912
92,557
303,717
(12,923)
13,168
211,200
7,143
195,103
800,523
(a) Annual leave has been separately categorised and is measured on an accrual basis and reflects
the movement in the accrual over the 12 month period. Any reduction in accrued annual leave
reflects more leave taken/cashed out than that which accrued in the period.
(b) Other benefits 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. Other benefits paid to Mr Ranson in
2018 include payment of relocation costs for Mr Ranson and his family from Perth to Adelaide.
(c) Represents the net accrual movement for Long Service Leave (LSL) over the 12 month period
which will only be paid if Executive KMP meets the required service conditions.
(d) Represents direct contributions to superannuation funds. Amounts greater than the maximum
superannuation level have been paid and included in cash salary.
(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) Appointed 22 January 2018. Pro-rata remuneration reflected.
(g) Mr Rankmore continues to be employed by the Company however as defined by Corporations
Act (2001), ceased to be KMP effective 18 April 2018 due to being appointed to manage the
integration of Avanco Resources in Brazil. Pro-rata remuneration reflected.
(h) The prior year comparative value of performance rights has been adjusted to include
proportionate expense in relation to the 2015 & 2016 LTIP grants. As a result, the value of
performance rights disclosed for Andrew Cole has increased from $135,731 to $621,591 and
total remuneration from $1,513,346 to $1,999,206. The value of performance rights disclosed
for Mark Rankmore has increased from $66,357 to $195,103 and total remuneration from
$671,777 to $800,523.
5 6
66.4
62.4
42.4
–
48.4
53.8
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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. As approved at the OZ Minerals General
Meeting on 18 July 2008, the maximum fees payable per annum is $2,700,000 in total. As highlighted
in the 2017 report, during 2018 the Board undertook a benchmarking review and decided to increase
the fees paid to Non Executive Directors and address anomalies as between committees. Fees had not
been increased in six years during which the Company has grown in scope and complexity. The revised
fees are set out below and came into effect on 1 September 2018.
Table 12 – Details of NED remuneration with effect from September 2018
Fees
Board
Audit
Sustainability
People & Remuneration
Chairman
Member
$ per annum
$ per annum
328,921
43,056
26,910
26,910
126,330
21,528
13,455
13,455
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 listed in Table 12, and
are entitled to be reimbursed for travel 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.
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6.2 Total fees paid to NEDs
In 2018, NEDs received $1,067,751 (2017: $1,141,368) in total fees, compared to the maximum
approved fees payable of $2,700,000.
Table 13 – Total remuneration paid to NEDs
Current
Rebecca McGrath
Chairman
Tonianne Dwyer
Non-executive Director
Peter Wasow
Non-executive Director
Charlie Sartain(c)
Non-executive Director
Marcelo Bastos(d)
Non-executive Director
Former
Julie Beeby(e)
Non-executive Director
Peter Tomsett(f)
Non-executive Director
Charles Lenegan(g)
Non-executive Director
2018
2017
2018
2017
2018
2017
2018
2018
2018
2017
2018
2017
2018
2017
Board fees and
cash benefits
Committee
fees
Superannuation(a)
Total fixed
remuneration
$
328,464
$
–
241,654
17,160 (b)
122,320
93,723
122,320
20,052
52,136
44,850
31,629
47,968
5,382
19,734
$
$
20,290
18,808
15,881
11,908
16,177
2,416
6,828
348,754
277,622
183,051
137,260
186,465
27,850
78,698
42,110
4,483
4,426
51,019
41,848
120,314
70,619
93,723
40,105
120,314
11,232
28,002
18,954
23,244
17,940
53,820
5,043
14,090
8,509
11,112
5,514
16,543
58,123
162,406
98,082
128,079
63,559
190,677
(a) Represents direct contributions to superannuation funds based on quarterly contribution limits under Super Guarantee Charge regulations.
Amounts greater than the maximum superannuation level have been paid and included in cash salary.
(b) Committee fee were paid during the period not as Chairman.
(c) Appointed Non-executive Director 1 August 2018.
(d) Appointed Non-executive Director 1 September 2018.
(e) Ceased to be Non-executive Director 4 May 2018.
(f) Ceased to be Non-executive Director 1 August 2018.
(g) Ceased to be Non-executive Director 24 April 2018.
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7.0 Equity instrument disclosure relating to KMP
The movement in the number of shares held by each KMP during the year is set out below.
Table 14 – KMP shareholdings
Non-executive Directors
Balance at 1 January 2018
or date becoming KMP
Shares acquired on
exercise of rights
Net other
movements
Balance at 31 December 2018
or date ceasing to be KMP(a)
Current
Rebecca McGrath
Tonianne Dwyer
Peter Wasow
Charlie Sartain(b)
Marcelo Bastos(c)
Former
Julie Beeby(d)
Peter Tomsett(e)
Charles Lenegan(f)
Executive KMP
Current
Andrew Cole
Warrick Ranson
Mark Irwin (g)
Former
Mark Rankmore(h)
Total
33,035
10,000
–
70,000
–
14,000
–
20,750
–
–
–
–
–
–
–
–
10,000
154,344
–
–
–
–
–
–
4,900
–
8,000
–
–
–
10,000
–
–
–
1,000
–
157,785
154,344
23,900
(a) The following number of shares (included in the holdings above) were held on behalf of KMP (i.e indirectly beneficially held shares) as at
31 December 2018.
(b) Appointed Non-executive Director 1 August 2018.
(c) Appointed Non-executive Director 1 September 2018.
(d) Ceased to be Non-executive Director 4 May 2018.
(e) Ceased to be Non-executive Director 1 August 2018.
(f) Ceased to be Non-executive Director 24 April 2018.
(g) Appointed 22 January 2018.
(h) Mr Rankmore continues to be employed by the Company however as defined by Corporations Act (2001), ceased to be KMP effective 18 April
2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
37,935
10,000
8,000
70,000
–
14,000
10,000
20,750
164,344
–
1,000
–
336,029
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Table 15 – KMP performance rights holdings
The movement in the number of performance rights for KMP during the year is set out below:
Balance at
1 January 2018
Granted as
remuneration
value of rights
granted(a)
vested and
exercised
value of rights
vested(d)
Lapsed
Balance at
31 December 2018(e)
491,013
130,285
–
–
143,472
634,485
62,700
62,700
45,926
301,611
$
764,347
410,446
410,446
$
154,344
3,012,017
23,467
–
–
–
–
–
–
305,154
35,577
904,897
8,651
1,890,393
189,921
3,916,914
32,118
443,487
62,700
62,700
145,170
714,057
Current
Andrew Cole
Warrick Ranson
Mark Irwin (b)
Former
Mark Rankmore(c)
Total
(a) The fair value of the performance rights granted to Mr Cole on 24 April 2018 was calculated at the grant date as $5.87 and the fair value of the
performance rights granted to other KMP on 6 February 2018 was calculated at the grant date as $6.03. Subject to the achievement of relevant
performance conditions, these rights would be expected to vest on 31 December 2020.
The fair value of the performance rights granted to other KMP on 13 March 2018 pursuant to the 2018 Alignment Plan was calculated at the
grant date as $8.81. Subject to the achievement of relevant service conditions, these rights would be expected to vest on 31 December 2019.
The fair values have been calculated by an independent advisor based on a Monte Carlo simulation model. No price is payable on acquisition
of performance rights, and there is no exercise price.
(b) Appointed 22 January 2018.
(c) Mr Rankmore continues to be employed by the Company however as defined by Corporations Act (2001), ceased to be KMP effective
18 April 2018 due to being appointed to manage the integration of Avanco Resources in Brazil.
(d) Value of rights vested calculated as number of rights vested times closing OZL price on vesting date.
(e) Includes 177,756 rights vested but not exercised by Mr Cole and 65,533 rights vested but not exercised by Mr Rankmore at 31 December 2018.
8.0 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.
9.0 Executive remuneration framework changes
The Board believes that executive remuneration is a key enabler of the delivery of the group’s strategy
for the benefit of shareholders, customers, employees and our communities. During 2018, we
undertook a review of executive remuneration, to ensure that the framework remains fit-for-purpose
as OZ Minerals continues to grow. The result of that review suggested that OZ Minerals had an
opportunity to create a greater alignment of executive pay outcomes with the shareholder experience
and simplify a framework that executives perceived to be complicated and in many cases something
they had limited ability to influence.
As a result, we have proposed some refinements to the framework in 2019 that better address our
objectives of greater alignment between shareholder and executive. These changes will, if performance
targets are met, put equity into the hands of executives earlier and require them to hold it for the long
term, increasing the sense of ownership of the Company amongst our executives and encouraging
decision making aligned to creating longer term shareholder value.
This framework also provides a simple, market-aligned approach which builds on our existing
framework and meets our objectives of driving greater alignment between shareholders and
executives. The changes are summarised in Table 16.
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Table 16 – Executive remuneration framework changes
Fees
Fixed pay
What’s changed?
Why?
/ No changes to our approach to fixed
/ Refinements have been made to at risk, STI and LTI, see below.
remuneration. We will continue to review our
executive remuneration levels annually to ensure
pay levels remain competitive to attract, motivate
and retain the best talent for OZ Minerals.
Short term incentive
/ 30% of the STI award will now be paid in equity
/ We wanted to increase the ownership mentality of our executive team by putting
which will be subject to a two year holding
lock and thereafter to minimum shareholding
requirements.
/ Increase maximum STI opportunity for KMP from
80 to 100% and for CEO from 120–150%.
shares in their hands sooner than the current long term incentive program.
/ STI equity deferral is best practice across the resources sector and the broader
Australian market, and it is a desire of the Board to reflect best practice in our
remuneration arrangements.
/ Deferred STI allows us a reasonable timeframe to more effectively apply malus
and ensure all awards reflect the true performance of an executive and the
company, once the impact of all decisions is known.
Long term incentive
/ Replacing absolute share price performance
measure with a strategic / financial measure
based on All In Sustaining Costs (AISC).
/ We are also introducing a holding lock on the
LTI plan, which will require executives to hold
any vested LTI for a period of two years beyond
the initial three year performance period and
thereafter subject to minimum shareholding
requirements.
Shareholder requirement
/ Introducing a requirement for executives to
hold shares in the company. We are introducing
minimum shareholding guidelines of 100% of
fixed pay for the CEO and 50% of fixed pay for
KMPs, to be accrued over a reasonable period.
/ The NEDs will also have the requirement to
acquire shares in the company equal to 100%
of their annual base fee over a five year period.
/ We are proposing to introduce a new measure into the LTI program
associated with strategy to better align business and shareholder outcomes
with executive pay outcomes, and provide a measure that executives are better
able to influence. Maintaining costs in the bottom half of the cost curve will
create long term shareholder value.
/ A two-year holding lock prevents senior executives who receive LTI shares after
the three-year performance period from selling their shares for two years. This is
firmly weighted towards driving long term sustainable strategic outcomes that
deliver shareholder value.
/ Introducing a holding lock to the LTI further encourages our executives to
create meaningful shareholdings in OZ Minerals, which is aligned to our
objective of enhancing the way our reward arrangements align shareholder
and executive interests.
/ The Board believes that this total five-year timeframe is sufficient to allow the
full impact of executive decision-making to flow through to the share price, and
thus directly align the wealth of the executive with that of shareholders.
/ By requiring executives to build and hold a meaningful shareholding in the
company, we believe we will strengthen the alignment of executives with
shareholders and foster longer term thinking.
/ Minimum shareholdings for directors reflect market practice and similarly
create alignment.
6 1
SUSTAINABILITY
REPORT
SUP P ORT IN G DOCUM EN TS
OZ Minerals’ company website
ozminerals.com
voluntary disclosure
Global Reporting Initiative (GRI) Standards
globalreporting.org
External benchmarking
Dow Jones Sustainability Indices
sustainability-indices.com
FTSE4Good
ftse.com
Sustainable development
Sustainable Development Goals
sustainabledevelopment.un.org
Associations
International Copper Association Australia
copper.com.au
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ANNUAL AND SUSTAINABILITY REPORT 2018 SUSTA INABI LI T Y
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Format
We have been publishing our sustainability
performance since 2008. Since 2016, we have
published our sustainability performance in a
combined annual and sustainability report to
provide a transparent account of our approach
to creating value in a financially, environmentally
and socially responsible manner for our
shareholders and other stakeholders.
You’ll find examples of sustainability in practice
embedded throughout the report to reflect how
sustainability is integrated into our operations.
Organisational boundary and scope
We disclose sustainability data in accordance
with Global Reporting Initiative (GRI) Standards.
The GRI Standards are a comprehensive set
of guidelines that cover all dimensions of
sustainability. Further information is available
on the GRI website. We also reference supporting
documents which form part of our sustainability
disclosure. These documents are publicly available
on our website to make specific information
more accessible.
The Sustainability section covers the performance
of our operations and facilities over which
OZ Minerals had operational control for the 2018
full calendar year. Joint ventures which we do not
operate are excluded. In mid-2018, OZ Minerals
acquired Avanco Resources Limited, a company
with assets including an operating mine, in Brazil.
The performance data of our Brazilian assets are
not included in this year’s Sustainability Report,
except where specifically noted, but we aim to
report on their sustainability performance in the
following year. Other sections within this report
can provide metrics and data (e.g. TRIFR) which
may include our Brazilian assets.
Assurance
OZ Minerals engaged KPMG to undertake
limited assurance over selected information in
this report. The full details of the process, scope
of the assurance engagement and the outcome
are detailed in KPMG’s assurance statement on
page 88.
Materiality
We use a materiality assessment to determine
key topics that matter most to our stakeholders
and us. We assess sustainability topics based on
two criteria: their importance to our business in
terms of growth, economic and social impact;
and their importance to stakeholders – including
employees, governments, shareholders, investors
and the community. High priority material
topics are discussed in this report and further
information on other sustainability topics is
available on the OZ Minerals website.
We complied with the GRI guidance on materiality
and completeness when identifying material
topics and referenced a range of internal and
external considerations and priorities. The process
included extensive document review, surveys, and
dialogue with internal and external stakeholders.
Materiality matrix
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Influence on economic, environmental and social performanceLowLowHighHighInfluence on stakeholder assessment and decisionsWater p. 67 Business Ethics p. 80Training and Education p. 80Economic Performance p. 74 Occupational Heath and Safety p. 71Indigenous Peoples p. 77 Employment p. 80Local Communities p. 74
Sustainability
strategy
Our sustainability aspiration
Our aim is to be a global copper-focused modern
mining company. We will deliver superior value
across multiple operating assets underpinned
by a diverse exploration and project pipeline.
We are committed to building our
business sustainably – operating
ethically, safely, minimising our
environmental footprint, ensuring
we are well-governed and are
socially responsible – core
elements of creating value for our
stakeholders, the heart of our
company strategy.
How we do things is as important as what we do.
Our culture and behaviours are framed by our
How We Work Together principles.
Delivery
We deliver on sustainability within OZ Minerals
by focussing on value creation for our stakeholders
and we report on our value creation achievements
under the sustainability elements of Community,
Environment, Safety and Health and Wellbeing.
OZ Minerals ensures these accountabilities are
met through our planning process and
governance structure.
Accountability
Assets are accountable for delivering the
sustainability elements. At a corporate level, we drive
and monitor our approach and outcomes through:
Strategy
Compliance
Annual review of strategy, setting
of the annual business plan, and
review and setting of policies and
standards.
Monitoring sustainability
performance at each asset via
Performance Standards and
Process Standards.
Risk register
Assets provide visibility of threats
and opportunities via the risk register.
Governance
Oversight for sustainability is provided within
the OZ Minerals governance framework.
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OZ Minerals’ strategy
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Five value creation pillars
Shareholders
We deliver consistent top quartile Total Shareholder Return. We meet
or exceed market expectations. We are ethical, well governed and
socially responsible.
Employees
Suppliers
Community
We have a safe work environment that empowers people to positively
impact the business. Our people enjoy coming to work. They are engaged,
valued and inspired to grow through exceptional leadership.
We preferentially partner with local and Indigenous suppliers. We seek
win-win relationships that deliver shared value, build capability and
enable us to innovate.
We add value to the communities where we operate, building
enduring partnerships aligned with their aspirations. They recognise
our contribution and advocate on our behalf.
Government
We operate in a socially responsible manner and create economic value.
We have bipartisan support for the ongoing development of our portfolio.
Sustainability action areas and reporting
Environment
Safety
Social
Health &
Wellbeing
ANNUAL AND SUSTAINABILITY REPORT 2018
External recognition,
voluntary commitment
and external benchmarking
Dow Jones Sustainability Indices
In September 2018, OZ Minerals was selected as
a member of the Dow Jones Sustainability Indices
(DJSI) for the second consecutive year. The DJSI
is one of the most highly regarded sustainability
performance rankings. It is released annually by
S&P Dow Jones Indices and RobecoSAM to drive
innovation in environmental, social and corporate
governance (ESG) investment. We are committed
to playing a leading role in corporate sustainability
within our industry and our community.
FTSE4Good
FTSE Russell confirms that OZ Minerals Ltd
has been independently assessed according
to the FTSE4Good criteria and has satisfied the
requirements to become a constituent of the
FTSE4Good Index. The FTSE4Good Index Series
is designed to measure the performance of
companies demonstrating strong environmental,
social and governance practices. The FTSE4Good
indices are used by a wide variety of market
participants to create and assess responsible
investment funds and other products.
Global Reporting Initiative
GRI is an international independent
organisation which has established the leading
international framework and standards for
sustainability reporting. OZ Minerals prepared
the Sustainability section of the 2018 Annual
and Sustainability Report in accordance with
the GRI Standards (Core).
Sustainable Development Goals
In January 2016, 193 UN member states
adopted 17 Sustainable Development Goals
(SDGs). These goals and their related targets
address the most important sustainability
challenges and can stimulate worldwide
transformational change. OZ Minerals recognises
that global megatrends, such as climate change,
globalisation, digitalisation and automation, will
impact our operations and our modernisation
agenda ensures we are responsive to threats and
opportunities in these and other areas.
OZ Minerals’ vision is to become a global copper-
core modern mining company. Creating value
for our key stakeholders is at the heart of our
strategy and shapes our global focus, products,
operations, and stakeholder engagement. We are
working towards ensuring we align our approach
to sustainability with the Sustainable Development
Goals. The SDGs broaden our view and provide a
framework for OZ Minerals to contribute towards
achieving these global goals and becoming a
global modern mining company.
Member of the International
Copper Association Australia
OZ Minerals is a member of the International
Copper Association Australia, the peak body
for the copper industry in Australia whose core
work is sustainable development. The benefits
of copper range widely; from renewable energy
and energy access to climate-change mitigation
and adaptation, many global trends driving the
sustainable-development agenda rely on copper
and its unique properties.
Sustainability at OZ Minerals
Sustainability is fully integrated into operating
asset accountabilities within OZ Minerals’
devolved operating model. Our Company’s
governance framework (p. 22) has been
established to achieve compliance with our
sustainability requirements and expectations.
The performance standards set the minimum
benchmarks and expectations for assets; the
process standards support the operation of
the business; the Company policies provide
the umbrella; and the annual business planning
process sets the priorities. These all support
OZ Minerals’ aspiration to be a modern mining
company that creates value for its stakeholders.
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ENVIRON MENT
OZ Minerals is committed to providing a high
standard of care for the natural environment.
SUP P ORT IN G DOCUM EN TS
Environmental governance
Sustainability Committee Charter,
Community and Environment Policy
ozminerals.com/about/corporate-governance
Management approach
Governance Framework, p. 22
Environmental Performance Standards
ozminerals.com/sustainability/environment
Sustainability framework
GRI Content Index
ozminerals.com/sustainability
Performance data
Environmental Data Tables, p. 82
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ANNUAL AND SUSTAINABILITY REPORT 2018 Water
Water is essential for our operations. Our
water management includes many facets of
environmental performance such as water use,
tailings, climate change and water recycling.
Prominent Hill and Carrapateena are situated
in areas with an average annual rainfall of less
than 200 millimetres per year and depend on
groundwater to sustain their operations. Our
wellfields are located on nearby pastoral stations
and, in the majority of cases, the pastoralists
draw water from a shallower or discrete aquifer.
Our water monitoring program involves
measuring and monitoring water levels and
quality in previously-agreed pastoral wells
on neighbouring stations. Additionally, we
closely monitor both the used and surrounding
groundwater sources and report these results to
the relevant stakeholders. We conduct sediment
monitoring to detect any potential changes in
downstream surface water quality from baseline
values, including metal concentrations and
acidity, to ensure our management measures are
effective.
Climate change, energy use and greenhouse gas emissions
The majority of OZ Minerals’ energy use occurs
at the Prominent Hill mine. The two main areas
of energy consumption are the processing plant
(electricity) and mining vehicles (diesel fuel).
Prominent Hill’s mining activities transitioned to
an underground-only mine during the year as the
open pit reached the end of its life. As a result,
there was a reduction in waste, fewer trucks
were operating and less diesel was consumed.
The Company’s energy demand will increase as
the Carrapateena mine is developed, particularly
once production begins (commissioning is
scheduled for the fourth quarter of 2019). Both
Prominent Hill and Carrapateena are connected
to the South Australian electricity grid which is
estimated to comprise approximately 40 per cent
renewable energy.
We have reported energy use and greenhouse
gas emissions in line with NGERS:
/ Overall Scope 1 emissions decreased by 19%
compared to the previous year.
/ Overall Scope 2 emissions decreased by 5%
compared to the previous year.
/ 253,238 tonnes of Scope 1 and Scope 2
carbon dioxide equivalent emissions were
generated in total, a 11% reduction compared
to the previous reporting year.
/ Diesel use is Prominent Hill’s primary source
of Scope 1 greenhouse gas emissions.
/ OZ Minerals did not sell energy in 2018.
Taskforce on Climate-related
Financial Disclosure
The Financial Stability Board formed the Task
Force on Climate-related Financial Disclosures
(TCFD). It is a market-driven initiative which
established recommendations for voluntary
financial reporting on climate change risks.
The Task Force released a recommendations
report which provides the general framework
for climate-related financial disclosures.
In 2019, we will be developing a roadmap to
integrate the TCFD recommendations into our
annual disclosure. The TCFD recommendations
provide a process to gain a better understanding
of physical and financial climate-related threats
and opportunities and reassess how climate
change risks are integrated into our company
standards and policies.
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Management approach
OZ Minerals Water Performance
Standard, OZ Minerals Tailings
Performance Standard,
OZ Minerals Waste and Waste
Water Performance Standard
ozminerals.com/sustainability/
environment
Performance data
Water Data Table, p. 82
Management approach
OZ Minerals Emissions and
Resource Efficiency Standard
ozminerals.com/sustainability/
environment
Annual reporting obligation
National Greenhouse and Energy
Reporting Scheme (NGERS)
voluntary disclosure
Task Force on Climate-related
Financial Disclosures
fsb-tcfd.org
Performance data
Energy and Greenhouse Gas
Data Table, p. 82
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SUSTAINABIL ITY IN PR ACTICE
SUSTAINABLE WATER USE FO R CA RR APAT E EN A
OZ Minerals appreciates the critical importance of sustainable
water management in the mining and resources sector. We have
a strong commitment to research and trials that develop greater
understanding of the role of water management, the opportunity
to influence policy development on water in mining and inform
the science and evidence base around water use and reuse.
In the development of the Carrapateena Mine, we have focused
on identifying and defining a sustainable water supply to meet
the forecast demands of the site. Throughout 2017 and 2018,
we conducted extensive water exploration drilling of the Northern
Wellfield region, which is currently being further explored, from
an advanced exploration viewpoint, to confirm the sustainable
pumping rates of the identified wells. The Carrapateena project
has been focused on utilising the underground mine water
inflows to enable the application of sustainable practises for
the Operation and to minimise impact on the wider region.
Air quality
The largest emission from the majority of our
assets is dust. This is generated by stockpiling
materials and vehicles moving over unsealed
surfaces. We use a range of control measures to
reduce the amount of dust we generate, including
regular road maintenance, active dust suppression
on roads and speed restrictions. Comprehensive
sampling at Prominent Hill and Carrapateena
has verified that our air quality management has
effectively prevented adverse impacts on workers,
the community and the environment. There
are no ozone-depleting substances, persistent
organic pollutants or stack emissions produced
at Prominent Hill or Carrapateena. Air quality is
also affected by sulphur and nitrogen oxides that
are generated by burning fuels. Gases like carbon
monoxide and oxides of nitrogen are generated
during blasting.
Management approach
OZ Minerals Air Emissions Standard
ozminerals.com/sustainability/
environment
Annual reporting obligation
National Pollutant Inventory (NPI)
Performance data
Air Quality Data Table, p. 82
Waste
Mining waste is managed on site at the integrated
waste rock landform (IWL) at Prominent Hill.
This comprises the tailings storage facility (TSF)
and two waste rock dumps. Over the reporting
period, Prominent Hill produced 1.4 million
tonnes of waste rock and 9.6 million tonnes of
tailings. No potential acid-forming (PAF) material
was mined. Most of the waste rock generated is
placed in the rock dumps, with a proportion of
non-acid forming (NAF) rock used to construct
mine infrastructure, such as the tailings storage
facility and roads. When PAF rock is encountered,
it is encapsulated in designated PAF cells within
the waste landform. These PAF cells are then
encapsulated within NAF rock using physical
control measures to prevent surface water runoff
and subsequent environmental impacts.
Our tailings performance standard sets out
our approach to managing waste within the
TSF. These standards are written to ensure the
TSF is designed, constructed and managed to:
prevent seepage rates to groundwater; ensure
that tailings are physically and chemically stable;
protect terrestrial and avian life; and comply with
regulatory and license requirements. The facility
is run under a TSF Operations Management Plan
which has been developed to comply with these
standards. As a part of our tailings management,
we conduct groundwater sampling to monitor
parameters such as depth to water, salinity, pH,
and metal concentrations at and surrounding the
TSF and open pit. An external audit of the tailings
dam at Prominent Hill is undertaken annually with
a major audit undertaken every five years.
Management approach
Waste and Wastewater Standard,
Waste Rock and Ore Standard,
and Tailings Standard
ozminerals.com/sustainability/
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Performance data
Waste Data Table, p. 82
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Land and Biodiversity Standard
ozminerals.com/sustainability/
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Performance data
Land and Biodiversity Table, p. 83
Management approach
Rehabilitation and Closure Standard
ozminerals.com/sustainability/
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Land and biodiversity
In the development of the Prominent Hill Project,
OZ Minerals committed to the establishment
and management of a Significant Environmental
Benefit (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. 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.
Flora and fauna monitoring of the SEB offset
area commenced in 2006 and in over 10 years
of continuous monitoring has identified the
presence of three threatened species, the
nationally threatened plains mouse and thick-
billed grasswren (eastern subspecies), both listed
as vulnerable under the Environment Protection
and Biodiversity Conservation Act (1999) and the
chestnut-breasted whiteface listed as rare under
the South Australian, National Parks and Wildlife
Act (SA) 1972. All three species are also listed
in the International Union for Conservation of
Nature’s (IUCN) Red List of Threatened Species.
The extensive monitoring program has allowed
the vegetation associations and preferred habitat
of the three species to be mapped. Currently,
annual vegetation monitoring is completed and
is aimed at ensuring the health of the preferred
habitat is maintained. Through management of
the SEB offset area, OZ Minerals aims to protect
and enhance habitat that is known to occur in
the SEB offset area.
At Carrapateena, three IUCN species are listed
within the area – two vulnerable species (the
Malleefowl and plains rat) and one endangered
species (the Pernatty knob-tailed gecko). The
plains rat is the only species within the local area
of proposed operations. Our monitoring continues
to indicate that mining activities will have minimal
impact on the surrounding natural environment.
Rehabilitation and closure
The South Australian operations within OZ
Minerals have documents and programs detailing
closure, including the Supporting Works Plan
and the Program for Environment Protection
and Rehabilitation (PEPR). The Supporting
Works Plan is reviewed annually to ensure closure
assumptions are in line with current operational
activities. The documents include rehabilitation
and closure completion criteria to achieve post-
mining designated land use and to minimise
environmental liability. Closure planning is
updated throughout the operational life of
a mine so that the risks and unknowns are
identified and reduced over time. As part of
this process estimated costs of rehabilitating,
decommissioning and restoring the areas
disturbed during the operation of the mine are
evaluated and provided for.
Progressive rehabilitation has been taking place
at Prominent Hill. Rock armouring of the North
Waste Rock Dump is now completed and the
South Waste Rock Dump is near completed with
the rock armouring of the TSF 75% completed.
Stakeholder engagement on mine closure occurs
throughout a mine’s life. The potential social
and environmental impacts of mine closure are
considered in our conversations with governments
and local communities. We support community
initiatives and sustainable local businesses as a
part of our community engagement program.
SUSTAINABILITY IN P RACTICE
SUSTAINABLE WAS TE MANAG EME N T
AT PRO MINENT HILL
Prominent Hill runs an extensive recycling program. This recycling
program diverts many varying waste streams from landfill resulting
in 50% of non-mining waste generated being either recycled or
reused. In late 2018 a trial of biobin technology was implemented
to further this philosophy. The biobins collect food waste generated
by the Camp kitchen facilities within a sealed bin unit. This waste
is then sent off site utilising courier backloads to Adelaide where
it is processed into compost and fertilisers. This process has the
additional benefit of providing the kitchen staff with a safer
environment and reduces potential food sources for feral species.
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SAFETY
OZ Minerals is committed to high standards and
leadership in the area of safety for our people
and the communities in which we operate.
SUP P ORT IN G DOCUM EN TS
Management approach
Health and Safety Policy
ozminerals.com/about/corporate-governance
Safety performance standards
Isolation, Fixed and Mobile Equipment,
Electrical Safety, Fall Prevention, Confined Spaces,
Ground Control, Explosives, Fire Prevention,
Aviation, Inundation
ozminerals.com/sustainability/safety
Performance data
Safety Data Table, p. 86
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ANNUAL AND SUSTAINABILITY REPORT 2018 Safety culture and leadership
We understand that mining activities can
impact people’s safety. As leaders, we actively
care for everybody involved in our operations
and supporting services. We’re committed to
identifying, evaluating and managing all the
associated threats for actual and potential
adverse impacts as far as reasonably practicable.
Our target is to achieve an injury and occupational
disease-free workplace by ensuring hazards
are identified and managed at the source. All
safety incidents are thoroughly investigated, we
share what we’ve learned, and we implement
corrective actions. Safety data is collected for the
entire workforce (employees, contractors, visitors
working on our sites) and weekly reports are
made to management, including the Managing
Director and Chief Executive Officer. Performance
is diligently monitored by our leadership team.
We conduct yearly internal audits against select
company processes and standards, and external
assurance as part of the annual Sustainability
Report assurance process.
The number of recordable workplace injuries in
many of our departments has been reduced due
to active engagement from our senior leadership
and activities focused on identifying and
eliminating the causes of incidents. Significant
incidents and incident trends are comprehensively
reviewed by the Board’s Sustainability Committee
to ensure that: we learn from incidents; our
approved processes are complied with; and we
implement additional controls where necessary.
Safety statistics are calculated per one million
working hours. In 2018, the total recordable injury
frequency rate (TRIFR) per million hours worked
increased from 6.39 in 2017 to 7.24 in 2018.
The TRIFR is exclusive of Brazil.
Our lead indicators are monitored to reduce
workplace hazards and injuries. Incidents are
internally rated against potential or actual
consequence and likelihood and assessed for their
impact on safety, health, environment, community
and financial metrics. This helps us to identify
significant incidents that warrant in-depth review
and analysis. All significant safety incidents are
thoroughly investigated using the incident–cause–
analysis method.
Significant incidents are those deemed to have:
/ high potential or actual serious consequences,
or recordable incidences and disabling injury.
We will roll out our process standards across
all assets in 2019. The Risk Management
Standard, and its supporting guidelines, is a
critical document across the simplified process
standards and its consequence table supports
the Incident Reporting and Investigation
Process Standard. The Incident Reporting and
Investigation Process Standard sets out the
process for identifying, elevating and reporting
incidents, including safety-related incidents.
Safety programs
Effective safety management means that we:
/ provide a safe working environment with
supportive processes and systems
/ empower our workforce to raise safety issues
before there is potential for an incident
/ thoroughly investigate incidents when
they occur
/
implement controls to reduce the likelihood
of recurring incidents using sound risk
management practices.
We have a number of initiatives in place to
mature our safety culture. Our focus is on
developing leadership to play an important part
in our safety culture through demonstrating and
promoting safety leadership in the workplace. All
our employees and the employees of our contract
partners are empowered to cease operations if
necessary, to ensure the safety of the workforce.
We are committed to preventing work-related
injuries and illnesses. Our key safety programs
such as the critical risk assurance program are
underpinned by internal auditing of compliance
against our safety performance standards
and identifying opportunities for continuous
improvement.
Management approach
Fitness for Work Performance
Standard, Medical Programs
Performance Standard
ozminerals.com/sustainability
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Contractor management
Our projects are delivered in partnership with
contractors and suppliers and we rely in part on
their capabilities to carry out our operations. Our
management system defines the requirements
and practices for working with contractors and
suppliers. Major contractors sign agreements
with requirements consistent with our Code of
Conduct, policies and standards. They must share
our values and exhibit behaviour that ensures the
safety of the workforce.
All contractors are subject to a pre-qualification
process and are comprehensively evaluated
against criteria including safety, health,
environment and community aspects as well risk
management, internal auditing processes and
employee management.
Minimum performance criteria (safety and
environment) and performance criteria (including
operating performance and site management)
are developed and applied to our contracts.
Training and emergency preparedness
We continuously explore and adopt methods
to ensure we grow the capability of leaders
and employees. Our crisis management plan
outlines the roles, responsibilities and processes
that our corporate crisis management team
would follow in the event of a crisis. The team
includes representatives from operations, legal,
commercial, safety, environment, community,
media and government relations. We define a
crisis as an event that seriously threatens people,
operations, assets, the environment or our
long-term prospects and reputation. Our assets
have specific emergency management plans that
outline the response to be initiated in the event
of an onsite emergency. We conduct scenario
training with the operating assets’ management
teams and the corporate crisis management
team. We hold regular emergency exercises,
both desktop and practical, to test the drills and
exercises of our emergency preparedness.
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ANNUAL AND SUSTAINABILITY REPORT 2018 SOCIAL
PER FO RMANCE
OZ Minerals is committed to building and maintaining
strong supportive relationships and partnerships with
local people in the areas where we operate, as it drives
value creation for both the business and communities.
SUP PO RTING DOCUM ENT S
Sustainability governance
Sustainability Committee Charter,
Environment and Community Policy,
Ethics and Human Rights Policy
ozminerals.com/about/corporate-governance
Management approach
Risk Management (p. 37) and
Social Performance Standards
ozminerals.com/sustainability/social
Sustainability guidelines
GRI Content Index
ozminerals.com/sustainability
Performance data
Social Performance Data Tables p. 83
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Management approach
Stakeholder Engagement
Performance Standard
ozminerals.com/sustainability/social
Stakeholder engagement
We seek to build and maintain strong, supportive
relationships with the host and local communities
where we operate. Our assets have community
engagement programs that include engagement
with regulatory bodies, government agencies,
communities, land owners, land connected
Indigenous peoples and local landowners within
the sphere of influence of the operations and
project activities. This ensures input from the
local community and government and provides
the opportunity for us to understand the
environmental, social and economic implications
of our projects.
We also engage with key special interest groups
and stakeholders who may potentially be affected
by the asset’s activities to better understand the
risks and social impacts. We provide accurate
and relevant information in a timely manner and
anticipate and proactively address community and
stakeholder issues and concerns when consulting
with them.
Mechanisms are in place to capture complaints
and grievances and ensure they are promptly
addressed. Our assets also monitor and review
major communication and consultation activities
to assess their effectiveness and promote internal
and external stakeholder feedback.
All students in Australia, regardless of where
they live, should be encouraged to pursue their
educational goals. However, university research
studies (National Centre for Student Equity in
Higher Education) have indicated that a child
born or living in remote Australia is only one
third as likely to pursue higher education as
a child born or living in a major city. Remote
students often have unique knowledge,
capabilities and perspectives that are a valuable
part of a wider Australian culture. In recognition
of this, Prominent Hill partnered with the Coober
Pedy Area School in 2018 to work together in an
effective and productive partnership in a program
of activity called Aspirations and Pathways Project
4 Youth (APP4Y).
The objectives of this program are to:
/ assist in work experience through school
incursion and excursion programs
/ assist in student aspirations by creating credible
pathways for success
/ support education and development
opportunities in the Science, Technology,
Engineering and Math (STEM) areas.
Economic performance and socioeconomic contributions
Operating a sustainable and economically
successful company allows us to create
economic value for our stakeholders.
We make significant contributions to local,
regional and national economies directly
through the payment of taxes and royalties to
governments, income taxes, social investment,
dividends as well as payments to our workforce
and suppliers. In 2018 we:
/ paid more than $59.8 million in wages
and benefits
/ paid $67.6 million in dividends to shareholders
/ contributed $56.3 million in Government
royalties.
Activities at Prominent Hill and Carrapateena
significantly contributed to local and regional
economies, by $253.4 million in total.
Operationally, significant value is generated
through employment with our contracting
partners and us, and investments in community
development initiatives and programs. The direct
benefits of our investments include improved
infrastructure, health, safety awareness, education
and training, and local business development.
More details are available in the financial section
of this report (p. 97) and in the socioeconomic
performance tables of this section of the report
(p. 83).
Performance data
Socioeconomic Data Table, p. 83
Community investment and sponsorship
We have contributed to a broad range of local
and regional programs. In addition to funding,
our employees and contract partners provided
in-kind assistance by donating time, expertise and
resources for community events and initiatives.
We supported locally-organised initiatives
that provide long-term benefits to our
host communities and are aligned with the
community’s wishes. Our sponsorships and
community investment initiatives strive to
support organisations or projects to achieve
sustainable outcomes. We contributed
$0.2 million in sponsorship to local
organisations and programs in 2018.
Sponsorship
OZ Minerals Sponsorship Guidelines
ozminerals.com/sustainability
Performance data
Community Investment Data Table,
p. 83
7 4
ANNUAL AND SUSTAINABILITY REPORT 2018 Tax transparency
The Board of Taxation’s voluntary Tax Transparency
Code (TTC) was endorsed by the Australian
Government in 2016 and is designed to
encourage greater transparency within the
corporate sector of its compliance with Australian
tax laws. OZ Minerals supports the initiative to
ensure Australian businesses and subsidiaries of
multinational companies operating in Australia
pay tax on their Australian profits, as required
under Australian tax legislation.
leading to adverse reputational consequence,
compliance with regulatory requirements and
maximising shareholder value. OZ Minerals
seeks to adopt a low tax risk position to ensure
potential impacts to the Group are maintained
at insignificant levels for tax exposures across its
global business. Whilst OZ Minerals is entitled to
certain tax concessions in the ordinary course of
its business, it has no appetite to seek concessions
that are motivated by the avoidance of tax.
OZ Minerals formally registered with the Board of
Taxation’s TTC in 2018 and present the following
information in accordance with the TTC below:
Tax governance
OZ Minerals’ objectives of tax risk management
are the prevention of disputes with tax authorities
Australian tax-related contribution
summary
A summary of OZ Minerals’ 2018 staff and tax
related contributions, to State and Federal tax
authorities, is provided in the performance data
tables on page 85.
External documents
Board of Taxation’s Tax
Transparency Code (TTC)
taxboard.gov.au
Performance data
Tax data table, p. 85
Management approach
Local Enterprise
Performance Standard
ozminerals.com/about/corporate-
governance
Performance data
Procurement Data Table, p. 83
Local procurement
We seek to create sustainable benefits for the
regions around our assets and source local
employees and suppliers where possible. We
preferentially purchase goods and services locally,
within the region or within the state where we
operate. National or international procurement
is only considered when local procurement is
not available or competitive. We also help local
businesses to understand our pre-qualification
processes and procurement standards. Local
and Indigenous land connected peoples are
encouraged to apply for positions and tender
for business opportunities with our assets.
Our activities contributed $253 million to
South Australian regional and local suppliers
and contractors. These figures do not include
wages and salaries paid to major contractors or
expenditure by contractors in the local region.
Our greatest supply impact is through contracting
mining and other services. The 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.
Total spend on suppliers by region
The Antakirinja Matu-Yankunytjatjara Aboriginal
Corporation AMYAC is the organisation of
native title holders for the area encompassing
a significant portion of the Far North of
South Australia, including Coober Pedy and
Prominent Hill. In 2015 OZ Minerals and AMYAC
established A.M.Y Environmental Services Pty
Ltd. (AMYES) a 100% AMYAC owned business
at Prominent Hill. The result of the partnership
was the establishment of an innovative and
unique partnership with AMYAC, creating the
organisation AMYES which laid the foundation
for AMYAC to develop a waste management
business, winning a successful tender to provide
integrated Waste Management Services to
Prominent Hill and to leverage long term business
opportunities beyond the life of the Prominent
Hill mine and outside of the resource industry
and has illustrated the first step toward real social
change for the traditional owner group. Since
September 2015 AMYES has demonstrated a
commitment to continuous improvement across
all aspects of the business. This continuous
improvement philosophy extends to the
partnership model currently in place with
OZ Minerals with the contract being renewed
for another two years in 2018.
Total
$1 billion
Australia
$940 million
South
Australia
$253 million
International 7%
Australia 93%
National 73%
South Australia 27%
Regional 16%
Local 84%
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C ASE STUDY
CARRAPATEENA L OCAL C ONTENT PART N ER IN G –
GLOBAL MAINTENANCE UPP ER S PEN C ER G ULF
At the Carrapateena project, OZ Minerals has partnered with a local business organisation,
Global Maintenance Upper Spencer Gulf (GMUSG), to drive local content activities and facilitate
connecting local businesses to the Carrapateena project supply chain.
The outputs of this process resulted in significant and measurable level of local content, measured
as total firms involved and revenue generated. The local content model is transferrable to other
OZ Minerals projects and operations.
OZ Minerals has been active in the community, holding a number of events to connect with local
suppliers, including presentations at key regional conferences, facilitated lead contractor tours of
the region, providing contractors with clear understanding of region capability.
The 2018 Premier’s Awards in Energy and Mining recognise excellence demonstrated by leading
resources and energy sector companies and organisations in the areas of diversity, working with
communities, and innovation. OZ Minerals and Global Maintenance Upper Spencer Gulf won for
the Carrapateena project the resources sector award “Excellence in Working With Communities”.
7 6
ANNUAL AND SUSTAINABILITY REPORT 2018 Land-connected Indigenous peoples and cultural heritage
A genuine partnership with land-connected
Aboriginal and Torres Strait Islander peoples 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 host communities is required to ensure
respectful, inclusive and effective engagement.
Each asset has dedicated personnel to ensure
regular liaison with Indigenous communities.
The requirements regarding engagement with
Indigenous communities are set out in the Land-
Connected Indigenous Peoples Performance
Standard. In line with the Standard, each asset
must operate in accordance with the principles
of the UN Declaration of the Rights of Indigenous
Peoples (UNDRIP). Our partnering approach
with Indigenous peoples is based on principles
of equality, transparency and mutual benefit.
It respects and protects the rights of Indigenous
peoples and is in line with the values of Free
Prior and Informed Consent (FPIC).
We provide cultural heritage and awareness
training and information on how to avoid damage
to cultural heritage, along with project obligations
and requirements. Cross-cultural awareness
training programs are offered to all contractors
and employees and they are encouraged to
attend. The training includes raising awareness on
heritage and artefact finds and working in areas
of cultural significance.
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Management approach
Land-connected Indigenous Peoples
Performance Standard, Cultural
Heritage Performance Standard
ozminerals.com/about/corporate-
governance
Human rights
Our 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 the International Council
on Mining and Metals (ICMM) principles. We
further reinforce our expectations of employees
through our Code of Conduct. We have a variety
of programs to promote a culture of compliance
and ethical business. Asset induction training
raises awareness of human rights responsibilities
with senior management, employees, contractors
(particularly security forces and human resources),
and other stakeholders in the asset’s sphere of
influence. From time to time, we also provide
our employees with training on topics covered
within the human rights standards. Maintaining
and improving our systems and processes helps to
ensure there are no human rights violations in our
operations or in our supply chain.
Management approach
Ethics and Human Rights
Policy and the Human Rights
Performance Standard
ozminerals.com/about/corporate-
governance
Anti-bribery and corruption
We carried out an internal audit of OZ Minerals’
Anti-Bribery and Corruption Standard together
with its processes and procedures. The internal
audit involved a risk assessment, gap analysis,
review of the anti-bribery and corruption
compliance materials, and company integration
of the compliance program, including within
the newly acquired Brazilian assets. The primary
purpose of the internal audit was to identify
the bribery and corruption compliance risks
OZ Minerals faces, how those risks are currently
managed and what improvements could be made
to the governance and compliance framework.
7 7
SUSTAINABILITY IN P RACTICE
LONG T ERM PARTNER ING FOR N AT IvE vEGETATIO N
In 2018, OZ Minerals joined in a formal agreement with not-for-profit
environmental organisation Nature Foundation in South Australia
for significant environmental benefit. This innovative ten-year
arrangement provides shared value for OZ Minerals and Nature
Foundation. The partnership is forward looking and ensures a robust,
long-term focus on environment protection and restoration, while
also providing a platform for others to join us and contribute to native
vegetation management. We have built a partnership model that
creates value beyond the two organisations involved.
The long-term nature of the agreement allows OZ Minerals to meet
our obligations to offset clearance of native vegetation – initially in
relation to the Carrapateena Construction, Carrapateena Northern
Wellfield and the Prominent Hill electricity transmission line, but with
scope to add additional projects. Nature Foundation SA will ensure
the protection and restoration of South Australia’s natural biodiversity
with the certainty the long-term partnership and commitment that
OZ Minerals provides.
SUSTAINABIL ITY IN PR ACTICE
WEST MUSGRAvE COLLABORATIvE
INFRAST RUCTURE D ESIGN
Collaboration and knowledge sharing are critical to preventing
and managing potential conflict whilst promoting opportunities
for shared value. In 2018, the West Musgrave team worked with
the Ngaanatjatjara Traditional Owners to undertake extensive
cultural heritage survey assessments. The purpose of the cultural
heritage survey works was to use local and traditional knowledges
of the country to inform the design of the West Musgrave project
footprint, including but not limited to the mining and non-processing
infrastructure. By undertaking cultural heritage surveys prior to any
early engineering or design works, the West Musgrave project has
been able to incorporate the Traditional Owners’ cultural knowledge
in order to respect and protect cultural heritage whilst providing the
project with greater optionality and confidence on the options and
opportunities around infrastructure development.
7 8
ANNUAL AND SUSTAINABILITY REPORT 2018 HEALTH &
WELLBEIN G
OZ Minerals is committed to high standards of health
and wellbeing among its people and is focused on
leadership, a supportive workplace culture, building
capabilities, implementing prevention controls and
promoting the return to work of affected individuals.
SUP PO RTING DOCUM ENT S
Management approach
Health and Safety Policy
ozminerals.com/about/corporate-governance
Health and wellbeing standards
Medical Programs, Occupational Exposure
Control, Fitness for Work, Lone Workers and
Remote Travel, Hazardous Materials
ozminerals.com/sustainability
7 9
Health and wellbeing programs
We have implemented a series of programs
that promote, maintain and enhance a healthy
lifestyle, in view of the impact of physical, mental,
emotional and social health on overall employee
wellbeing. Our fitness-for-work program includes
a wide range of activities and education in fatigue
management, employee assistance programs,
role-based assessments, ergonomic assessments,
fitness, and drug and alcohol programs. We
intend to provide employees with the necessary
education and information to self-manage their
fitness-for-work. We have a fit-for-work alcohol
and drug policy at all of our assets.
Mental health is an important health risk that
continues to be a concern across the mining
industry. We offer an employee assistance
program (EAP) with free, professional and
confidential counselling to all employees,
contractors, and their immediate family members.
The EAP is provided through a leading global
health and wellness company and helps to
address work or personal issues through a
network of accredited counsellors. We have
trained our first groups of mental-health first-
aiders at Prominent Hill and Carrapateena, and
plans are in place to increase the number of
trained personnel across our assets.
We offer an array of benefits to our employees
including 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.
Business ethics and ethical conduct training
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 to report unacceptable conduct
confidentially and anonymously under the
Whistleblower Policy. 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.
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. Our employees
enrol in online learning courses that include our
equal employment opportunity program and
ethics and conduct program, as well as an anti-
harassment and bullying program. Each program
includes awareness training based on site-specific
needs. A new OZ Minerals online interactive
induction program was launched during the year
which further reinforces our Code of Conduct,
policies and performance standards.
Training and education
We offer a wide range of development
opportunities, including formal programs,
technical and compliance training, online
learning and mentoring. This year our workforce
undertook 27,767 hours of employee training,
mostly at Prominent Hill and also at the
Carrapateena project which is developing an
operational workforce ahead of commissioning
scheduled for Quarter 4 2019 where the majority
of our employees are based.
Our modern mining culture underpins our
approach to education and training with our
How We Work Together Principles providing the
foundation of how we conduct our activities.
Leadership training is designed to build a more
collaborative and innovative workplace supported
by a flexible working environment.
Specific training across the company spans
inductions, safety, business ethics, specific
role and development related education, and
education and training designed to lift the
capability of the workforce including leadership
development.
Management approach
Fitness for Work Performance
Standard, Medical Programs
Performance Standard
ozminerals.com/about/corporate-
governance
Performance data
Employment Data Table, p. 86
8 0
ANNUAL AND SUSTAINABILITY REPORT 2018 Diversity and inclusion
Women comprise 22 per cent of the workforce
directly employed by OZ Minerals. Some individual
contributors and functional leadership areas have
more than 25 per cent female representation.
We offer competitive remuneration for our
employees that reflects the job type, years of
experience, and the length of time employees
have held their position. We review the earnings
annually by gender and job band level to make
sure that employee remuneration remains
equitable and in line with market trends.
All employees are entitled to parental leave. In
2018, nine women and men took parental leave
and nine returned to work after their parental
leave had ended. A retention rate of 75 per cent
was maintained after 12 months.
Twenty five per cent of our total workforce is
covered by collective bargaining agreements.
We value diversity in our workforce as it helps
us to innovate and do things differently. We
seek to create an inclusive work environment
that encourages diversity, which in turn provides
us with a strategic advantage that stems from
applying a variety of capabilities, ideas and
insights into problem solving and decision making.
Management approach
Diversity and Inclusion Policy
ozminerals.com/about/corporate-
governance
Performance data
Diversity Data Table, p. 86
SUSTAINABILITY IN PR ACTICE
PEOPLE AND PER FOR MAN CE IN A MOD ER N M IN IN G CO M PAN Y
OZ Minerals’ move to the Adelaide Airport business district in mid-2018 reflects our aspiration
to be a modern mining company. A purpose-built, open-plan layout facilitates our flexible and
activity-based working requirements, breaks down hierarchy, and promotes collaboration and
innovation – key cultural aspirations supporting our modern mining company vision.
Our new work environment is underpinned by our How We Work Together principles and
enables more opportunities to connect with site-based employees. It also facilitates the right
frame of mind for us to generate (and keep generating) imaginative solutions to enable our
growth strategy. A modern facility supported by a modern mindset and work approach.
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Sustainability performance data
Figures exclude Brazil operations as they were acquired part way during the year and will be reflected in subsequent year reports.
Environment
Energy
Energy consumption (GJ)
Energy consumed
Energy produced
Energy consumed (net)
Prominent Hill
Carrapateena
Group office
Total
Emissions
2,268,153
228,804
1,162
2,498,119
783
25,605
0
26,388
2,267,370
203,199
1,162
2,471,731
Total direct and indirect emissions
2017-2018
2016-2017
2015-2016
2014-2015
Greenhouse gas emissions Scope 1 (t CO2-e)(a)
Greenhouse gas emissions Scope 2 (t CO2-e)(b)
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)
85,258
167,980
253,238
115
288
11
632
0.45
35
2,180
105,648
177,306
282,954
146
342
11
342
1.30
108
3,310
142,669
190,825
333,494
198
446
11
994
0.85
52
4,488
180,290
199,209
379,499
267
567
11
1,242
1.11
86
5,899
Note: The reporting period is July 2017 to June 2018. 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.
(a) 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.
(b) Scope 2 refers to indirect emissions resulting from the import of electricity from external parties; commonly the electricity grid.
Water withdrawal
Water withdrawal
Surface (ML) water
Surface
water
Groundwater
(mine dewatering)
Groundwater
(wellfield)
Rainwater
Municipal
water supply
Total
recycled
% Total
recycled
Prominent Hill
Carrapateena
Total
Water discharge
0
0
0
523
198
721
5,337
436
5,773
0
0
0
0
2
2
283
0
283
5%
0%
5%
Water discharge (ML)
Subsurface
Surface
Sewers
Land (dust suppression)
Land
Treatment facilities
Groundwater
Prominent Hill
Carrapateena
Total
Waste
Mineral waste
Prominent Hill
Carrapateena
Total
0
0
0
0
0
0
0
0
0
496
147
643
0
28
28
331
3
334
0
8
8
Overburden &
waste rock (t)
1,443,016
601,688
2,044,704
Material moved (t)
Total ore mined (t)
Liquid fossil fuels (kL)*
Lubricants (kL)*
Explosives (t)*
6,575,586
1,257,526
7,833,112
5,132,570
0
5,132,570
26,111
4,947
31,058
578
71
649
3,671
368
4,039
*The reporting period for liquid fossil fuels, lubricants and explosives is July 2017 to June 2018 and reported as part of the National Pollutant Inventory.
8 2
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Non-mineral waste
Non-mineral waste
Solid recycled (t)
Liquid recycled (l)
Landfill (t)
Incineration (t) On-site storage (t) Hazardous transported (t)
Prominent Hill
Carrapateena
Total
74,325
76
74,401
58,701
0
58,701
827
757
1,584
168
0
168
0
0
0
34
43
77
Rehabilitation and closure
Land management (ha)
Total landholding
Mine footprint
Land disturbed
Land rehabilitated
Prominent Hill
Carrapateena
Total
Environmental compliance
11,401
43,873
55,274
2,039
430
2,469
1.3
275
276
0
1
1
Total volume of significant spills
700 kL saline water, 3 kL diesel
Monetary value of significant fines ($A)
$0
Social*
Socioeconomic contribution
$millions
Revenues
Operations
Employees
Payments to
providers of capital
Payments to
government
Revenue, other
income and
financing income(b)
Operating
expenses
Employee
benefit
expenses(b)
Dividend
payments to
shareholders
Providers
of funds
Income
taxes
expense(b)
Royalties(b)
Community
investment
Community
investments(c)
Economic
value
retained
1,081.3
50.5
1,131.8
(495.5)
(46.2)
(541.7)
(58.3)
(1.5)
(59.8)
(67.6)
–
(67.6)
(4.2)
(0.9)
(5.1)
(95.2)
4.7
(90.5)
(52.5)
(3.8)
(56.3)
(0.2)
–
(0.2)
307.8
2.8
310.6
Overview revenues
Overview community investment
$millions
Categories
$millions
1,117.0
Community appeal
2.8
Education
12.0
Health
1,131.8
Industry(c)
Total
Overview operating expenses
Categories
$millions
Changes in inventories
(83.7)
Region
Procurement
Raw materials
(283.5)
South Australia - local
Exploration and evaluation
(67.2)
South Australia - regional
Freight expenses
Net foreign exchange
Other expenses
Total
(72.9)
National
7.2
International
(41.6)
Total
(541.7)
* Includes information for Brazil for the second half of 2018 only.
(0.08)
(0.02)
(0.08)
(0.02)
(0.2)
$millions
(212.7)
(40.7)
(687.2)
(71.9)
(1,012.4)
(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: Brazil. The entities located
outside Australia are not defined as
operating segments of OZ Minerals
(b) As disclosed in the income statement
of the OZ Minerals audited financial
statements for the year ended
31 December 2018.
(c) 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.
8 3
Region
South Australia(a)
Brazil
Total OZ Minerals
Categories
Revenue
Other income
Financing income
Total
Stakeholder engagement
Stakeholder group
About the stakeholder
Engagement
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.
Investment
community
Customers
Employees
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.
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.
Suppliers
From local businesses to large international organisations.
Regular meetings with commercial and operational staff.
Industry associations Mining and minerals industry.
Representatives on boards and committees, engagement on specific projects.
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.
Local communities
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.
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.
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.
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.
8 4
ANNUAL AND SUSTAINABILITY REPORT 2018 Tax
Australian tax-related contribution summary
$millions
Reconciliation to income tax payable*
Corporate income tax*
Government royalties
State payroll taxes and other
Total
Employee PAYG
146.3
52.5
3.7
202.5
20.8
Profit before income tax expense
Permanent differences
Temporary differences
– Difference in accounting and tax depreciation
*Corporate Income Tax represents cash outflows in 2018 in relation to the following:
/ Income tax payment for December 2017 totalling $82.9 million
/ Monthly PAYG instalments paid during the 2018 income year totalling $63.4 milllion
Reconciliation of accounting profit to income tax expense
$millions
Profit before income tax expense
Tax at Australian tax rate of 30%
Non deductible expenditure
Variation in overseas tax
Revision for prior periods
Recognition of previously unrecognised tax losses
Derecognition of overseas losses
Income tax expense
312.9
(93.9)
(1.4)
1.8
(0.2)
7.4
(4.2)
(90.5)
Global & Australian
effective tax rate
Global
($millions)
Australia
($millions)
Accounting (loss)/profit before
income tax expense
Income tax expense
Effective tax rate
312.9
(90.5)
28.9%
321.0
(89.5)
27.9%
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
R
E
P
O
R
T
31 December 2018
($millions)
321.0
26.9
(55.6)
(1.2)
(28.4)
(56.4)
(20.6)
185.7
(22.1)
163.6
49.1
(51.9)
(2.8)
– Provisions and accruals
– Derivatives
– Exploration deductions
– Other
Taxable income before utilisation of carried forward
restricted tax losses
Utilisation of carried forward restricted tax losses
Taxable income after utilisation of carried forward losses
Australian income tax payable
PAYG instalments for December 2018
Net income tax payable post PAYG installments
* Figures exclude Brazil operations as they were acquired part way during the year and will be
reflected in subsequent year reports.
International related party dealings
In addition to the above disclosures, the Tax Transparency Code (TTC) also requires
disclosure of international related party dealings. For the year ended 31 December
2018, OZ Minerals had dealings with international related parties in Brazil relating
to financial and technical services. The dealings had no material impact on the
business’s Australian taxable income for the purposes of the TTC disclosures.
8 5
Health and wellbeing
Diversity
Profile 2018
Full time
Part time
Fixed term
Casual
Employees
Contractors
Workforce
Australia
M
262
F
65
M
1
F
6
M
26
F
9
M
4
F
2
Total
375
M
F
Total
2025
239
2,264
New employees 2018
Age group <36
Age group 36–55
Age group >55
Australia
Turnover 2018
Australia
M
24
M
6%
F
11
M
41
F
16
M
3
Age group <36
Age group 36–55
Age group >55
F
15%
M
11%
F
16%
M
29%
F
0
F
17%
Total
2,639
Total
95
Total
12%
Employee diversity at OZ Minerals
Under 30 years old
30–50 years old
Over 50 years old
Female
Indigenous
Business leadership and
Functional Leadership
Department Managers
Superintendents/
Senior Specialists
Tertiary/Supervisor
Individual contributors
Safety
Safety performance
Employee fatalities
Contractor fatalities
TRIFR (employees and contractors)
LTIFR (employees and contractors)
Significant safety incidents(a)
(a) As defined by OZ Minerals internal classification.
8 6
2018
2017
0
0
7.24
0.93
63
0
0
6.39
0.36
65
2016
0
0
6.80
1.07
71
2015
0
0
5.30
0.90
61
60%70%80%90%40%50%30%10%0%20%ANNUAL AND SUSTAINABILITY REPORT 2018
8 7
Independent Limited Assurance
Report to the Directors of OZ Minerals Ltd
Information Subject to Assurance
The Selected Sustainability Information, as presented in the OZ Minerals Ltd (the “Company”)
Annual Report 2018 and available on OZ Minerals Ltd’s website, comprised the following:
Selected Sustainability Information
Value assured
Fatalities
Total Recordable Injury Frequency Rate (TRIFR)
Lost Time Injury Frequency Rate (LTIFR)
0
7.24
0.93
Greenhouse gas emissions Scope 1 (t C02-e) July 2017 – June 2018
85,258
Greenhouse gas emissions Scope 2 (t C02-e) July 2017 – June 2018
167,980
Energy consumed (GJ)
Energy produced (GJ)
2,498,119
26,388
Conclusion
Based on the evidence we
obtained from the procedures
performed, we are not aware
of any material misstatements
in the Selected Sustainability
Information, which has been
prepared by OZ Minerals
Limited in accordance with GRI
Standards for the year ended
31 December 2018.
Criteria Used as the Basis of Reporting
The criteria used in relation to the Annual Report content are the GRI Standards published by the
Global Reporting Initiative (GRI) and Company specific definitions.
Basis for Conclusion
We conducted our work in accordance with Australian Standard on Assurance Engagements ASAE
3000 and ASAE3410 (the Standards). In accordance with the Standards we have:
/ used our professional judgement to plan and perform the engagement to obtain limited assurance
that we are not aware of any material misstatements in the Selected Sustainability Information,
whether due to fraud or error;
/ considered relevant internal controls when designing our assurance procedures, however we do
not express a conclusion on their effectiveness; and
/ ensured that the engagement team possess the appropriate knowledge, skills and professional
competencies.
Summary of Procedures Performed
Our limited assurance conclusion is based on the evidence obtained from performing the following
procedures:
/ enquiries with relevant OZ Minerals Ltd personnel to understand the internal controls, governance
structure and reporting process of the Selected Sustainability Information;
/ reviews of relevant documentation;
/ analytical procedures over the Selected Sustainability Information;
/ site visits to Corporate Head Office (Adelaide) and Carrapateena mine site;
/ walkthroughs of the Selected Sustainability Information to source documentation;
/ agreeing the Selected Sustainability Information included in the Annual Report to relevant
underlying sources on a sample basis;
/ an assessment that the indicators reported were in accordance with the GRI Standards; and
/ reviewing the sustainability section of the Annual Report in its entirety to ensure it is consistent
with our overall knowledge of the Company.
© 2019 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. All rights reserved. The KPMG name and logo are registered
trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
8 8
ANNUAL AND SUSTAINABILITY REPORT 2018 S
U
S
T
A
I
N
A
B
I
L
I
T
Y
R
E
P
O
R
T
How the Standard Defines Limited Assurance and Material Misstatement
The procedures performed in a limited assurance engagement vary in nature and timing from, and
are less in extent than for a reasonable assurance engagement. Consequently the level of assurance
obtained in a limited assurance engagement is substantially lower than the assurance that would have
been obtained had a reasonable assurance engagement been performed.
Misstatements, including omissions, are considered material if, individually or in the aggregate, they
could reasonably be expected to influence relevant decisions of the Directors of OZ Minerals Ltd.
Use of this Assurance Report
This report has been prepared for the Directors of OZ Minerals Ltd for the purpose of providing an
assurance conclusion on the Selected Sustainability Information and may not be suitable for another
purpose. We disclaim any assumption of responsibility for any reliance on this report, to any person
other than the Directors of OZ Minerals Ltd, or for any other purpose than that for which it was prepared.
Management’s responsibility
Management are responsible for:
/ determining that the criteria is appropriate to meet the needs of intended users, being OZ Minerals
Ltd and their stakeholders;
/ preparing and presenting the information subject to assurance in accordance with the criteria.
This includes disclosing the criteria, including any significant inherent limitations;
/ establishing internal controls that enable the preparation and presentation of the information subject
to assurance that is free from material misstatement, whether due to fraud or error;
/ advising us of any known and/or contentious issues relating to the information subject to assurance;
and
/ maintaining integrity of the website.
Our Responsibility
Our responsibility is to perform a limited assurance engagement in relation to the Selected Sustainability
Information for the year ended 31 December 2018, and to issue an assurance report that includes our
conclusion.
Our Independence and Quality Control
We have complied with our independence and other relevant ethical requirements of the Code of Ethics
for Professional Accountants issued by the Australian Professional and Ethical Standards Board, and
complied with the applicable requirements of Australian Standard on Quality Control 1 to maintain a
comprehensive system of quality control.
KPMG
Melbourne
27 February 2019
© 2019 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. All rights reserved. The KPMG name and logo are registered
trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
8 9
MINERAL
RESOU RCES AND
ORE RESERVES
Mineral Resources
and Ore Reserves
OZ Minerals’ updated Minerals Resource and Ore Reserve estimates are released as of 30 June each
year, or as necessitated by material changes to projects. Several additions were made to OZ Minerals’
portfolio throughout 2018, with the reporting of the initial Fremantle Doctor Mineral Resource estimate
in the Carrapateena province.
The joint venture with Cassini Resources reached another milestone with OZ Minerals earning 51%
ownership of the project, introducing the Nebo-Babel and Succoth Mineral Resources in the West
Musgraves province into the group reporting for the first time.
Several Mineral Resource and Ore Reserve estimates were received as part of the Avanco Resources
acquisition in mid-2018. However, these have not been restated in the Annual Report as they are
currently under review as part of the integration process.
OZ Minerals’ Group Mineral Resource is estimated at 4.8 million tonnes of copper and 8.9 million
ounces of gold. Group Ore Reserves are estimated at 2.1 million tonnes of copper and 3.1 million
ounces of gold.
The information in the section is drawn from the following releases:
Deposit
Estimate date
Release date
Prominent Hill Mineral Resources and Ore Reserves 2017
Prominent Hill Mineral Resources and Ore Reserves 2018
Carrapateena Mineral Resources 2017
Carrapateena Ore Reserves 2017
Fremantle Doctor Mineral Resource 2018
Nebo-Babel Mineral Resource
30-Jun-17
30-Jun-18
18-Nov-16
4-Aug-17
12-Nov-18
14-Nov-17
21-Nov-17
12-Nov-18
24-Aug-17
24-Aug-17
12-Nov-18
14-Nov-17
Note: All Mineral Resources and Ore Reserves are estimates. The Mineral Resource and Ore Reserve statements for Prominent Hill, Carrapateena,
and Fremantle Doctor, and their accompanying explanatory notes can be viewed in full at: ozminerals.com/operations/resources-reserves.html.
The Mineral Resource statement for Nebo-Babel and their accompanying explanatory notes can be viewed in full at: ozminerals.com/uploads/
media/171114_West_Musgrave_Project_to_progress_to_Pre-Feasibility_Study.pdf
Summary of significant changes since 2017
There have been no changes to the Mineral Resource estimates of Carrapateena, Nebo-Babel and
Succoth or the Carrapateena Ore Reserve estimate throughout 2018.
Fremantle Doctor in the Carrapateena province released its initial Inferred Mineral Resource estimate
in November 2018.
The Prominent Hill Open Pit Mineral Resource and Ore Reserves were fully depleted, with open pit
mining operations completed in March 2018.
Mining depletion of estimated underground Mineral Resources at Prominent Hill were offset by a lower
reporting cut-off grade and through growth as a result of diamond drilling in the 30 June 2018 update.
Surface ore stockpiles growth was wholly attributable to open pit mining.
Depletion through underground mining was offset through ore reserve growth as a result of diamond
drilling. Reflecting an improving geological confidence, the Proved Ore Reserve within the underground
mining area has increased by approximately nine million tonnes, noting that the Probable Ore Reserve
has decreased by this same amount.
9 2
ANNUAL AND SUSTAINABILITY REPORT 2018 Mineral Resources
Copper Mineral Resources
Category
Prominent Hill underground – $52/t cut-off
Tonnes
Mt
Measured
Indicated
Inferred
Total
Prominent Hill surface stocks – $16/t cut-off
Measured
Indicated
Inferred
Total
Carrapateena – $70/t cut-off
Measured
Indicated
Inferred
Total
Fremantle Doctor – 0.4% Cu cut-off
Measured
Indicated
Inferred
Total
Succoth – 0.3% Cu cut-off(a)
Measured
Indicated
Inferred
Total
Total
Measured
Indicated
Inferred
Total
50
23
46
119
13
0
0
13
61
65
8
134
0
0
104
104
0
0
156
156
124
88
314
526
Cu
%
1.3
1.1
1
1.2
Au
g/t
0.6
0.6
0.6
0.6
0.8
0.5
0
0
0
0
0.8
0.5
1.4
1.6
0.8
1.5
0
0
0.7
0.7
0
0
0.6
0.6
1.3
1.4
0.7
0.9
0.6
0.6
0.4
0.6
0
0
0.5
0.5
0
0
0
0
0.6
0.6
0.8
0.7
Ag
g/t
Cu
kt
Au
Koz
Ag
Moz
3
3
2
3
2
0
0
2
6
7
4
7
0
0
3
3
0
0
0
0
4
5
2
4
650
240
480
890
430
850
5
2
4
1,400
2,200
11
110
200
0
0
0
0
110
200
880
1,180
1,030
1,300
60
90
1,970
2,570
0
0
800
800
0
0
943
943
0
0
3,120
3,120
0
0
0
0
1,640
2,270
1,270
1,730
2,283
4,060
5,193
8,060
1
0
0
1
12
15
1
28
0
0
10
10
0
0
0
0
18
17
15
50
(a) This information was extracted from the Cassini Resources’ ASX Release entitled Maiden Succoth Resource Estimate dated 7 December 2015
and is available at cassiniresources.com.au/investorrelations/asx-announcements. OZ Minerals currently has a 51% stake in the West Musgrave
Project, however the data above is reported on a 100% asset basis.
M
i
n
e
r
A
l
r
e
S
o
u
r
C
e
S
A
n
D
o
r
e
r
e
S
e
r
v
e
S
9 3
Gold Mineral Resources
Category
Prominent Hill underground – $52/t cut-off
Tonnes
Mt
Cu
%
Cu
kt
Au
Koz
Ag
Moz
Measured
Indicated
Inferred
Total
Prominent Hill surface stocks – $16/t cut-off
Measured
Indicated
Inferred
Total
Total
Measured
Indicated
Inferred
Total
Nickel Mineral Resources(a)
Category
Babel – 0.25% ni cut-off
Measured
Indicated
Inferred
Total
nebo – 0.25% ni cut-off
Measured
Indicated
Inferred
Total
Total
Measured
Indicated
Inferred
Total
Au
g/t
0
2.3
2.7
2.6
0.8
2.3
2.7
1.2
Cu
%
0
0.4
0.4
0.4
0
0.4
0.3
0.4
0
0.4
0.4
0.4
Ag
g/t
0
1
0.7
0.8
2
0
0
2
2
1
0.7
2
Co
ppm
0
132
123
126
0
211
149
200
0
158
124
137
0
0.9
1.3
2.2
17
0
0
17
17
0.9
1.3
19
ni
kt
0
270
560
830
0
160
250
410
380
0
0
380
380
160
250
790
0
0.1
0.1
0.1
1
0
0
1
1
0.1
0.1
1
Cu
kt
Co
kt
0
305
630
935
0
10
21
31
0
8
0
8
0
18
21
39
0
0
185
165
5
5
190
170
0
455
565
0
470
635
1,020
1,105
0
2
3
5
15
0
0
15
15
2
3
20
0.1
0.8
0
0
0
0
0.1
0.8
0
0
0
0
0.1
0
0
0.1
Tonnes
Mt
ni
%
0
74
169
243
0
38
2
40
0
112
171
283
0
0.4
0.3
0.3
0
0.5
0.4
0.5
0
0.4
0.3
0.4
(a) This information is extracted from the Cassini Resources Limited Further Scoping Study (FSS) Summary released on 14 November 2017 by
OZ Minerals and Cassini Resources Limited in the ASX Release titled West Musgrave Project to progress to Pre-Feasibility Study released on 14
November 2017 and is available at ozminerals.com/uploads/media/171114_West_Musgrave_Project_to_progress_to_Pre-Feasibility_Study.pdf.
OZ Minerals currently has a 51% stake in the West Musgrave Project, however the data above is reported on a 100% asset basis.
9 4
ANNUAL AND SUSTAINABILITY REPORT 2018 Ore Reserves
Copper Ore Reserve
Category
Prominent Hill underground
Proved
Probable
Total
Prominent surface stocks
Proved
Probable
Total
Carrapateena
Proved
Probable
Total
Total
Proved
Probable
Total
Gold Ore Reserve
Category
Prominent surface stocks
Proved
Probable
Total
Tonnes
Mt
Cu
%
Au
g/t
Ag
g/t
Cu
kt
Au
Koz
Ag
Moz
28
12
40
13
0
13
0
79
79
41
91
132
Tonnes
Mt
15
0
15
1.4
1.1
1.3
0.8
0
0.8
0
1.8
1.8
1.3
1.7
1.5
Cu
%
0.1
0
0.1
0.6
0.7
0.6
0.5
0
0.5
0
0.7
0.7
0.5
0.7
0.7
Au
g/t
0.8
0
0.8
3
3
3
2
0
2
0
9
9
3
8
6
410
120
530
510
250
760
110
200
0
0
110
200
0
0
1,400
1,800
1,400
1,800
520
710
1,520
2,050
2,040
2,760
3
1
4
1
0
1
0
22
22
4
23
27
Ag
g/t
Cu
kt
Au
Koz
Ag
Moz
2
0
2
17
0
17
380
0
380
1
0
1
I
M
N
E
R
A
L
R
E
S
O
U
R
C
E
S
A
N
D
O
R
E
R
E
S
E
R
v
E
S
9 5
Material changes in the Mineral Resource and Ore Reserve estimates
OZ Minerals is not aware of anything that materially affects the information contained in the
Carrapateena or Nebo-Babel estimates since they were last reported.
OZ Minerals is not aware of anything that materially affects the information contained in the
Prominent Hill Mineral Resources and Ore Reserves Statement, 30 June 2018 other than changes
due to depletion since 1 July 2017. Depletion for the six months to 31 December 2018 amounts
to approximately 4.8 million tonnes at 1.3% Cu, 0.6 g/t Au and 3 g/t Ag.
OZ Minerals is currently undertaking a scoping study on an expansion of Carrapateena. This will
be released later in Quarter 1, 2019 along with an updated mineral resource.
Competent persons statement
The information in this report that relates to the mineral resources and ore reserves listed in the table
below is based on, and fairly represents, information and supporting documentation prepared by
the competent person whose name appears in the same row. Each person named in the table below
has sufficient experience which is relevant to the style of mineralisation and types of deposits under
consideration and to the activity which they have undertaken to qualify as a competent person as
defined in the JORC Code 2012. As a whole, the Mineral Resources and Ore Reserves Statement in
this report has been approved by each person named in the table below. Each person is a member of
the Australasian Institute of Mining and Metallurgy and consents to the inclusion in this report of the
matters based on their information in the form and context in which it appears.
OZ Minerals’ employees acting as a competent person may be shareholders in OZ Minerals Limited
and are entitled to participate in the OZ Minerals Performance Rights Plan.
Asset
Prominent Hill
Prominent Hill
Carrapateena
Carrapateena
Estimate
Name
AusIMM Number
Mineral Resource
Colin Lollo
Ore Reserve
Hendric Hendric
Mineral Resource
Stuart Masters
Ore Reserve
Murray Smith
225331
321723
108430
111064
109714
Fremantle Doctor
Mineral Resource
Heather Pearce
Nebo-Babel and Succoth are part of the OZ Minerals and Cassini Resources Ltd Joint Venture for the
West Musgrave Project of which OZ Minerals has a 51% majority. Mineral Resources for Nebo-Babel
and Succoth were undertaken on behalf of Cassini Resources Ltd prior to OZ Minerals reaching 51%.
There has been no material change to these Mineral Resources.
Mineral Resources reported in this document for the Nebo and Babel deposits were compiled by Mr
Andrew Weeks of Golders Associates Pty Ltd on behalf of Cassini Resources (as at 14 November 2017).
There has been no change.
Mineral Resources reported in this document for the Succoth deposit were compiled by Mr Aaron Green
of CSA Global on behalf of Cassini Resources (as at 7 December 2015). There has been no change.
Governance arrangements
OZ Minerals has established Mineral Resource and Ore Reserve processes, which establish company-
wide consistency, rigour and discipline in the preparation and reporting of Mineral Resources and
Ore Reserves in accordance with industry best practice.
Updates to Mineral Resource and Ore Reserve estimates compiled during 2018 were completed in
accordance with the OZ Minerals guiding principles, suitably modified to meet current company
structures, delegated authorities and estimate requirements.
These 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 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.
9 6
ANNUAL AND SUSTAINABILITY REPORT 2018 FINANCIAL
REPORT
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 of OZ Minerals
Limited for the financial year ended 31 December 2018 there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Paul Cenko
Partner
Adelaide
27 February 2019
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.
9 8
ANNUAL AND SUSTAINABILITY REPORT 2018
Consolidated statement
of comprehensive income
Revenue
Other income
Mining
Processing
Freight
Site administration
Royalties
Inventory movement
Corporate administration
Exploration and corporate development
Other expenses
Foreign exchange gain/(loss)
Profit before interest and income tax
Finance income
Finance expense
Profit before income tax
Income tax
Profit for the year attributable to equity holders of OZ Minerals Limited
Other comprehensive income
Items that will not be reclassified subsequently to future Income Statements
Change in fair value of investments in equity securities, net of tax
Items that may be reclassified subsequently to future to Income Statements
Net (losses)/gains on cash flow hedges, net of tax
Foreign operations – foreign currency translation differences
Other comprehensive loss for the year, net of tax
Total comprehensive income for the year attributable to equity holders of OZ Minerals Limited
Basic and diluted earnings per share (cents)
Notes
1
3
2
2018
$m
1,117.0
2.8
(310.1)
(146.5)
(72.9)
(41.1)
(56.3)
(83.7)
(29.0)
(67.2)
(14.2)
7.2
306.0
12.0
(5.1)
312.9
(90.5)
222.4
(6.7)
(17.8)
18.9
(5.6)
216.8
cents
71.5
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
2017
$m
1,023.1
5.0
(553.5)
(127.3)
(63.6)
(42.9)
(52.9)
190.2
(23.4)
(21.4)
(6.3)
(6.3)
320.7
12.5
(3.8)
329.4
(98.3)
231.1
(0.2)
(7.2)
–
(7.4)
223.7
cents
77.4
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes. The presentation of the consolidated statement of comprehensive
income statement has been changed as set out on page 103 to provide more meaningful presentation of the consolidated entities operations and the prior period comparatives restated to align
with the new presentation.
9 9
Consolidated statement
of changes in equity
For the year ended 31 December 2018
Notes
Issued
capital
Retained
earnings
Cash flow
hedge
reserve
Treasury
shares
Balance as at 1 January 2018
Total comprehensive income for the year
Profit for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss) for the year
Transactions with owners, recorded directly in equity
Shares issued – acquisition of Avanco
10, 14
245.0
Non-controlling interest in acquisition of Avanco
Non-controlling interest acquired during the year
Dividends
4
Share-based payment transactions, net of income tax
Equity issued under employee share plan
10, 11
Total transactions with owners
Balance as at 31 December 2018
–
–
–
–
6.4
251.4
2,280.4
$m
(3.6)
–
(17.8)
(17.8)
–
–
–
–
–
–
–
$m
(1.4)
–
–
–
–
–
–
–
0.2
–
0.2
Foreign
currency
translation
reserve
$m
Non-
controlling
interest
Total
equity
$m
$m
–
–
18.9
18.9
–
–
–
–
–
–
–
–
–
–
–
–
2,516.3
222.4
(5.6)
216.8
245.0
(121.9)
(121.9)
121.9
–
–
–
–
–
121.9
(67.6)
4.7
–
182.1
2,915.2
(21.4)
(1.2)
18.9
$m
$m
2,029.0
492.3
–
–
–
222.4
(6.7)
215.7
–
–
–
(67.6)
4.5
(6.4)
(69.5)
638.5
For the year ended 31 December 2017
Notes
Balance as at 1 January 2017
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
4
Share-based payment transactions, net of income tax
Purchase of treasury shares
Exercise of performance rights
Total transactions with owners
Balance as at 31 December 2017
Issued
capital
$m
2,029.0
Retained
earnings
$m
323.8
Cash flow hedge
reserve
$m
Treasury
shares
$m
Total
equity
$m
3.6
(2.1)
2,354.3
–
–
–
–
–
–
–
–
2,029.0
231.1
(0.2)
230.9
(59.7)
5.3
–
(8.0)
(62.4)
492.3
–
(7.2)
(7.2)
–
–
–
–
–
–
–
–
–
–
(7.3)
8.0
0.7
231.1
(7.4)
223.7
(59.7)
5.3
(7.3)
–
(61.7)
(3.6)
(1.4)
2,516.3
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
1 0 0
ANNUAL AND SUSTAINABILITY REPORT 2018
Consolidated
balance sheet
At 31 December 2018
Notes
Current assets
Cash and cash equivalents
Trade receivables
Lease receivables
Other receivables
Tax receivable
Inventories
Prepayments
Derivative financial instruments
Total current assets
Non-current assets
Deferred tax assets
Inventories
Other assets
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
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
Treasury shares
Foreign currency translation reserve
Total equity attributable to equity holders of OZ Minerals Limited
The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.
5
12
3
5
7
8
12
3
8
12
10
2018
$m
505.1
70.9
–
22.2
4.9
276.8
6.3
17.9
904.1
2.5
401.6
57.1
2,077.6
2,538.8
3,442.9
145.1
7.1
–
12.7
3.9
9.3
178.1
264.6
1.5
59.3
24.2
349.6
527.7
2,915.2
2,280.4
(21.4)
638.5
(1.2)
18.9
2,915.2
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
2017
$m
729.4
121.9
19.6
10.8
–
262.5
3.9
–
1,148.1
–
484.4
18.0
1,175.8
1,678.2
2,826.3
94.1
3.5
101.1
10.0
6.7
11.6
227.0
47.4
1.8
29.1
4.7
83.0
310.0
2,516.3
2,029.0
(3.6)
492.3
(1.4)
–
2,516.3
1 0 1
Consolidated statement
of cash flows
For the year ended 31 December 2018
Notes
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for exploration and evaluation
Income tax paid
Financing costs
Interest received
Net cash inflows from operating activities
Cash flows from investing activities
Payment for property, plant and equipment
Payment for Avanco, net of cash acquired
Payment for Carrapateena evaluation expenditure1
Net cash outflows from investing activities
Cash flows from financing activities
Dividends paid to shareholders
Payments for acquisition of treasury shares
Net cash outflows from financing activities
Net increase/(decrease) in cash held
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
6
14
4
2018
$m
1,204.1
(550.2)
(67.6)
(148.7)
(1.0)
13.0
449.6
(426.4)
(183.3)
–
(609.7)
(67.6)
–
(67.6)
(227.7)
729.4
3.4
505.1
2017
$m
1,000.3
(568.5)
(21.6)
(79.2)
(0.9)
12.8
342.9
(151.2)
–
(45.8)
(197.0)
(59.7)
(7.3)
(67.0)
78.9
655.7
(5.2)
729.4
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
1 In the second half of 2017, Carrapateena expenditure was included within payments for property, plant and equipment (PPE). Carrapateena capital expenditure incurred in 2018 is also
included within payments for PPE.
1 0 2
ANNUAL AND SUSTAINABILITY REPORT 2018 Notes to the consolidated financial statements
Group performance
The principal business activities of OZ Minerals Limited (OZ Minerals or the Company) and its
controlled entities (collectively the ‘Consolidated Entity’ or the ‘Group’) were the mining and
processing of ore containing copper, gold and silver, undertaking exploration activities and
development of mining projects.
The Company is incorporated and domiciled in Australia and limited by shares which are publicly
traded on the Australian Securities Exchange. OZ Minerals’ registered office relocated to
2 Hamra Drive, Adelaide Airport, South Australia 5950, Australia, effective 22 June 2018.
The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the
year ended 31 December 2018:
/
include general purpose financial statements prepared by a for-profit entity in accordance with
Australian Accounting Standards (AASBs) and the Corporations Act 2001, and comply with
International Financial Reporting Standards (IFRS)
/ are presented in Australian dollars which is also the functional currency of its principal operations.
The financial statements of the Company include consolidation of its subsidiaries referred to in
Note 14, including entities acquired on acquisition of Avanco Resources Limited (Avanco).
/ have amounts rounded off to within the nearest million dollars to one decimal place unless otherwise
stated, in accordance with Instrument 2016/191, issued by the Australian Securities and Investments
Commission.
The Consolidated Financial Statements have been prepared on a going concern basis and under
the historical cost convention, except for the following items which are measured at fair value,
or otherwise, in accordance with the provisions of applicable accounting standards:
/ financial instruments, including trade receivables
/ derivative financial instruments
/
items of inventory and property, plant and equipment which have been written down in accordance
with applicable accounting standards.
Other than the final dividend for the year ended 31 December 2018 as discussed in Note 4, no events
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.
The presentation of the Statement of Comprehensive Income has been changed to better represent
how the business is managed. This change has no impact on the results. Now, financial information
is aggregated according to function which gives a better representation of the financial performance
of the Consolidated Group taking into account the acquisition of Avanco, the advanced stage of
Carrapateena and an increasing operational focus. The presentation of the comparative period has
also been changed to align with the new presentation.
The detail of the reclassifications has not been disclosed as the presentation by nature cannot be readily
mapped into function.
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
1 0 3
Group performance
1. Operating segments
Segment
Principal activities
Prominent Hill
Carrapateena
Exploration &
development
Brazil
Mining and processing high grade underground ore containing copper, gold and silver along
with open pit ore from stockpiles. The Prominent Hill mine is located in the Gawler Craton
of South Australia. The Prominent Hill mine generates revenue from the sale of concentrate
containing copper, gold and silver to customers in Asia, Europe and Australia.
Exploration, evaluation and development associated with the Carrapateena project located in
South Australia.
Exploration and evaluation activities associated with other projects, including exploration
arrangements with Minotaur Exploration Ltd, Cassini Resources Limited, Mithril Resources,
Red Metal, Acapulco Gold, Mineral Prospektering i Sverige, Woomera Exploration Ltd,
Inversiones Mineras La Chalina S.A.C. and corporate development activities.
The Company undertakes its own exploration on tenements around existing operating and
development assets.
Mining and processing high grade open pit ore containing copper and gold at the Antas mine
in Brazil. Antas generates revenue from the sale of concentrate containing copper and gold to
customers in the United Kingdom, Europe and Asia. The company is undertaking exploration
at CentroGold, Pedra Branca and Pantera.
Corporate
(corporate activities)
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.
Recognition and measurement of revenue
The Consolidated Entity adopted AASB 15 during the year. The revised accounting policy in respect
of revenue is set out below.
The Consolidated Entity generates sales revenue primarily from the obligation to transfer concentrate
to the buyer and in some cases, based on the commercial terms of the contract, a secondary obligation
to deliver it to the customer. Revenue is allocated between the performance obligations and recognised
as each performance obligation is met, which for the primary obligation occurs when the concentrate
is delivered to a vessel or location and for the secondary obligation, if applicable, when the concentrate
is delivered to the customer’s location. Revenue arising from the secondary obligation is immaterial to
the Group and aggregated with the primary obligation for disclosure purposes. The Group’s sale of
concentrate incurs customary treatment and refining charges and other commercial costs consistent
with industry practice. These items are in essence a deduction from the value of metal contained within
the concentrate. These items are variable in nature and are accounted for as a deduction to revenue
when they are recognised.
As is industry practice, the Consolidated Entity typically makes sales whereby the final sales price for
the primary performance obligation is determined based on the market price prevailing at a date in
the future. Revenue for the primary performance obligation is measured based on the fair value of
the consideration specified in a contract with the customer at the time of settling the performance
obligation and is determined by reference to forward market prices. Provisional pricing adjustments,
which occur between the fair value at the time of settling the primary performance obligation and the
final price, are also recorded within revenue.
Gains and losses on hedge instruments related to sales contracts are also recorded in revenue and
generally offset the movement as a result of provisional pricing adjustments.
1 0 4
ANNUAL AND SUSTAINABILITY REPORT 2018 Net revenue by geographical region
9.2
123.3
554.3
)
m
$
(
s
e
t
a
r
t
n
e
c
n
o
c
l
f
o
s
e
a
s
m
o
r
f
e
u
n
e
v
e
R
600
400
200
0
4.2
67.4
1.2
94.8
239.4
23.2
10.3
139.8
534.7
Copper
Gold
Silver
4.8
64.8
229.6
0.5
30.5
8.1
2018 Asia
2018 Europe
2018 Australia
2017 Asia
2017 Europe
2017 Australia
Total revenue from sales of concentrates
Copper
Gold
Silver
Total
2018
$m
888.5
213.9
14.6
2017
$m
794.8
212.7
15.6
1,117.0
1,023.1
A new segment ‘Brazil’ has been added to the Group with the acquisition of Avanco. Operating
segments are components of the Consolidated Entity for which separate financial information is
available and is evaluated regularly by the Consolidated Entity’s key management personnel to decide
how resources are allocated and performance is assessed. As the Group now holds multiple operating
assets in its portfolio, and in view of future growth plans in Australia and overseas, a re-evaluation of
segment disclosure was undertaken to align with revised management reporting. This has resulted in a
change to the disclosed financial metrics below. In accordance with accounting standards, comparative
information has been reclassified in the same format.
31 December 2018
Revenue
Cost of goods sold(a)
Underlying EBITDA(b)
Capital expenditure
Property, plant & equipment
31 December 2017
Revenue
Cost of goods sold(a)
Underlying EBITDA(b)
Capital expenditure
Property, plant & equipment
Prominent Hill
Carrapateena
$m
1,066.2
(465.6)
618.2
77.4
671.6
1,023.1
(440.1)
583.1
53.6
711.5
$m
–
–
(11.4)
335.0
763.2
–
–
(5.2)
154.4
448.7
Brazil
$m
50.8
(36.2)
(1.9)
4.1
620.8
–
–
–
–
–
Exploration &
development
$m
–
–
(45.0)
7.0
–
–
–
(20.2)
–
–
(a) Includes an adjustment to increase the value of inventory by $25.0 million in respect to low grade gold ore stockpiles following an assessment
of the NRV of non-current ore (2017: $16.8 million).
(b) 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 and underlying EBIT. These measures are presented
to enable an understanding of the underlying performance of the Consolidated Entity.
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
Revenue information
presented is based on the
location of the customer’s
operations. Major customers
who individually accounted
for more than 10 per cent
of total revenue contributed
approximately 64 per cent of
total revenue (2017: 75 per cent).
Corporate
Consolidated
$m
–
–
(19.5)
9.9
22.0
–
–
(18.3)
7.6
15.6
$m
1,117.0
(501.8)
540.4
433.4
2,077.6
1,023.1
(440.1)
539.4
215.6
1,175.8
1 0 5
Reconciliation of consolidated underlying EBITDA to profit after tax
31 December 2018
$m
31 December 2017
$m
Underlying EBITDA
Non-underlying expense1
Depreciation
Capitalised depreciation into inventory/(unwind)
Earnings before finance income and tax
Net finance income
Profit before tax
Tax expense
Profit for the year attributable to equity holders of OZ Minerals Limited
540.4
(5.9)
(148.3)
(80.2)
306.0
6.9
312.9
(90.5)
222.4
539.4
–
(323.5)
104.8
320.7
8.7
329.4
(98.3)
231.1
1 Corresponds to acquisition costs associated with the Avanco transaction of $5.9 million relating to due diligence, legal, transaction and consulting fees.
Depreciation and amortisation expenses for the year
31 December 2018
$m
31 December 2017
$m
Mining
Processing
Site and corporate administration
Unwind/(capitalised) depreciation into inventory
Total depreciation and amortisation expense
The total employee benefits expense for 2018 was $59.8 million (2017: $56.2 million).
2. Earnings per share
Basic and diluted earnings per share – cents
Basic and diluted earnings per share
Inputs used in calculating basic and diluted earnings per share – $ millions
Profit after tax
108.2
27.2
12.9
80.2
228.5
2018
71.5
222.4
Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share
311,168,127
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.
282.0
28.4
13.1
(104.8)
218.7
2017
77.4
231.1
298,582,892
1 0 6
ANNUAL AND SUSTAINABILITY REPORT 2018 3. Income tax
Income tax expense comprises current and deferred tax of the Consolidated Entity. Current and deferred
tax expenses are recognised in other comprehensive income or directly in equity as is appropriate.
RECOvERABI LITY OF D EFERRED TAX ASS ETS
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.
Group taxation
The OZ Minerals Group principal operations are located in Australia and Brazil. Income tax expense,
current tax and deferred tax balances have been determined based on the tax laws and tax rates
applicable in the relevant jurisdiction.
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 Australian tax consolidated group.
Income tax expense in the income statement
Current income tax expense
Deferred income tax (expense)/benefit
Income tax expense
Reconciliation of income tax expense to pre-tax profit
Profit before income tax
Income tax expense at the Australian tax rate of 30 per cent
Adjustments:
Variation in overseas tax
Non-deductible expenditure
Revision for prior periods
Research and development benefits
Recognition of previously unrecognised tax losses
Derecognition of overseas losses
Income tax expense
2018
$m
(43.9)
(46.6)
(90.5)
2018
$m
312.9
(93.9)
1.8
(1.4)
(0.2)
–
7.4
(4.2)
(90.5)
2017
$m
(111.3)
13.0
(98.3)
2017
$m
329.4
(98.8)
–
(0.7)
0.3
0.9
–
–
(98.3)
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
1 0 7
Deferred tax assets and liabilities
Opening
balance
$m
Recognised
in income
statement
$m
Recognised
in equity
Acquisition
of Avanco
Closing
balance
$m
$m
$m
2018
Restricted tax losses
Property plant and equipment
Inventories
Provisions and accruals
Derivative financial instruments
Other
Net deferred tax liabilities
32.5
(105.4)
(4.7)
10.4
6.6
13.2
(47.4)
1.6
(34.0)
(0.1)
0.8
(10.3)
(4.6)
(46.6)
–
(6.4)
–
–
8.3
2.0
3.9
–
34.1
(172.0)
(317.8)
–
–
–
–
(4.8)
11.2
4.6
10.6
(172.0)
(262.1)
More information on deferred tax liabilities recognised on the acquisition of Avanco is provided under Note 14.
2017
Restricted tax losses
Property plant and equipment
Inventories
Provisions and accruals
Derivative financial instruments
Other
Net deferred tax liabilities
Opening
balance
$m
Recognised
in income
statement
$m
Recognised
in equity
Closing
balance
$m
$m
49.5
(135.6)
(4.8)
11.2
1.8
14.4
(63.5)
(17.0)
30.2
0.1
(0.8)
1.7
(1.2)
13.0
–
–
–
–
3.1
–
3.1
32.5
(105.4)
(4.7)
10.4
6.6
13.2
(47.4)
Recognised restricted tax losses are subject to an available fraction which limits the amount of these losses that can be utilised each year.
Unrecognised tax losses
A review of unrecognised tax losses was undertaken during the year and as a result, additional
restricted tax losses of $7.4 million tax effected (2017: nil) were recognised in the balance sheet.
Restricted tax losses of $170.7 million tax effected (2017: $178.1 million tax effected) remain
unrecognised in the balance sheet at 31 December 2018. Capital tax losses of $569.0 million
tax effected (2017: $595.0 million tax effected) remain unrecognised in the balance sheet at
31 December 2018.
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 the 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 that 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.
1 0 8
ANNUAL AND SUSTAINABILITY REPORT 2018
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
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. They 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 15 cents per share on 26 March 2019. The record date for entitlement to this dividend is 12 March
2019. The financial impact of the dividend amounting to $48.4 million has not been recognised in the
Consolidated Financial Statements for the year ended 31 December 2018 and will be recognised in
subsequent consolidated financial statements.
The details in relation to dividends announced or paid since 1 January 2017 are set out below:
Record date
Date of payment
Fully franked
cents per share
Total dividends
$m
12 March 2019
3 September 2018
12 March 2018
7 September 2017
10 March 2017
5. Inventories
26 March 2019
17 September 2018
26 March 2018
21 September 2017
24 March 2017
15
8
14
6
14
48.4
25.8
41.8
17.9
41.8
NET REALISABLE vALUE OF INvENTORIES
Inventories are recognised at the lower of cost and net realisable value (NRV).
NRV 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 NRV 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 NRV and may therefore
impact the carrying value of inventories.
)
m
$
(
e
u
a
v
l
y
r
o
t
n
e
v
n
I
350
300
250
200
150
100
50
0
321.0
31 December 2018
31 December 2017
213.2
191.2
184.9
188.4
163.4
70.9
50.5
Concentrates
at cost
Ore stockpile
(current) at cost
Ore stockpile
(non current)
at cost
Ore stockpile
(non current)
at NRV
21.0
20.8
Stores and
consumables
at cost
1 0 9
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
2018
$m
70.9
184.9
21.0
276.8
213.2
188.4
401.6
678.4
2017
$m
50.5
191.2
20.8
262.5
321.0
163.4
484.4
746.9
An assessment of the NRV of non-current ore resulted in an adjustment to increase the value of
inventory by $25.0 million in respect to low grade gold ore stockpiles being recognised in 2018
(2017: $16.8 million). The increase is a reversal of a previous impairment.
Recognition and measurement of inventories
Inventory is valued at the lower of cost incurred to bring product to its present location and
condition, and NRV.
Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs
comprise 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, equipment,
mining property and development assets, the latter of which includes deferred stripping assets and
mine rehabilitation costs incurred in the mining process.
NRV is calculated by estimating the value that is expected to be realised upon sale of concentrate after
deducting the 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 processing timing.
Inventories expected to be processed or sold within 12 months after the balance date are
classified as current assets and all other inventories are classified as non-current.
1 1 0
ANNUAL AND SUSTAINABILITY REPORT 2018 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
Foreign exchange loss on cash balances
Share based payments
Other items
Change in assets and liabilities:
Trade and other receivables
Prepayments & other assets
Inventories
Trade and other payables
Provision for employee benefits
Provision for demobilisation and other provisions
Derivative financial instruments
Net current and deferred tax liability
Net cash inflow from operating activities
2018
$m
222.4
148.3
1.8
(3.4)
4.7
3.9
46.8
(34.7)
83.7
35.1
(1.9)
5.9
(0.7)
(62.3)
449.6
2017
$m
231.1
323.5
7.9
5.2
5.3
5.4
(55.5)
1.0
(189.8)
(5.4)
0.8
(5.7)
–
19.1
342.9
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, at call deposits and cash equivalents.
F
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A
N
C
I
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L
R
E
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O
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1 1 1
7. Property, plant and equipment
2018
At cost
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount
Acquisition through business combination
Additions and transfers including deferred mining
Foreign currency exchange differences
Depreciation expense
Closing carrying amount
2017
At cost
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount
Reclassification of exploration assets
Additions and transfers including deferred mining
Depreciation expense
Closing carrying amount
Plant and
equipment
$m
Mine property
and development
$m
Freehold land
and buildings
$m
Capital work
in progress
$m
Total
$m
1,244.5
(892.4)
352.1
313.5
57.9
32.5
2.2
(54.0)
352.1
1,151.9
(838.4)
313.5
345.0
–
12.4
(43.9)
313.5
2,301.5
(1,424.4)
877.1
330.1
557.6
54.6
22.8
(88.0)
877.1
1,666.5
(1,336.4)
330.1
557.6
–
45.7
(273.2)
330.1
189.3
(133.2)
56.1
60.9
–
1.5
–
(6.3)
56.1
187.8
(126.9)
60.9
66.8
–
0.5
(6.4)
60.9
792.3
4,527.6
–
(2,450.0)
792.3
2,077.6
471.3
1,175.8
–
321.0
–
–
615.5
409.6
25.0
(148.3)
792.3
2,077.6
471.3
3,477.5
–
(2,301.7)
471.3
1,175.8
21.2
330.7
119.4
990.6
330.7
178.0
–
(323.5)
471.3
1,175.8
Depreciation was $148.3 million for the year compared to $323.5 million in 2017. Depreciation expense
decreased primarily due to the closure of the Prominent Hill open pit in the first quarter of 2018.
Capital work in progress includes Carrapateena mine development costs including the original
acquisition cost of $252.2 million.
The original acquisition of Carrapateena provided for two further payments upon commercial
production being reached:
/ US$50 million on production of copper, uranium, gold or silver.
/ US$25 million on production of rare earths, iron or any other commodity.
The further payments amounting to US$75 million do not constitute a liability and are not recognised in
OZ Minerals balance sheet because OZ Minerals has not reached the specified performance milestones
on which payment is legally required.
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.
Expenditure associated with mining which relates to developing access to new sections of an ore body
is capitalised as a mine development asset and depreciated on a units of production basis as ore is
extracted. When ore extraction and mine development occurs concurrently expenditure is allocated
between the cost of ore extraction (inventory) and mine development on the basis of the proportion
of underlying activity typically meters advanced or material moved.
1 1 2
ANNUAL AND SUSTAINABILITY REPORT 2018 F
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Mine property and development
Mine property and development includes mineral rights of $546.7 million (net of amortisation) associated with the acquisition of Avanco.
Mineral rights comprise identifiable exploration and evaluation assets, mineral resources and ore reserves which are acquired as part of
a business combination and are recognised at fair value at date of acquisition.
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 the sale of any concentrate produced from ore extracted and processed as part of development of the asset prior
to being deemed ready for use are deducted from the cost of the asset, less any further processing and selling costs incurred.
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.
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 cash generating unit (CGU) carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value, less costs to dispose and its 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 and 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.
RECOvERABI LITY OF AS SETS
Cash generating units are tested for impairment when there is an indication that the CGU may be
impaired. Examples of impairment indicators include the Group’s net assets exceeding its market
capitalisation, unfavourable fluctuations in commodity prices and foreign exchange rates, or a
decline in the CGU’s operating performance.
The Consolidated Entity undertook a review of the Prominent Hill, Carrapateena and the
Carajas CGU’s to determine whether there was any indication that these CGU’s had suffered an
impairment loss. The Consolidated Entity concluded that there were no such indicators that the
CGUs were impaired at the reporting date noting also that the Carajas CGU was only recently
acquired in an arm’s length transaction.
When the Group reviewed impairment indicators, consideration was given for negative trends
in the significant judgements and assumptions that may impact the CGU’s valuation in future
periods, including:
/ expected future cash flows based on a range of factors including Board-approved internal
budgets and forecasts which reflect expectations of resources and reserves; mine plans; short
and long term commodity prices and foreign exchange rates; and operating and capital costs
/ the value of mineral resources not modelled in Board-approved budgets, based on the use of an
appropriate resource valuation multiple to the contained copper equivalent within the resources
applicable to the CGU
/ the discount rate applied to the cash flows which reflects current market conditions.
In addition, the Consolidated Entity monitors for impairment indicators by considering the impact
of the above judgements and assumptions on the valuation of CGUs through periodic updates to
its business valuation models.
Such assumptions are subject to variation as a result of changes in future economic and
operational conditions. Consequently, the carrying value of the Consolidated Entity’s CGUs
may differ in future years if assumptions made do not eventuate and actual outcomes are less
favourable than present assumptions.
1 1 3
Depreciation methods adopted by the Consolidated Entity
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.
MIN ERAL RESOURCE A ND ORE R ESERvE ESTIMATES
The estimated quantities of mineral resource and ore reserve estimates 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 mineral resource and ore reserve 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;
and 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.
8. Provisions
MIN E REHABILITATION, RESTORAT ION & D IS MA N TL I NG O B LI GAT IO N S
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 environmental legislation changes and many other factors, including future
changes in technology, price increases and changes in interest rates. The calculation of these
provision estimates requires assumptions to be made as to: the 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.
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 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.
1 1 4
ANNUAL AND SUSTAINABILITY REPORT 2018 Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration of
areas disturbed during mining and exploration operations up to the reporting date for areas not yet
rehabilitated. Provisions for mine rehabilitation are based on the current estimated cost 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 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 12 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 a 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.
2018
$m
2017
$m
Current
Equipment demobilisation
Other provisions
Total current provisions
Non-current
Other provisions
Equipment demobilisation
Mine rehabilitation
Total non-current provisions
Aggregate
Other provisions
Equipment demobilisation
Mine rehabilitation
Total provisions
Reconciliation of provisions
Opening carrying amount
Acquisition of Avanco
Unwind of discount
Provisions utilised
Provisions increase/(decrease)
Closing carrying amount
–
3.9
3.9
9.3
3.1
46.9
59.3
13.2
3.1
46.9
63.2
2.9
3.8
6.7
–
–
29.1
29.1
3.8
2.9
29.1
35.8
Mine rehabilitation
provision
Equipment demobilisation
provision
29.1
8.0
3.5
(0.4)
6.7
46.9
2.9
3.1
–
(1.4)
(1.5)
3.1
9. Commitments
The Consolidated Entity has entered into Transmission Connection Agreements (TCA) with
ElectraNet for the transmission of power, build, own, operation and maintenance of power
transmission to Carrapateena and Prominent Hill. The total future commitment for these
arrangements is $547.5 million.
The Consolidated Entity has entered into various contracts with suppliers for the construction
of the Carrapateena Mine and sustaining Mine development at the Prominent Hill and Antas mines.
The total capital expenditure commitment in relation to these contracts as at 31 December 2018
was $303.0 million (2017: $405 million), which is expected to be incurred in 2019.
F
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A
N
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L
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1 1 5
Contributed equity
10. Issued capital
322,899,831 shares (2017: 298,664,750 shares)
Share capital movement
Opening balance at 1 January 2018
Shares issued for acquisition of Avanco
21 June 2018
26 June 2018
28 June 2018
2 July 2018
4 July 2018
6 July 2018
10 July 2018
12 July 2018
8 August 2018
Shares issued under employee share plan
13 July 2018
2018
$m
2,280.4
2017
$m
2,029.0
Number
of shares
Share capital
$m
298,664,750
2,029.0
20,518,559
216.4
312,923
298,053
161,857
44,835
201,862
858,650
599,534
538,808
700,000
3.1
2.9
1.6
0.4
1.9
8.0
5.6
5.1
6.4
Closing balance as at 31 December 2018
322,899,831
2,280.4
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 the 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.
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.
Shares bought and held by the 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 from total equity, until the shares are cancelled or reissued.
The Consolidated Entity issued 23,535,081 shares to Avanco Resources Limited shareholders during
2018 as a part of the purchase.
Issued ordinary share capital is classified as equity and is recognised at the fair value. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the
share capital value on issue.
1 1 6
ANNUAL AND SUSTAINABILITY REPORT 2018 F
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11. Share-based payments
The total expenses arising from share-based payment transactions recognised during the year as part
of employee benefit expenses, were $4.7 million (2017: $5.3 million). A description of OZ Minerals’
significant performance rights plans (PRP) and long term incentive plans (LTIP) are provided below.
Element
Performance rights granted under PRP
Performance rights granted under LTIP
Performance period
2018: 1 July 2018 to 1 July 2019
2017: 1 July 2017 to 1 July 2018
2016: 1 July 2016 to 1 July 2017
Service period
2018: 1 July 2018 to 1 July 2019
2017: 1 July 2017 to 1 July 2018
2016: 1 July 2016 to 1 July 2017
vesting conditions
Percentage vesting based on individual
performance against Key Performance Indicators
Exercise price
Nil
2018: 1 January 2018 to 31 December 2020
2017: 1 January 2017 to 31 December 2019
2016: 1 January 2016 to 31 December 2018
2015: 1 July 2015 to 30 June 2018
2014: 1 July 2014 to 30 June 2017
2018: 1 January 2018 to 31 December 2020
2017: 1 January 2017 to 31 December 2019
2016: 1 January 2016 to 31 December 2018
2015: 1 July 2015 to 30 June 2018
2014: 28 July 2014 to 15 July 2017
1. Total shareholder return (TSR)
TSR performance measured
Comparator Group
75th percentile or greater
Between the 50th and 75th percentile
50th percentile
Less than 50th percentile
2. Absolute share price growth(a)
OZ Minerals share price growth
over the performance period
Less than 20%
20% or greater
Nil
Percentage of vesting
100
Between 50 and 100 vest progressively
by using a straight-line interpolation
50
Nil
Percentage of vesting
Nil
100
(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, 2017 and 2018
were set on both TSR and absolute share price growth, weighted at 70% and 30% respectively.
Performance rights granted under the PRPs or LTIPs do not include dividends or voting rights. All
performance rights under current performance rights plans are automatically exercised upon vesting
which is dependent upon meeting both the service condition and the performance condition. When
issued, the shares on vesting of performance rights rank equally in all respects with previously-issued
fully-paid ordinary shares.
1 1 7
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-term incentive plans respectively. The models use the following inputs.
Grant date
Performance rights granted under the LTIP
Fair value at
grant date
$
Share price
at grant date
$
Expected
volatility
per cent
Expected
dividends
per cent
Risk-free
interest rate
per cent
1 January 2018
MD & CEO Tranche One (70%)
MD & CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
1 January 2017
MD & CEO Tranche One (70%)
MD & CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
1 January 2016
MD & CEO Tranche One (70%)
MD & CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
Performance rights granted under the PRP
1 July 2018
1 July 2017
1 July 2016
Performance rights
6.4
4.5
6.7
4.5
4.6
3.5
6.5
5.6
4.1
3.5
3.7
3.2
9.3
7.3
5.8
9.0
9.0
8.8
8.8
7.2
7.2
9.2
9.2
5.2
5.2
5.2
5.2
9.5
7.5
6.8
The movement in the number of performance rights during the year.
Opening balance
Rights granted
Rights vested
Rights forfeited
Closing balance
45.0
45.0
45.0
45.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
45.0
50.0
50.0
2018
Number
2,006,254
1,011,190
(762,005)
(207,702)
2,047,737
2.2
2.2
2.2
2.2
2.7
2.7
2.2
2.2
3.8
3.8
3.8
3.8
2.1
2.6
3.3
2.2
2.2
2.1
2.1
1.7
1.7
2.0
2.0
2.0
2.0
2.0
2.0
2.0
1.8
1.8
2017
Number
2,634,996
887,047
(1,114,212)
(401,577)
2,006,254
Recognition and measurement of share-based payments
The fair value 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 condition, such as a service condition or internal KPIs, any cumulative previously
recognised expense is reversed.
The fair value 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 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.
1 1 8
ANNUAL AND SUSTAINABILITY REPORT 2018 Risk management
12. Financial risk management
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 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, and its objectives, policies and processes for measuring and managing risks.
The Consolidated Entity’s activities expose it primarily to the following financial risks:
/ commodity prices
/ foreign currency exchange rates
/ credit risk
/
liquidity risk.
The Consolidated Entity holds the following financial instruments
Carried at fair value using level
one valuation technique (based
on share prices quoted on the
relevant stock exchanges)
Investments in equity securities
Carried at fair value using level two
valuation technique (quoted market prices
of copper, gold and silver adjusted for
specific settlement terms)
Trade receivables
Derivative financial instruments
1 The carrying value of each of these items approximates fair value.
Carried at amortised cost1
Cash and cash equivalents
Other receivables
Trade payables
Other payables
Recognition and measurement
Financial assets and liabilities are recognised when the Consolidated Entity becomes party to the
contractual provisions of an instrument.
Non-derivative financial assets
The Consolidated Entity classifies its financial assets as:
/ financial assets at fair value through other comprehensive income
/ financial assets at fair value through profit and loss
/
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.
Concentrate sales receivables are recognised in accordance with the recognition and measurement
criteria disclosed in Note one. 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 de-recognises a financial asset or a 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.
F
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1 1 9
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, the asset’s carrying amount cannot exceed what the
carrying amount would have been had the impairment not been recognised. 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 de-recognises financial liabilities when its obligations are discharged,
cancelled or expire. The difference between the carrying amount of the liability de-recognised
and the consideration paid and payable is recognised in the income statement
Derivative financial instruments
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 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.
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 the income statement. The
amount recognised in other comprehensive income is reclassified to the income statement in the same
period as the underlying item is recognised in the income statement.
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 matches 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 USD due to movements in gold prices and AUD:USD foreign
exchange rates. The Company has designated these gold derivative contracts as cash flow hedges.
The hedged gold sales represent around 62.6 per cent of forecast sales (gold oz.) in the period from
2019 to 2021 and around 46 per cent of the gold contained in stockpiles at 31 December 2018.
This programme is reviewed on a quarterly basis.
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 reduction
of $17.8 million was recognised in other comprehensive loss during 2018. At 31 December 2018,
contracts for 238,057 ounces of gold were outstanding with an average strike price of $1,742 per
ounce, as reflected in the chart adjacent.
1 2 0
ANNUAL AND SUSTAINABILITY REPORT 2018 Forward contracts entered (gold oz)
OZ Minerals average gold forward strike price (A$ per gold oz)
33,000
28,000
23,000
18,000
13,000
8,000
l
)
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d
o
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(
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r
a
w
r
o
F
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
F
o
r
w
a
r
d
r
a
t
e
(
A
U
D
p
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r
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z
)
1,850
1,810
1,770
1,730
1,690
1,650
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
HEDGE EFFECTIvENESS
A hedge relationship which is established at inception is assessed for 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. Significant judgement is exercised
regarding mine plans, sales forecasts and recoverable metal contained in mineral resources and
reserves when determining a hedge relationship’s effectiveness.
Copper derivative contracts
The Consolidated Entity manages the exposure to copper price volatility on completed sales from
contractual quotation pricing adjustments by entering into copper derivative contracts at the time of
concentrate shipments. These 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 after the date of sale on the income
statement is expected to be negligible.
Commodity price sensitivity analysis
If copper prices were to vary significantly, then the expected impact on the income statement would
be negligible due to the copper price hedging activity. As such, our analysis focuses on the impact
of movements in gold prices as variations in silver prices have also been deemed immaterial for the
purpose of this analysis (see table below). In accordance with Australian Accounting Standards, the
sensitivity analysis is on all financial assets and liabilities deemed material to the Consolidated Entity.
2018
Trade receivables
Gold hedges (FECs)
Total
2017
Trade receivables
Gold hedges (FECs)
Total
+10% movement in gold prices
-10% movement in gold prices
Impact on income
statement
net of tax
Impact on other
comprehensive income
net of tax
Impact on income
statement
net of tax
Impact on other
comprehensive income
net of tax
0.9
–
0.9
1.6
–
1.6
–
(2.3)
(2.3)
–
(0.4)
(0.4)
(0.9)
–
(0.9)
(1.6)
–
(1.6)
–
2.3
2.3
–
0.4
0.4
1 2 1
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 $0.9 million after tax
impact on the income statement on trade receivables balance of $70.9 million (2017: $121.9 million)
and has a $2.3 million after tax impact on the derivative financial liability of $15.6 million (2017: $16.3
million). In accordance with accounting standards, the impact has been calculated on the outstanding
balance that is subject to commodity price risk and does not include the impact of the movement in
commodity prices on the total revenue for the year.
Foreign currency exchange risk management and sensitivity analysis
The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are
held in currencies other than the Australian dollar.
The Group’s principal operations have a functional currency of Australian dollars. An entity’s
functional currency is the currency of the primary economic environment in which the entity operates.
Determination of an entity’s functional currency requires management’s judgement when considering
a number of factors, including the currency that mainly influences revenue, costs of production, and
competitive forces and regulations which impact on revenue. In addition, consideration must be given
to the currency in which financing and operating activities are undertaken.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing
at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange rates of financial assets and liabilities
denominated in foreign currencies are recognised in the income statement. The carrying amount of the
Consolidated Entity’s financial assets and financial liabilities by its currency risk exposure at the reporting
date is disclosed below.
Denominated in US$
presented in A$m
Other currencies
presented in A$m
88.1
69.3
(0.5)
(15.6)
141.3
42.6
(16.3)
119.7
(0.2)
145.8
10.0
–
(5.5)
–
4.5
–
–
–
–
–
Total
A$m
98.1
69.3
(6.0)
(15.6)
145.8
42.6
(16.3)
119.7
(0.2)
145.8
2018
Cash and cash equivalents
Trade receivables
Trade payables
Derivative financial instruments
Total
2017
Cash and cash equivalents
Derivative financial instruments
Trade receivables
Trade payables
Total
Exchange rates during the year
AUD:USD
AUD:BRL*
* BRL:USD foreign currency exchange rates were not applicable for 2017.
Average rate
31 December spot rate
2018
0.7479
2.7428
2017
0.7669
–
2018
0.7058
2.7319
2017
0.7794
–
1 2 2
ANNUAL AND SUSTAINABILITY REPORT 2018 At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the
functional currency by five per cent and all other variables were held constant, the Consolidated Entity’s
after tax profit would have changed by $5.7 million and other comprehensive income would have
changed by $0.5 million (2017: $5.7 million) after tax profit, $0.6 million other comprehensive income).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the
reporting date and adjusts their translation for a five per cent change in the foreign currency rate.
Interest rate risk management and sensitivity analysis
The Consolidated Entity does not have any borrowings as at 31 December 2018 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 all cash deposits have fixed interest rate terms.
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, cash deposits 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 and
derivative assets.
The credit risk on cash and cash equivalents is managed by restricting material financial transactions
to banks which are assigned an 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 acceptable level. Sales contracts generally require a provisional
payment of at least 90 per cent of the estimated value of each sale either promptly after vessel loading
or upon the vessel arriving at the discharge port. Where appropriate, sales are covered by letter of credit
arrangements with approved financial institutions.
Maximum exposure to credit risk for trade receivables at the reporting date by customer
geographic region
Europe
Asia
Australia
Total
2018
$m
7.2
44.6
19.1
70.9
2017
$m
–
82.9
39.0
121.9
Major customers who individually accounted for more than 10 per cent of total revenue contributed
approximately 64 per cent of total revenue (2017: 75 per cent). These customers also represent
88 per cent of the trade receivables balance as at 31 December 2018 (2017: 89 per cent). There were
no instances of customer default during 2018 and there are no significant receivables which are past
due at the reporting date.
Credit risk on derivative financial instruments is managed by restricting material transactions only with
counterparties who are at least category two members of the LME, or which are assigned an S&P
equivalent of A-1 short term credit ratings by international credit rating agencies.
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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. The market value is presented for
derivative financial instruments, 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
Total
2018
Cash and cash equivalents
Trade receivables
Other receivables
Trade payables
Derivative financial asset
Derivative financial liabilities
Total
2017
Cash and cash equivalents
Trade receivables
Other receivables
Lease receivable
Trade payables
Derivative financial liabilities
Total
505.1
70.9
28.6
(145.1)
17.9
(9.3)
468.1
729.4
121.9
10.8
19.6
(94.1)
(11.6)
776.0
–
–
–
–
–
(16.6)
(16.6)
–
–
–
–
–
–
–
–
–
–
–
–
(7.6)
(7.6)
–
–
–
–
–
(4.7)
(4.7)
505.1
70.9
28.6
(145.1)
17.9
(33.5)
443.9
729.4
121.9
10.8
19.6
(94.1)
(16.3)
771.3
The Consolidated Entity had access to the following borrowing facilities
which were undrawn at the end of the year
Expires on
Security
Revolving facility
April 2019
Unsecured
2018
A$m
100.0
2017
A$m
100.0
1 2 4
ANNUAL AND SUSTAINABILITY REPORT 2018 13. Contingencies
CONT INGENCIES
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.
The financial results of OZ Minerals in future periods may be impacted unfavourably in the event
of an unfavourable outcome of a number of matters outlined in this note.
Bank guarantees
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, associated
with the terms of mining leases, power infrastructure contracts, 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 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 requirements of the
recipient. These guarantees amounted to $209.1 million as at 31 December 2018 (31 December 2017:
$52.9 million) and are backed by deposits. Presently, all guarantees are voluntarily cash-backed by
deposits in order to reduce the bank fees payable but all funds can be withdrawn as and when required
should the need arise.
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 former 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 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).
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 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 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. OZ Minerals understands that the AFP is continuing its investigation
and OZ Minerals is continuing to fully 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 2018.
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 Consolidated Entity’s financial position.
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Group structure and
other information
14. Subsidiary acquisition
The Consolidated Entity acquired Avanco during the year which has been accounted for as a business
combination. The Consolidated Entity accounts for the acquisition of subsidiaries using the acquisition
method of accounting on acquisition date by recognising the identifiable assets acquired and
the liabilities assumed. OZ Minerals obtained control of Avanco Resources Ltd on 13 June 2018.
OZ Minerals acquired 100% of Avanco Resources Ltd’s shares through an off-market offer made
to shareholders and compulsory acquisition.
The Avanco acquisition provides geographical diversification into new mineral provinces for OZ
Minerals with a large copper gold mineral resource base in the Carajas. While the Antas operating mine
immediately increases the Consolidated Entity’s production, the CentroGold, Pedra Branca and Pantera
projects, along with other exploration prospects in the Carajas province (and the neighbouring Gurupi
province), significantly enhance the growth pipeline and potential for near-term production growth.
Avanco’s assets and liabilities have been recognised at their provisional fair values as at 30 June 2018
due to the proximity of the acquisition to 30 June 2018. The provisional recognition will be reviewed
and finalised within 12 months of the acquisition in accordance with accounting standards, should any
subsequent information provide better evidence of the fair values at the date of acquisition. If 100%
interest in Avanco was acquired on 1 January 2018, the revenue of the Consolidated Entity would have
been higher by $52.7 million and the profit after tax would have been lower by $4.9 million.
Development of the CentroGold Project is subject to an injunction which presently restricts development
activities. Legal processes are being followed to facilitate lifting of the injunction.
As at 31 December 2018 the fair values recognised remain provisional pending completion of a review
of the Antas open pit mine plan, Mineral resource estimates for the projects acquired and studies
undertaken by the former management of Avanco.
A. Consideration transferred
The consideration for each Avanco share was $0.085 cash and 0.009 OZ Minerals’ shares. During the
year 100% of 2,615.6 million Avanco shares were acquired. As a result, $222.4 million was paid in
cash to the shareholders of Avanco and OZ Minerals also issued 23.5 million shares, recognised at a
weighted average price of $10.41 per share.
Acquisition-related costs of $5.9 million (net of tax) relating to due diligence, legal, transaction
and consulting fees have been recognised under other expense in the Consolidated Statement of
Comprehensive Income.
Purchase consideration for Avanco acquisition
Payment of cash for acquisition
Issuance of shares for acquisition
Gross purchase consideration
Less: cash acquired
Net purchase consideration
The purchase consideration was measured at 100%.
$m
222.4
245.0
467.4
(39.1)
428.3
1 2 6
ANNUAL AND SUSTAINABILITY REPORT 2018
B. Assets acquired and liabilities assumed
Note
Book value
recognised
by Avanco
$m
Provisional
fair value
adjustment
$m
Provisional value
recognised by
OZ Minerals
$m
Cash and cash equivalents
Trade receivables
Other receivables
Inventories
Prepayments
Other assets
Property, plant and equipment
Total assets
Trade payables and accruals
Other payables & current provisions
Current tax provision
Deferred tax liabilities
Non-current provisions
Total liabilities
Net identifiable assets acquired
Non-controlling interest at the date of acquisition
3
39.1
1.6
5.6
12.6
1.4
5.4
122.3
188.0
11.6
32.7
1.0
(1.9)
11.1
54.5
133.5
–
–
–
2.6
–
–
493.2
495.8
–
(10.1)
–
172.0
–
161.9
333.9
39.1
1.6
5.6
15.2
1.4
5.4
615.5
683.8
11.6
22.6
1.0
170.1
11.1
216.4
467.4
121.9
Fair value of assets and liabilities was measured on a provisional basis for the following amounts,
pending completion of the final valuation:
/ Provisional fair value adjustment for property, plant and equipment includes the value of exploration
assets and mineral rights which were acquired as part of the business combination and are recognised
at estimated fair value as at the date of acquisition.
/
Income and market techniques were used to estimate the fair value of property, plant and equipment
and inventories having regard to expected net cash flows in future periods or, where applicable, the
estimated market value of a specific asset.
/ The fair value of all other assets and liabilities were estimated by applying the cost technique which
considers expected economic benefits receivable or probable economic outflows when due.
C. Non-controlling interest
At the date of acquisition
Non-controlling interest as acquired during the year
Non-controlling interest as at 31 December 2018
Non-controlling interest
$m
121.9
(121.9)
–
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15. Parent entity disclosures
As at, and throughout the financial year ended 31 December 2018, the parent entity of the
Consolidated Entity was OZ Minerals Limited.
Net reversal of provision for non-recovery of loan to subsidiary
Net other expense
Net profit/(loss) for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Financial position of the parent entity
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Treasury shares
Retained earnings
Accumulated losses
Total equity
2018
$m
101.7
(9.1)
92.6
(6.7)
85.9
6.7
2,281.6
2,288.3
11.8
0.4
12.2
2,276.1
2,280.4
(1.2)
245.4
(248.5)
2,276.1
2017
$m
8.5
(8.7)
(0.2)
0.2
–
2.9
2,125.9
2,128.8
109.5
0.4
109.9
2,018.9
2,029.0
(1.4)
239.8
(248.5)
2,018.9
OZ Minerals Limited is able to manage its net current liability position by its ability to control the
timing of dividends from its subsidiaries.
Refer to Note 13 for Contingencies and Note 16 for Deed of Cross Guarantee disclosures.
The parent entity’s capital expenditure commitment as at 31 December 2018 was nil (2017: nil).
Franking account details
Franking account balance at beginning of year
Franking credits from income tax paid during the year
Franking debits from income tax refund received
Franking debits from franked dividend paid during the year
Franking account balance at end of year
2018
$m
54.5
148.5
(2.1)
(29.0)
171.9
2017
$m
0.9
82.7
(3.5)
(25.6)
54.5
1 2 8
ANNUAL AND SUSTAINABILITY REPORT 2018 Basis of consolidation
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 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.
The Consolidated Entity reassesses whether it controls an entity if 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 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.
During the year the Consolidated Entity incorporated OZ Minerals Brazil (Holdings) Pty Ltd
ACN 625 407 141 as a wholly-owned subsidiary on 5 April 2018. OZ Minerals Brazil (Holdings) Pty Ltd
acquired Avanco Resources Limited (Avanco Group) by acquiring 100% of it’s issued share capital.
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Subsidiaries
The wholly-owned controlled entities of OZ Minerals Limited are listed below:
Entity
OZ Minerals Brazil (Holdings) Pty Ltd*
Avanco Resources Ltd*
Avanco Holdings Pty Ltd*
Estrela Metals Ltd*
AVB Copper Pty Ltd*
AVB Brazil Pty Ltd*
AVB Carajas Pty Ltd*
AVB Minerals Pty Ltd*
Estrela de Brasil Mineração Ltda*
AVB Mineração Ltda*
Avanco Resources Mineração Ltda*
Vale Dourado Mineração Ltda*
MCT Mineração Ltda*
ACG MINERAÇÃO LTDA*
ARL South America Exploration Ltd*
ARL Holdings Ltd*
Avanco Luc S.a.r.l.*
Avanco Lux I S.C.S*
Carrapateena Pty Ltd
CTP Assets Pty Ltd
CTP Operations Pty Ltd
Minotaur Resources Holdings Pty Ltd
OZ Exploration Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Holdings Limited
OZ Minerals Insurance Pte Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals Investments Pty Ltd
OZ Minerals Jamaica Limited
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Carrapateena Pty Ltd
OZ Exploration Chile Limitada
OZM Carrapateena Pty Ltd
OZ Exploration (USA) LLC
ZRUS Holdings Pty Ltd
* Entities which are part of Avanco group.
1 3 0
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Bermuda
Bermuda
Luxembourg
Luxembourg
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
Jamaica
Australia
Australia
Australia
Australia
Chile
Australia
USA
Australia
ANNUAL AND SUSTAINABILITY REPORT 2018 16. Deed of Cross Guarantee
The Company and all its Australian domiciled subsidiaries listed in Note 15 to the Consolidated
Financial Statements, except for, OZ Minerals International (Holdings) Pty Ltd, ZRUS Holdings Pty Ltd
and Avanco Group entities 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 Guarantee1
Revenue
Other income
Mining
Processing
Freight
Site administration
Royalties
Inventory movement
Corporate administration
Exploration and corporate development
Other Expenses
Foreign exchange gain/(loss)
Profit before interest and income tax
Finance income
Finance expense
Profit before income tax
Income tax
Profit for the year
Other comprehensive loss
Total comprehensive profit for the year
2018
$m
1,066.2
2.8
(266.9)
(140.2)
(68.6)
(35.4)
(52.5)
(86.0)
(29.0)
(60.1)
(6.1)
6.6
330.8
11.7
(4.2)
338.3
(95.2)
243.1
(26.1)
217.0
2017
$m
1,023.1
3.3
(557.5)
(127.3)
(63.6)
(42.6)
(52.9)
194.2
(23.4)
(21.1)
(4.9)
(5.8)
321.5
12.5
(3.8)
330.2
(98.4)
231.8
(7.4)
224.4
1 The presentation of the Consolidated Statement of Comprehensive Income of the entities within the Deed of Cross Guarantee has been changed
as set out on page 103.
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Consolidated balance sheet of the entities
within the Deed of Cross Guarantee
Current assets
Cash and cash equivalents
Trade receivables
Lease receivable
Tax receivable
Other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Inventories
Other assets
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
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
Treasury shares
Total equity
1 3 2
2018
$m
464.0
67.7
–
2.8
476.9
261.2
5.5
2017
$m
722.5
121.9
19.6
–
10.8
262.5
3.8
1,278.1
1,141.1
401.6
50.7
1,456.8
3.0
1,912.1
3,190.2
124.2
3.2
–
10.9
0.3
–
138.6
91.7
1.4
37.8
15.6
146.5
285.1
2,905.1
2,280.4
(23.0)
648.9
(1.2)
2,905.1
484.4
18.0
1,175.8
3.0
1,681.2
2,822.3
93.6
3.5
101.1
10.0
6.7
11.6
226.5
47.3
1.8
29.1
4.7
82.9
309.4
2,512.9
2,029.0
(3.6)
488.9
(1.4)
2,512.9
ANNUAL AND SUSTAINABILITY REPORT 2018 17. Key management personnel
Key management personnel remuneration
Key management personnel (KMP) are accountable for planning, directing and controlling the affairs
of the Company and its controlled entities.
KMP remuneration for the Consolidated Entity
Short-term employee benefits
Other long term benefits
Post-employment benefits
Termination benefits
Share-based payments
Total
2018
$
4,555,776
35,993
149,524
–
1,191,713
5,933,006
2017(a)
$
4,135,136
13,182
128,230
149,643
565,794
4,991,985
(a) The prior year comparative value of share-based payments has been adjusted from ($48,812) to $565,794 and total remuneration adjusted from
$4,377,379 to $4,991,985 to include the proportionate expense in relation the 2015 & 2016 LTIP grants.
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
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
settled within 12 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 12 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.
18. Related party transactions
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.
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19. Remuneration of auditors
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
Total fee for audit services provided by KPMG
Other assurance services provided by KPMG (NGER Act)
Total audit and assurance fee
Tax compliance and other tax advisory services
Other services provided by KPMG
Total non-audit fee
Total fees
2018
$
2017
$
545,000
24,900
569,900
50,000
619,900
202,000
101,600
303,600
923,500
425,000
23,549
448,549
50,000
498,549
180,000
44,328
224,328
722,877
20. New accounting standards
(i) 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 Entity in its Annual Report for the year ended
31 December 2017 except for the application for the AASB 15 as described below.
The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory.
The Consolidated Entity has for the first time applied AASB 15 Revenue from Contracts with Customers
with effect from 1 January 2018.
AASB 15 Revenue from contracts with customers
AASB 15 changes the timing (and in some case, the quantum) of revenue recognised from customers.
Under the previous standard revenue for domestic sales is recognised when the concentrates are
delivered to the customers’ premises, which is the point when the customer takes over the risk and
rewards of ownership transfer. The Consolidated Entity’s assessment indicates that under AASB 15,
revenue is continued to be recognised on the same basis when the customer obtains control of the
concentrates.
Revenue for export sales was recognised when shipments of concentrates were loaded on to the vessel
as the risk and reward of ownership was transferred to the customer at that point. The Consolidated
Entity’s assessment under AASB 15 indicates that the export contracts are made up of two performance
obligations. The first obligation is to deliver the concentrates to the port of shipment and the second
obligation is to organise shipping of the concentrate, which will be satisfied when concentrates
are delivered to the destination port. The Consolidated Entity assessed that revenue relating to the
first obligation of delivery of the concentrates to the port of shipping will be recognised at that point
and revenue relating to the shipping obligation will be recognised in future periods upon delivery
of concentrates.
The impact of the change in accounting policy was accounted for using the full retrospective
transitional provisions and did not have a material impact on the amount of revenue recognised as the
transfer of risks and rewards under the previous AASB 118. Revenue coincides with the fulfilment of
the performance obligation to transfer concentrate and revenue from freight services for cost, insurance
and freight contracts is immaterial in the current and comparative periods.
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ANNUAL AND SUSTAINABILITY REPORT 2018 (ii) Early adoption of standards
The Consolidated Entity has not early-adopted any standards in the Annual Report during the year
ended 31 December 2018.
(iii) Issued standards and pronouncements not early-adopted
At the date of authorisation of the Financial Statements, the following AASB Standards had been
issued but were not yet effective.
AASB 16 Leases
AASB 16 Leases eliminates the distinction between operating and finance leases and brings all leases
(other than short term and low value leases) onto the balance sheet. A lessee recognises a right-of-use
asset representing its right to use the underlying asset and a lease liability representing its obligation
to make lease payments. The standard is applicable to annual reporting periods beginning on or after
1 January 2019. The AASB 16 will result in higher assets and liabilities on the balance sheet and the
cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance of
retained earnings at 1 January 2019 with no restatement of comparative information.
The Consolidated Entity will recognise right-of-use assets and lease liabilities for the arrangements
assessed as leases on transition unless they are short term, low value, or previously did not meet the
definition of a lease for arrangements in place at 31 December 2018. AASB 16 will be applied to all
new arrangements entered into from 1 January 2019. Many activities of OZ Minerals’ operations are
conducted by contractors including mining, mine development, infrastructure and site services. Where
contracts require payment of fixed charges that relate to use of equipment or property, they will be
deemed to contain leases under AASB 16 and the present value of the fixed charges will be recognised
as a right-of-use asset along with a lease liability. The nature of expenses relating to such fixed
charges which would have been recognised as an expense attributable to the function, will change
to depreciation for right-of-use assets and interest expense on lease liabilities. The variable charges
required to be paid under the contracts will continue to be recognised as an expense in profit or loss
or capitalised as incurred depending on the purpose for which the activity was undertaken.
The Consolidated Entity is currently undertaking an analysis of the financial reporting impact,
noting that:
/ the group has not finalised the testing and assessment of all contracts, including contracts related
to the recently acquired subsidiaries
/ the preliminary accounting policies remain subject to change and will be finalised and disclosed in
its 2019 Half Year Financial Report along with initial application of the standard.
The Consolidated Entity is continuing its work on quantifying the impact of this standard.
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Directors’
declaration
1.
In the opinion of the directors of OZ Minerals Limited (the Company):
(a) the Consolidated Financial Statements and Notes set out on pages 99 to 135 and
the remuneration disclosures that are contained in the Remuneration Report on
pages 45 to 61, are in accordance with the Corporations Act 2001, and:
(i) give a true and fair view of the financial position of the Consolidated Entity as at
31 December 2018 and of its performance for the year ended on that date; and
(ii) comply with Australian Accounting Standards and the Corporations Regulations 2001;
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they fall due and payable.
2. The directors draw attention to page 103 of the Consolidated Financial Statements, which includes
a statement of compliance with international financial reporting standards.
3. At the date of this declaration, there are reasonable grounds to believe that the Company, and the
consolidated entities identified in Note 15, will be able to meet any liabilities to which they are, or
may become subject because of the Deed of Cross Guarantee between the Company and those
consolidated entities pursuant to ASIC Instrument 2016/785.
4. 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 2018.
Signed in accordance with a resolution of the directors.
Rebecca McGrath
Chairman
Adelaide
27 February 2019
Andrew Cole
Managing Director
and Chief Executive Officer
Adelaide
27 February 2019
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Independent
Auditor’s Report
To the shareholders of OZ Minerals Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of OZ Minerals Limited (the Company).
In our opinion, the accompanying Financial Report of the Company 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 2018
and of its financial performance for the year ended on that date; and
/ complying with Australian Accounting Standards and the Corporations Regulations 2001.
The Financial Report comprises the:
/ Consolidated balance sheet as at 31 December 2018;
/ Consolidated statement of comprehensive income, consolidated statement of changes in equity,
and consolidated statement of cash flows for the year then ended;
/ Notes including a summary of significant accounting policies; and
/ Directors’ Declaration.
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.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Company in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in
Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
Key audit matters
The Key Audit Matters we identified are:
/ Acquisition accounting for the purchase of Avanco Resources Limited and its controlled entities
/ Valuation of Low Grade Gold Ore Stockpiles
Key Audit Matters are those matters that, in our professional judgement, 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 International’), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation.
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Acquisition accounting for the purchase of Avanco Resources Limited and its controlled entities
Refer to Note 14 to the Financial Report
The key audit matter
During 2018 the Consolidated Entity purchased Avanco Resources Limited and its
controlled entities (Avanco).
Accounting for the purchase of Avanco is a Key Audit Matter due to the:
/ Size of the acquisition and therefore the impact on the Financial Report;
/ Significant judgement required to be exercised by the Consolidated Entity in
determining the provisional fair value of acquired minerals rights, based on
available information;
/ Complexity in accounting for deferred tax consequences arising on the acquisition;
/ Judgment required to be exercised by the Consolidated Entity in assessing the
nature and amount recognised for obligations to make future payments based
on income generated;
/ Uncertainties associated with the provisional acquisition accounting referred to
in note 14; and
/ Complexity of disclosures required by accounting standards.
How the matter was addressed in our audit
Our procedures included:
/ Reading the Bidders Statement to understand the key terms and conditions;
/ Evaluating the methodology used for the acquisition accounting against accounting
standard requirements and industry practice;
/ We focussed on the significant judgements made by the Consolidated Entity in
assessing the provisional value of mineral rights classified within property plant
and equipment. This included comparing the value of mineral rights recognised
for each project to:
/ advice received from the Consolidated Entity’s external advisors in relation to
the transaction; and
/ valuations published by brokers and analysts in order to determine whether the
values recognised by the Consolidated Entity were within a reasonable range.
/ Evaluating the competence and objectivity of the Consolidated Entity’s
external advisors and the extent to which information provided by them could
be relied upon.
/ Evaluating the Consolidated Entity’s measurement of the deferred tax liability
arising from the recognition of mineral rights against applicable accounting
standards and appropriate technical interpretative literature.
/ Evaluating the status of outstanding matters to finalise the provisional acquisition
accounting and whether any new information was available which required
amendment to the provisional acquisition accounting at years end.
/ Assessing the disclosure in the Financial Report using our understanding
of the acquisition, obtained from our testing, against the requirements of
accounting standards.
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valuation of Low Grade Gold Ore Stockpiles ($188.4m)
Refer to Note 5 to the Financial Report
The key audit matter
Significant judgment is required to be exercised by the Group in their assessment
of the value of low grade gold ore which will be combined with copper ore to be
mined in the future to produce concentrate. The valuation of low grade gold ore
stockpiles is a key audit matter because significant judgment is required by us in
evaluating the Group’s assessment of the value. The Group’s assessment is based
on a model which estimates future revenue expected to be derived from low grade
gold ore contained in existing ore stockpiles, less selling costs and further processing
costs to convert ore into concentrate. We particularly focus on those judgments
listed below which impact the valuation model:
/ Future metal production levels which are dependent on the volume and grade
of existing low grade gold ore stockpiles.
/ Future processing costs of low grade gold ore, and related selling costs.
/ Future commodity prices and foreign exchange rates expected to prevail when
the concentrate containing gold from existing low grade gold ore stockpiles is
processed and sold.
/ The timing of production which depends on the available capacity of the mill.
How the matter was addressed in our audit
Our procedures included:
/ We tested the controls relevant to:
/ the Group’s valuation of low grade gold ore stockpiles, including board
authorisation of key inputs to the assessment such as commodity prices,
foreign exchange rates, and processing costs; and
/ the Group’s process for recording and monitoring volumes and grades of
stockpiled low grade gold ore such as the use of quantity surveyors and
management review and approval of grades.
/ We assessed the methodology applied by the Group in determining 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 be
converted into finished goods.
/ We compared the results of quantity external surveyors to volume of low grade
gold ore stockpiles.
/ 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 Reserves
Statement.
/ We evaluated the Group’s key assumptions used to determine the value of low
grade gold ore stockpiles by:
/ comparing forecast processing costs of low grade gold ore against historical
actual processing costs to assess forecast processing cost assumptions;
/ assessing forecast selling costs by comparing to trends from existing customer
sales contracts;
/ assessing commodity prices and foreign exchange rates applied by the Group
against published analyst and broker data about commodity prices and foreign
exchange rates expected to prevail in the future; and
/ checking that low grade gold ore was only forecast to be processed when
there was capacity in the mill.
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Auditor’s responsibilities for
the audit of the Financial Report
Our objective is:
/ 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.
KPMG
Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards
will always detect a material misstatement when
it exists.
Paul Cenko
Partner
Adelaide
27 February 2019
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 the 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: www.auasb.gov.au/auditors_responsibilities/
ar1.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report
of OZ Minerals Limited for the year ended
31 December 2018, complies with Section
300A of the Corporations Act 2001.
Directors’ responsibilities
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 within the Directors’ report for the
year ended 31 December 2018.
Our responsibility is to express an opinion on
the Remuneration Report, based on our audit
conducted in accordance with Australian
Auditing Standards.
We draw attention to footnote (h) to Table 11 in
the Remuneration Report, which describes the
effect of the restatement of performance rights
disclosed as comparatives. Our opinion is not
modified in respect of this matter.
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 2018 Snapshot, Message from the
Chairman and CEO, OZ Minerals’ Company
Strategy, Prominent Hill Operating Overview,
Carrapateena Operating Overview, Musgrave
Province Operating Overview, Brazil Operating
Overview, Exploration and Growth Overview,
Governance, Directors’ Report, Financial
Review, Remuneration Overview, Sustainability
Report, Mineral Resources and Ore Reserves,
and Shareholder Information. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not
cover the Other Information and, accordingly, we
do 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 the 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 and whether the
use of the going concern basis of accounting
is appropriate. 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.
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ANNUAL AND SUSTAINABILITY REPORT 2018 Shareholder
information
Capital
Share capital comprised 323,874,831 fully paid ordinary shares on 14 February 2019.
Shareholder details
At 14 February 2019, OZ Minerals had 41,350 shareholders. There were 587 shareholdings with less
than a marketable parcel of $500 worth of ordinary shares.
Top 20 investors at 14 February 2019
Name
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Nominees Pty Ltd
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