More annual reports from OZ Minerals Limited:
2021 ReportPeers and competitors of OZ Minerals Limited:
Ero CopperA modern mining company
18 February 2021
The Manager, Companies
Australian Securities Exchange
Companies Announcement Centre
20 Bridge Street
Sydney NSW 2000
Dear Sir/Madam,
OZ Minerals 2020 Annual and Sustainability Report
OZ Minerals today announced its results for the full year ended 31 December 2020. Attached is
the Appendix 4E and 2020 Annual and Sustainability Report including:
• Directors’ Report
•
•
•
Remuneration Overview and Report
FY20 Financial Report
Sustainability Report
Sincerely,
Michelle Pole
Company Secretary and Senior Legal Counsel
This announcement is authorised for market release by OZ Minerals' Managing Director and CEO, Andrew Cole.
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 this results announcement to the market 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 2020 (financial year) compared to the
year ended 31 December 2019 (comparative period).
Consolidated results, commentary on results and outlook
Net Revenue
Profit after tax attributable to OZ
Minerals Limited equity holders
31 December 2020
$m
31 December 2019
$m
Movement
$m
Movement
%
1,342.0
212.6
1,107.0
163.9
235.0
48.7
21.2
29.7
The commentary on the consolidated results and outlook, including changes in the state of
affairs and likely developments of the Consolidated Entity, is set out in pages 8-23 and within
the financial review section of the Directors’ Report in pages 36-39.
Net tangible assets per share
Net tangible assets per share*
31 December 2020
$ per share
7.43
31 December 2019
$ per share
8.66
*Right-of-Use assets are considered intangible assets and excluded from total assets for the net tangible assets
calculation.
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, on 18 February 2021 the Board of Directors resolved to
pay a fully-franked dividend of 17 cents per share, to be paid on 26 March 2021. The record
date for entitlement to this dividend is 12 March 2021.
OZ Minerals offers a Dividend Reinvestment Plan (DRP) and eligible shareholders may
participate in the DRP in respect of all or part of their shareholding. A discount of 1.5 per
cent will apply to this allocation and there is no limit on the number of participating shares.
Shares will be allocated to shareholders under the DRP for the 2020 final dividend at an
amount equal to the average of the daily volume weighted average market price of ordinary
shares of the Company traded on the ASX over the period of five trading days commencing
on 11 March 2021. The last date for receipt of election notices for the DRP is 15 March 2021.
The financial impact of the dividend amounting to $56.4 million has not been recognised in
the Consolidated Financial Statements for the year ended 31 December 2020 and will be
recognised in subsequent consolidated financial statements.
Dividends announced or paid since 1 January 2019
Record date
Payment date
Fully franked
cents per share
Total dividends
$m
Dividend
reinvestment plan
12 March 2021
26 March 2021
18 September 2020
5 October 2020
12 March 2020
26 March 2020
3 September 2019
17 September 2019
12 March 2019
26 March 2019
17
8
15
8
15
56.4
26.0
48.6
25.9
48.4
Yes
Yes
No
No
No
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 the OZ Minerals’ 2020 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
20
20
OZ MINERALS
ANNUAL AND
SUSTAINABILITY
REPORT
Tjunguringanyi
Tjunguringanyi (working together) is how
the Antakirinja Matu-Yankunytjatjara
Aboriginal Corporation (AMYAC) and
OZ Minerals Prominent Hill Mine work
together. It is centred around our
collectively agreed values of:
Nintiringanyi (Learn from each other)
Kunpun (Sustainability/Strong)
Ngapartji-Ngapartiji (Reciprocity)
Kulini (Listening)
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.
CONTENTS
2020 SNAPSHOT
MESSAGE FROM THE CHAIRMAN AND CEO
OPERATING REVIEW
COMPANY STRATEGY
PROMINENT HILL
CARRAPATEENA
WEST MUSGRAVE
CARAJÁS
GURUPI
EXPLORATION AND GROWTH
GOVERNANCE
DIRECTORS’ REPORT
FINANCIAL REVIEW
REMUNERATION OVERVIEW AND REPORT
SUSTAINABILITY REPORT
MINERAL RESOURCES AND ORE RESERVES
FINANCIAL REPORT
SHAREHOLDER INFORMATION
4
6
8
12
14
16
18
20
22
24
28
36
50
70
120
126
166
4
2020
SNAPSHOT
Copper Pricing
$/lb
5
4
3
2
1
US$/oz
A$/oz
Jan 2016
Jan 2017
Jan 2018
Jan 2019
Jan 2020
Jan 2021
Gold Pricing
$/lb
3,000
2,500
2,000
1,500
1,000
500
US$/oz
A$/oz
Jan 2016
Jan 2017
Jan 2018
Jan 2019
Jan 2020
Jan 2021
Full Year Financial Results Summary
Group revenue
EBITDA
Net depreciation
EBIT
Net finance expense
Income tax (expense)
NPAT
Dividends per share (cents)
2020
$m
1,342.0
606.3
(283.4)
322.9
(27.1)
(83.2)
212.6
25
2019
$m
1,107.0
462.4
(228.9)
233.5
(4.9)
(64.7)
163.9
23
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 5
Tonnes of copper produced:
Ounces of gold produced:
97,620
All Assets
257,987
Lannavaara and Painirova, Sweden
Paraiso, Peru
Operating mine
Study phase
Exploration
Mine in construction
Prominent Hill
Underground operations
Copper concentrate
(containing gold and silver)
Shaft Expansion Study
underway
Carrapateena Province
Ramp up to 4.25 Mtpa
run rate completed in
December 2020
Copper concentrate
(containing gold and silver)
Carrapateena Block Cave
Expansion approved
Carajás Province
Hub and spoke approach
using established Antas
mine processing facilities
New satellite underground
mine, Pedra Branca,
in construction
Potential satellites in
Clovis and Santa Lúcia
Potential additional hub
at Pantera
Gurupi Province
Carajás Province
Antas
Pedra Branca
Santa Lúcia
Pantera
Clovis
Yarrie
Musgrave Province
Coompana
Lawn Hill
Gulf
Three Ways
Mount Skipper
Jericho
Breena Plains
Eloise
Carrapateena Province
Prominent Hill Province
Painirova
With Mineral
Prospektering i Sverige
in northern Sweden
Paraiso
With Peruvian company
Inversiones Mineras
La Chalina S.A.C.
Targeting iron–oxide–
copper–gold (IOCG) deposits
in the Arequipa district
of southern coastal Peru
Lannavaara
With private explorer
Mineral Prospektering
i Sverige in the Norrbotten
district of northern Sweden
Red Metal multi-site
exploration alliance
Yarrie for copper–gold
in Western Australia
Gulf for copper–gold
in Queensland
Lawn Hill for zinc–lead
–silver in Queensland
Three Ways for zinc–lead
–silver in Queensland
Mount Skipper for zinc–lead
–silver–copper in Queensland
Musgrave Province
West Musgrave
copper–nickel project in
advanced study phase
Acquired JV partner,
Cassini Resources Limited,
in October 2020
Gurupi Province
CentroGold project to
become Gurupi Hub
Coompana
With Mithril Resources Limited
Targeting copper–nickel
magmatic sulphide
mineralisation
Eloise
Exploration joint venture
with Minotaur Exploration
in Queensland
Jericho
Exploration joint venture
with Minotaur Exploration
in Queensland
Breena Plains
Exploration join venture
with Minotaur Exploration
in Queensland
66
MESSAGE
FROM THE
CHAIRMAN
AND CEO
DEAR SHAREHOLDERS,
2020 was a year that has impacted all
of us in different ways. At OZ Minerals,
we applied ourselves to challenges that
emerged, to protect our people, deliver
our plans, and harness disruption to
accelerate our strategic aspirations.
Our culture enabled us to quickly adapt to
remote working and a volatile environment.
Our devolved operating model meant our
mine sites were able to rapidly respond to
the changing COVID-19 restrictions, and
the commitment of our people helped us
deliver ahead of initial operational targets
and to advance our strong pipeline of
growth opportunities.
We improved our overall safety performance
with a Total Recordable Injury Frequency
Rate (TRIFR) of 5.29 compared with 6.27
in 2019 and lifted our focus on, and
commitment to, mental health.
The Total Recordable Injury Frequency (TRIF)
reporting methodology was updated in
August 2020 and all data reported from
1 January 2020 was retrospectively adjusted
to align with the updated methodology. The
change (see page 83) takes into consideration
our move to more flexible work.
GROWTH ENABLED BY CULTURE
In the Prominent Hill Province, the
Prominent Hill mine cemented its position
as a low-cost reliable operation while
demonstrating the potential to increase
underground production and extend
mine life by accessing deeper ore with a
shaft haulage system. With sustainable
annualised rates at or above 4 million tonnes
per annum (Mtpa) during the year, future
decline development spend was brought
forward to increase mining rates to between
4 Mtpa and 5 Mtpa from 2022. Accelerating
the decline development to the bottom
of the known resource will enable us to
mine simultaneously from the current
and deeper levels.
In the Carrapateena Province, the
new Carrapateena mine ramped up to its
4.25 Mtpa run rate and the sub-level cave
is performing to plan. The Carrapateena
Expansion progressed to the next study
phase, following the release of a study
update showing the potential value uplift
of converting the bottom half of the sub-
level cave to a block cave, forming the basis
of a multi-generational mining province.
In early 2021, the Board approved the
block cave expansion and early works
are scheduled to begin in Q4 2021.
In the Musgrave Province, the West
Musgrave Project increased in value over
the course of the year. A pre-feasibility
study (PFS) update released in December
2020 presents a larger 12 Mtpa mine
(previously 10 Mtpa) while maintaining the
same 26-year mine life and powered by
70–80 per cent renewable energy.
We acquired our project joint venture
partner, Cassini Resources, which provides us
with flexibility regarding future development
and funding options.
Exploration activities around the world were
on hold for most of the year but resumed in
the latter months within a COVID-19-safe
framework.
The Brazil team continued to operate while
managing a much higher concentration
of COVID-19 cases than had occurred in
Australia. Their robust processes limited
cases on site to low numbers at any one
time and their test, trace and isolate regimes
prevented widespread infection. The Carajás
Hub is now taking shape with Pedra Branca
ore being trucked to the Carajás East
processing hub. In the Gurupi Province,
we made progress, though not as much
as we would have liked, towards removing
the injunction on the CentroGold Project.
Our strong operational and financial
performance allowed for continued
investment in growth activities, $74.6 million
in dividends paid to shareholders, and we
ended the year with a net cash balance
of $31.7 million. The Board has declared
a total, fully franked dividend for 2020 of
25 cents per share, made up of a half year
payment of 8 cents per share and an
end-of-year payment of 17 cents. 2020
earnings per share totalled 65.2 cents.
Culturally and strategically, we advanced
our Strategic Aspirations including:
Flexible work with work life plans
that allowed our people to organise
their work around their life.
Zero Scope 1 emissions, zero net
waste and minimising water use.
Being Agile by implementing The OZWay
of operating, ensuring we can adapt
quickly to future changes.
Making innovation easier where our
people are encouraged to develop ideas
and collaborate with others outside the
industry and with the crowd.
Being data driven, where we gather
and use data and create insights into
our business for faster, better, and more
creative decision making, and to reduce
manual processes.
STAKEHOLDER VALUE CREATION
We further hardwired value creation for
our Stakeholders into our governance
framework and developed a set of metrics
which will have the dual purpose of being a
performance assessment tool and focusing
our work and behaviour. The Stakeholder
Value Creation Metrics support the
achievement of our Purpose, ‘Going beyond
what’s possible to make lives better’. The
Metrics are published in the Strategy section
of this report (page 8) and are referenced
frequently in the Sustainability section.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS Message froM the ChairMan and Ceo
7
The focus is on safe operational delivery
at our assets, on advancing the project
studies at Prominent Hill, Carrapateena
and West Musgrave, and developing out
the Carajás Hub strategy in Brazil. We’ll
also be continuing our exploration
activities where possible.
We are proud of the achievements of
our team in 2020, and we have exciting
opportunities ahead of us including the
further development of our Modern
Mining Company culture.
We thank our people for their dedication
and energy in delivering results within an
extremely difficult environment. We greatly
appreciate the ongoing support of our
Stakeholders.
Finally, we thank you, our shareholders,
for your continued support, trust and
confidence.
Rebecca McGrath
Chairman
18 February 2021
Andrew Cole
Managing Director and CEO
18 February 2021
Our Strategy is centred on value creation
for our five Stakeholder groups – employees,
communities, governments, suppliers
and shareholders – and stakeholder value
creation requires performance across
multiple dimensions.
Similarly, the challenges associated
with sustainable development are also
multifaceted, involving economic, social,
and environmental considerations.
In this respect we created a Stakeholder
Support Fund to help build resilience for our
Stakeholders in a COVID-19 environment.
It will continue into 2021. We made strong
progress on implementing our roadmap
for reporting integrated climate risks and
climate-related disclosures in line with the
Task Force on Climate-related Financial
Disclosures framework. We also issued our
Modern Slavery Statement (ozminerals.com/
sustainability/modernslavery) in support of
addressing a global issue.
For OZ Minerals, Partnering is a
strategic enabler for cross-sector and
multi-disciplinary value creation. This will
help us gain a greater understanding of our
context, gain more exposure to diversity
of thought, and better appreciate what
constitutes value for our Stakeholders.
LOOKING AHEAD
Much of the world moved into recession
in 2020, induced by COVID-19. Many
countries provided support to their people
and their economies during 2020. It is not
known what the full effect will be on the
individual and world economies when this
support is withdrawn. However, as countries
emerge from the pandemic, a period of
growth is expected. The consensus is that
the focus on decarbonisation and reducing
the environmental footprint of business
will continue, and likely accelerate.
In this regard, as a producer of copper,
an important mineral in the renewables
industry, we are well placed to take
advantage of potential growth in demand.
We remain confident about the long-term
fundamentals of copper. It has seen price
growth over the course of 2020 reflecting
supply issues during the year and also
potential future demand growth, with
both copper and nickel being key elements
for the transition to fossil-free electric
energy production.
2021 will see OZ Minerals moving into our
next phase of growth. We have a range of
greenfield and brownfield options in the
mature mining regions of Australia and
Brazil, and our strong balance sheet provides
financial flexibility for growth opportunities.
2020 FINANCIAL
AND OPERATIONAL
HIGHLIGHTS
$1,342 million revenue
$212.6 million statutory
net profit after tax
$31.7 million net cash balance
65.2 cents earnings per share
Total dividends for 2020:
25 cents per share fully franked
Sixth successive year copper
production and cost guidance
met at Prominent Hill
Prominent Hill Expansion Study
progressed to next milestone
Carrapateena ramped up to
4.25 Mtpa production
West Musgrave value and scale
uplift in PFS Update
Development of the Carajás
East Hub in Brazil
International earn-ins
– Sweden and Peru
88
STRATEGY
the oZWaY
Creating value for all our Stakeholders – shareholders,
employees, communities, governments, and suppliers
– is at the heart of our Strategy. This concept of value
creation has been embedded into our governance
systems through our process standards and how we
assess risk. It drives us to deliver on our Purpose of
‘Going beyond what’s possible to make lives better’.
OUR STRATEGY
Every year, we review our Strategy to
ensure it continues to enable us to create
stakeholder value and be a modern mining
company. Our Strategy focuses on HOW we
deliver, and two important elements are:
Our Purpose – Going beyond what’s
possible to make lives better which
was developed in consultation with
our people.
The OZWay – a simple model
that explains how all the parts of
OZ Minerals fit together.
STRATEGIC ASPIRATIONS
AND ACCELERATION PRIORITIES
This year, we focused on describing
OZ Minerals’ Strategic Aspirations. These
Strategic Aspirations challenge our people
to realise our full competitive advantage
in an ever-changing world. Together,
our Strategy and its embedded Strategic
Aspirations, support achieving our Purpose
which is a collective vision for the business
to work towards.
These Strategic Aspirations align with
the Strategy elements. These aspirational
statements guide our planning and our work.
They give people permission to stretch their
thinking and experiment. As we work to
deliver the Strategic Aspirations, we expect
to see value created for our five Stakeholder
groups.
A Modern Mining Company
During the depths of COVID-19 we
established a project, Project Beyond, to
ensure we emerged from the pandemic
stronger and closer to achieving our
Strategic Aspirations. Over 450 ideas were
gathered from across our business which
were combined with external multi-sector
benchmarking. These were then refined
and distilled into our Acceleration Priorities.
These Acceleration Priorities will help
modernise how we work, fast-track our
ethical and sustainable aspirations and
refine and prioritise the fundamentals
of our business. They are short to
medium-term priorities that we would
have done eventually but have chosen
to accelerate now.
The Priorities include:
normalising and systemising flexible
and remote work for our people
moving to the use of agile work
methodologies
removing bureaucracy so innovation
can occur more freely
accelerating the implementation of
a whole-of-value chain, real time,
data-driven decision-making tool set
greater inclusion of our external
stakeholders in our design teams
and decision-making processes.
G L O B A L COPPER
P A R TNERING
D
E
V
L
O
V
E
D
E
L
I
G
A
D
N
A
VALUE
CREATION
Our
Context
Our
Choices
H
O
INVEST I N G
RESPONS I B L Y
W WE WORK T O G E
Our
Enablers
Our
Work
Our
Performance
I
L
E
A
N
A
N
D
N
N
O
V
A
T
I
V
E
R
E
H
T
Employee
Value
Community
Value
Government
Value
Supplier
Value
Shareholder
Value
GOING BEYOND WHAT’S POSSIBLE TO MAKE LIVES BETTER
OUR CONTEXT
OUR CHOICES
OUR ENABLERS
OUR WORK
OUR PERFORMANCE
– Macro Environment
– Stakeholder Expectations
– Constitution
– Laws and Regulations
– Strategy
– Risk Appetite
– Policies
– Code of Conduct
– Organisational Model
– Process Standards
– Specifications
– Performance Standards
– Risks
– Business Plans
– Capability
– Goals
D
E
V
L
O
V
E
D
– Compliance
– Reporting
– Engagement
– Assurance
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS
strategY
9
oUr strategiC asPirations and aCCeLeration Priorities heLP foCUs oUr WorK on three or foUr high-iMPaCt aCtiVities Under eaCh
eLeMent of oUr strategY.
Strategic Aspirations
Partnering
Global copper
Lean and innovative
Our business model empowers
Assets to optimise for their local
conditions.
We deliver the activities along
our value chain to enable our
local Stakeholder aspirations
for generations to come.
We work closely with our
Stakeholders to create mutual
value by building each others’
capability and capacity.
Devolved and agile
We work with the best talent
and capability no matter where it
resides, driving an outcome-based
organisation.
Our Assets are brought to full value
early through a rapid approach to
our project pipeline and provide
optimal value for stakeholders.
Our Assets are scalable and adaptive.
We are a low bureaucracy
organisation structured around
the work to be done rather than
traditional concepts of roles, to
enable rapid decision-making free
from traditional hierarchy.
We responsibly produce clean value-
adding products in partnership with
our customers in a transparent manner.
G L O B A L COPPER
P A R TNERING
D
E
V
L
O
V
E
D
E
L
I
G
A
D
N
A
VALUE
CREATION
H
O
INVEST I N G
RESPONS I B L Y
W WE WORK T O G E
I
L
E
A
N
A
N
D
N
N
O
V
A
T
I
V
E
R
E
H
T
We strive to minimise water use
and add value when we do.
We will emit zero Scope 1 emissions
and strive to systematically reduce
Scope 2 and 3 emissions across our
value chain.
We consume and produce in a
way that generates zero net waste
and creates value for stakeholders.
We use data and technology for
tactical decision making, repetitive
work and to improve safety, allowing
our people to focus on complex and
innovative thinking.
Our simplified systems and processes
are a competitive advantage.
How we work together
Investing responsibly
We are a virtual organisation bound
Our Partnering and diversified
by our Purpose and Aspirations, not by
geography or physical infrastructure.
ownership models create shared
responsibility across all Stakeholders.
We challenge all assumptions about
how and where work needs to be
done and what’s possible.
We deliberately weave personal and
professional growth into our everyday
work, enabling people to do the best
work of their lives.
We attract investment due to how
we operate, our strong financial
returns and our top quartile
shareholder returns.
Acceleration
priorities support the
Strategic Aspirations
Acceleration Priorities
Flexible workforce
Agile
Innovation
work life plans
remote working where possible
remote operations centres
Accelerate organic growth
pipeline including
bring forward Prominent Hill decline
update CentroGold PFS
resume exploration and resource drilling
project management
mindset
Ethical and sustainable
reduce high-emissions energy use
baseline Scope 3 emissions
concentrate traceability
making it easier to bring forward
and develop ideas
Data
greater use of data to make faster,
better decisions
Partnering for mutual value
and better outcomes
10
STAKEHOLDER VALUE
CREATION METRICS
We also developed a set of Stakeholder
Value Creation Metrics during the year that
provides a tangible assessment of how
and where we create value. Reporting on
these Metrics is aligned with the different
elements of The OZWay. It also flows
through to our Purpose, further embedding
a focus on value creation into what we do.
Our Stakeholder Value Creation Metrics
consider:
what constitutes value from our
Stakeholders’ perspectives
the data we currently collect
how The OZWay applies
our Strategy, Aspirations and Priorities
our Purpose.
We have referenced our Stakeholder
Value Creation Metrics throughout this
year’s Annual and Sustainability Report, in
particular, within our Sustainability Report
(page 70). The Metrics harness data we
already collect as part of our operations,
and presents them in a way that allows
for clear, consolidated tracking of progress
against each metric.
In articulating our Stakeholder Value
Creation Metrics, we can demonstrate
whether we are creating value for our
Stakeholders and the Metrics will drive
behavior within the Company. They
support our Policies and achievement
of our Strategic Aspirations and
Acceleration Priorities.
staKehoLder VaLUe Creation MetriCs
G L O B A L COPPER
P A R TNERING
D
E
V
L
O
V
E
D
E
L
I
G
A
D
N
A
VALUE
CREATION
H
O
INVEST I N G
RESPONS I B L Y
W WE WORK T O G E
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A
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I
V
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E
H
T
Going beyond what’s possible to make lives better
Share price and dividends
Grow share price: measured relative to peer group / sustainable dividend (TSR)
Reserve growth
Grow OZL’s Copper Reserves: measured relative to OZL’s Reserve at the end of previous year
All-In Sustaining Costs (AISC)
Bottom half of cost curve: measured relative to global copper producers
Governance
Board effectiveness: Compliance with ASX’s corporate governance
principles and recommendations
Employment by jurisdiction
Workforce – local / state / out of state / Land Connected and Indigenous Peoples
Taxes and royalties
Income tax expense / royalties (total and jurisdictions)
Capital investment
Capital investment
Emissions and energy
Scope 1 & 2 emissions intensity (tCO2-e per t Cu Eq) / Scope 1 & 2 absolute
emissions / net energy intensity (per t Cu Eq) and renewable energy percentage
Local content
Value spent with local suppliers through supply chains
Community engagement
Number and average duration for resolution of concerns, complaints and grievances
Cultural heritage
Unauthorised cultural heritage breaches / signifi cant environmental and social incidents
Social contribution
Quantity and case studies
Partnering case studies
Partnering
Human rights
Water
Waste
Modern Slavery Act action plan Implementation and number of incidents
Water consumed (per t Cu Eq) / water withdrawal in areas of extreme water stress (%)
Non-mineral waste produced (per t Cu Eq)
Land and biodiversity
Area (ha) disturbed in high biodiversity conservation areas
Inclusion
Diversity
Inclusion maturity upward trend
Diversity of thought and demographic
Safety performance
Total Recordable Injury Frequency Rate (TRIFR) and zero fatalities
Workforce engagement
Employee Survey Results above industry benchmark
Net Promoter Score (NPS)
Net Promoter Score (NPS) survey
On time payment
Proportion (number and value) of invoices paid on time within payment terms
(7, 14, 30, 60 and >60 days of invoice date)
Supplier Value by jurisdiction
OZ Minerals expenditure by number of suppliers and value spent with them by postcode
A Modern Mining Company
Shareholder
Value
Government
Value
Community
Value
Employee
Value
Supplier
Value
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
strategY
11
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Going beyond what’s possible to make lives better
Share price and dividends
Grow share price: measured relative to peer group / sustainable dividend (TSR)
Reserve growth
Grow OZL’s Copper Reserves: measured relative to OZL’s Reserve at the end of previous year
All-In Sustaining Costs (AISC)
Bottom half of cost curve: measured relative to global copper producers
Governance
Board effectiveness: Compliance with ASX’s corporate governance
principles and recommendations
Employment by jurisdiction
Workforce – local / state / out of state / Land Connected and Indigenous Peoples
Taxes and royalties
Income tax expense / royalties (total and jurisdictions)
Capital investment
Capital investment
Emissions and energy
Scope 1 & 2 emissions intensity (tCO2-e per t Cu Eq) / Scope 1 & 2 absolute
emissions / net energy intensity (per t Cu Eq) and renewable energy percentage
Local content
Value spent with local suppliers through supply chains
Community engagement
Number and average duration for resolution of concerns, complaints and grievances
Cultural heritage
Unauthorised cultural heritage breaches / signifi cant environmental and social incidents
Social contribution
Quantity and case studies
Partnering
Human rights
Water
Waste
Partnering case studies
Modern Slavery Act action plan Implementation and number of incidents
Water consumed (per t Cu Eq) / water withdrawal in areas of extreme water stress (%)
Non-mineral waste produced (per t Cu Eq)
Land and biodiversity
Area (ha) disturbed in high biodiversity conservation areas
Inclusion
Diversity
Inclusion maturity upward trend
Diversity of thought and demographic
Safety performance
Total Recordable Injury Frequency Rate (TRIFR) and zero fatalities
Workforce engagement
Employee Survey Results above industry benchmark
Net Promoter Score (NPS)
Net Promoter Score (NPS) survey
On time payment
Proportion (number and value) of invoices paid on time within payment terms
(7, 14, 30, 60 and >60 days of invoice date)
Supplier Value by jurisdiction
OZ Minerals expenditure by number of suppliers and value spent with them by postcode
A Modern Mining Company
Shareholder
Value
Government
Value
Community
Value
Employee
Value
Supplier
Value
G L O B A L COPPER
P A R TNERING
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12
PROMINENT
HILL
The Prominent Hill mine
has met or exceeded
copper guidance for
six consecutive years.
The positive findings
of the Prominent Hill
Expansion Study increase
confidence in Prominent
Hill’s longevity and
ongoing performance.
OVERVIEW
Location: 650 km north-west
of Adelaide, 130 km south-east
of Coober Pedy
Product: Copper concentrate
(containing gold and silver)
Mining method: Underground mine
Processing method: Conventional
crushing, grinding and flotation
Mineral Resources: 150 Mt at
0.9% copper and 0.7g/t gold(a)
Ore Reserves: 56 Mt at 0.9% copper
and 0.7g/t gold(a)
(a) Please refer to the Mineral Resources and Ore
Reserves section (page 120) for full disclosure.
Prominent Hill is a well established underground
copper, gold and silver mine located 650 km north-
west of Adelaide in South Australia. Prominent Hill
is currently operating in the lowest cost quartile
globally and has delivered on its annual production
guidance for the past six years.
In 2018, the mine converted from open pit
to underground-only operations and ramped
up to 4 Mtpa in 2020. Plans to increase
production to between 4 and 5 Mtpa by
2022 were announced in August 2020
by accelerating the decline development
towards the bottom of the known reserve
to begin mining simultaneously from the
current and deeper levels. Work started on
the accelerated development activities in
September 2020.
A study is progressing into expanding the
operation further by accessing deeper
inferred resources via a vertical hoisting
shaft. A study update released in November
2020 showed that converting from truck
haulage to a vertical shaft would lower
the operational risks and costs of mining
at depth, be NPV and cashflow positive
compared to the current truck haulage
mining operation and create a platform to
potentially mine deeper mineral resource yet
to be converted to reserve.
The positive economics supported continued
investment in the expansion study with
further infill drilling to be undertaken to
increase resource confidence, and to provide
the basis for a final investment decision
expected in mid 2021.
In 2020 Prominent Hill again met its copper
production guidance. It also met its increased
gold production targets, and its lower C1
cost targets, both of which were improved
mid-COVID-19. In 2020, the team achieved
a negative C1 cost performance of 54.0 c/lb
and All-In Sustaining Costs (AISC) of 14.7 c/lb
assisted by higher gold production and higher
gold by-product credits.
Importantly, we continued to focus on how
we can improve safety, health and wellbeing
outcomes. The TRIFR of 5.63 was lower at
Prominent Hill than last year (8.45). Safety
continues to be a focus for the team into
2021.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT ProMinent hiLL
13
TRANSFORMING
FOR THE FUTURE
The new 270 km transmission line to
Prominent Hill via Carrapateena was
commissioned during the year. It provides
reliable, secure and affordable power
transmission for OZ Minerals’ South
Australian mining assets. The new
transmission line will also support our
future expansion aspirations and will
be available for third party use.
The update on our Prominent Hill Expansion
Study demonstrated that the installation
of a vertical hoisting shaft to replace truck
haulage is technically and economically
feasible, and has the potential to reshape
our future. The shaft would have lower
material handling costs, a higher mine
production rate and enable development of
the deeper zones of the known resource
and potential extensions.
Our understanding of the orebody and the
mining methods to be used, means we
are well positioned to de-risk development
options for this potential expansion.
OUR FOCUS IN 2021 IS TO:
embed our refreshed Critical Risk
Management Safety Program
ramp up underground mining
rates to 4-5 Mtpa
complete the Prominent Hill
Expansion Study
continue the conversion of our inferred
resources to indicated or measured
maintain strong operating discipline
to reliably deliver results in the bottom
half of the cost curve
accelerate our drive to embed the strong
and successful culture of Prominent
Hill in all our community and supplier
partnerships
engage stakeholders in the Prominent Hill
Expansion and our vision for the Asset,
and seek their active participation to
support them.
During the challenging COVID-19-affected
environment of 2020, we:
introduced annual programs to support
health and wellbeing, including mental
health first aid training to raise awareness
and reduce the stigma associated with
mental health issues
partnered with our Employee Assistance
Program provider to introduce Yarning
Circles to provide Indigenous team
members additional access to peer
support during the height of COVID-19
partnered with Inventium to implement
their Workday Reinvention Program for
our workforce, particularly those who
were transitioning to remote work
implemented the Keil Centre Resilience
Program, which helped us understand
and apply effective coping strategies
that build personal resilience.
HIGHLIGHTS FOR 2020
We delivered the targeted 4 Mtpa
mining rate and accelerated decline
development to support increased mining
rates to 4-5 Mtpa from 2022 while
maintaining mine life.
We doubled the size of our underground
resource drilling fleet and completed
15 km of drilling, with results indicating
a continuation of the Malu and Kalaya
mineralisation.
We delivered an update on the
Prominent Hill Expansion Study with
works expected to continue in 2021
with a view of a mid-2021 investment
decision. We began Stage 2 drilling of
the Mount Woods Unearthed Challenge
targets, drawn from some of the more
unconventional approaches from the
2019 Explorer Challenge.
We safely and successfully completed
construction of a new 270 km
transmission line to Prominent Hill
via Carrapateena to enable energy
self-sufficiency for current operations
and all contemplated expansion
options from previous reliance on
Olympic Dam’s power line.
We commissioned and successfully
ramped up the Malu Paste Plant
to nameplate capacity, to enable
underground performance.
We transitioned mining into the eastern
lenses of the Malu underground deposit
and opened additional mining fronts.
We upgraded the remote surface
telemetry systems for the underground
mining fleet, with associated productivity
increases.
CLOSING THE LOOP
ON FOOD WASTE –
PROMINENT HILL
For the last two years, we have used the
BioBin© waste management system to
capture food waste from the camp mess
and kitchen. Instead of going to landfill,
this waste is processed to become mulch
and potting mix.
This year, we were able to close the loop
and used this potting mix in a series of
wicking beds that have been installed along
one of the camp’s main walkways. The
plants for the wicking bed were selected in
consultation with science students from the
Coober Pedy Area School, who chose local
plants with medicinal or bush food uses.
Information plaques have been designed by
the students and installed to provide some
local traditional knowledge to camp users.
14
2020 annUaL & sUstainaBiLit Y rePort
CARRAPATEENA
Carrapateena is a
4.25 Mtpa underground
sub-level cave mine, with
an estimated mine life of
20 years. Carrapateena is
located in a region highly
prospective for additional
resources, with known
mineralisation at nearby
Khamsin.
OVERVIEW
Location: 250 km south-east of Prominent
Hill, 160 km north of the regional centre
of Port Augusta, in South Australia
Product: Copper concentrate
(containing gold and silver)
Mine life: ~20 years
Mining method:
Underground – sub-level caving
Processing method: Conventional
crushing, grinding and flotation
Mineral Resources: 950 Mt at
0.57% copper and 0.25g/t gold(a)
Ore Reserves: 220 Mt at
1.1% copper and 0.45g/t gold(a)
(a) Please refer to the Mineral Resources and Ore
Reserves section (page 120) for full disclosure.
Carrapateena is located in the highly prospective
Gawler Craton in South Australia, approximately
250 km from the Prominent Hill mine. It is an
iron–oxide–copper–gold (IOCG) underground
mine that first produced concentrate in December
2019 and has since ramped up to the designed
steady state production rate of 4.25 Mtpa.
Carrapateena was officially opened in
2020 by South Australian Premier, Steven
Marshall, and the Minister for Energy
and Mining, Dan van Holst Pellekaan.
A small number of stakeholders joined
the ceremony onsite and a much larger
group of stakeholders joined in real time
online, as COVID-19 travel and physical
distancing restrictions were in place.
The biggest mining project in South Australia
in the last decade, Carrapateena produced
27,632 tonnes of copper and 53,089 ounces
of gold during the year and met copper
and gold production and cost guidance
for 2020.
In 2020, Carrapateena achieved a C1
cost performance of 77.8 c/lb and AISC
of 122.0 c/lb in its ramp up year.
We continue to focus on ensuring the safety
and wellbeing of our people on site through
training and hazard management. Through
this work we have reduced the site’s TRIFR
from 7.24 in 2019 to 6.67 in 2020.
OZ MINERALS CarraPateena
15
We withdrew from the Maslins JV with
Investigator Resources during the year, as
the project failed to intersect any significant
mineralisation. The Maslins prospect was
located on the Stuart Shelf approximately
55 km south of Carrapateena.
OUR FOCUS IN 2021 IS TO:
continue Carrapateena expansion studies
and update the Life of Province Plan,
furthering our province approach
begin Carrapateena Block Cave early
works in Q4
continue construction of the Western
Access Road
complete and commission the tailings
pump upgrade project. This will provide
critical duty/standby functionality of
the tails disposal system and increase
pumping capacity to support milling
rates up to 5 Mtpa
continue to improve and optimise
the processing plant to increase
throughput and recoveries
continue to improve our understanding
of the orebody, with drilling programs
scheduled to update the ore reserves
explore additional revenue stream
opportunities through ongoing studies,
to extract maximum value from all
metals and minerals in the ore body
start construction of phase two of
the materials handling system and
underground mining infrastructure
prepare for the second lift of our
tailings storage facility
explore opportunities for automation
and electrification of mining equipment.
CARRAPATEENA BLOCK
CAVE EXPANSION
We completed the Carrapateena Block Cave
Expansion PFS in 2020, and it demonstrated
that converting the lower portion of the
current sub-level cave to a series of block
caves could significantly increase value, ore
reserves and mine life.
This expansion would unlock Carrapateena’s
potential to be a multi-generational,
lowest quartile cash cost producing
province, bringing long-term value to our
Stakeholders. Stage 1 of the Block Cave
Expansion Feasibility Study is underway and
is expected to be completed in late 2021.
LIFE OF PROVINCE PLAN
We also released the Carrapateena Life of
Province Plan Scoping Study during the year,
which considered the future potential of
resource extensions, satellite deposits and
exploration targets, including Carrapateena,
Fremantle Doctor, The Saddle, and Khamsin;
known collectively as the Carrapateena
Province.
The Life of Province Plan Scoping Study
showed that Block Cave 1 and Block Cave 2
unlock the broader Carrapateena Province
potential, including realisation of lower
grade resources around Carrapateena and
at Fremantle Doctor. The Life of Province
Plan is a material opportunity to further
unlock the Carrapateena Province for many
decades after Block Cave 2 and provide
the region with the potential for a multi-
generational mine.
HIGHLIGHTS FOR 2020
We achieved mine nameplate run rate
six months earlier than planned and the
cave continued to propagate as planned
into the Upper Whyalla Sandstone.
We released the Carrapateena Block Cave
Expansion PFS and the Life of Province
Scoping Study, showing that the block
cave expansion will unlock the potential
of the broader Carrapateena Province.
We successfully completed the first major
mill shutdown and relining without
incident or injury and ahead of schedule.
We completed the cleaner circuit project
and are awaiting final tie-ins.
We commissioned the Jameson Cell
steelwork, which will increase concentrate
grade and quality.
We commissioned the underground
crusher and materials handling system
and both are operating to design
expectations.
We began early works on the Western
Access Road, following pastoralist and
Traditional Owner consultation. Our land-
connected stakeholders played an integral
role in determining the best alignment for
a safe, all-weather, fit-for-purpose road
that will reduce pastoral interactions and
avoid cultural heritage sites.
HYBRID ENERGY PLANT
Mining consumes lots of energy, so
variability, uncertainty and complexity of
energy supply needs to be well managed.
Our hybrid energy plant is a unique facility
located at Carrapateena that is designed
to host experiments on how various
equipment and energy technologies
interact on an operating mine site.
Our hybrid energy plant serves as a ‘living
lab’ to attract global organisations into
South Australia, who wish to test their
research at an operational mine. The ability
to do this work remotely also makes the
option more accessible to collaborators
from across the globe.
The hybrid energy plant’s initial setup
includes solar PV, battery storage, diesel
generation and a micro-grid controller.
Additional generation and demand can
be integrated for testing.
ENERGY AND MINING
COLLABORATION
In 2018, OZ Minerals established the
Energy and Mining Collaboration (EMC)
by bringing together a group of individuals
interested in the challenge of maximising
the use of renewable energy on a mine
site. Members of the initiative included
Adelaide University, CSIRO, the Department
for Energy and Mining, the Rocky Mountain
Institute, SunSHIFT and the Tonsley
Innovation Precinct. Together, this group
has an extended global reach in terms of
understanding current and future trends
in low emissions technologies.
The purpose of the collaboration was to
understand how a diverse group of people
could work together to approach this
challenge. We know that to achieve real
breakthroughs, we need to think about,
and design mines, very differently and
collaborate widely.
The group was able to work together to
understand and highlight the challenges
and opportunities of multi-stakeholder
collaborations. Open and honest
conversations enabled members to gain
valuable insights into the benefits of this
way of working, with new relationships
created and several spin-off opportunities
being explored. This way of working has
been recognised by other groups as being
valuable and we are currently exploring
this approach with METSIgnited to
facilitate supplier clusters.
Importantly, what we have learnt through
this collaboration has been instrumental
to the development of frameworks and
establishment of the new OZ Minerals
discovery-driven-incubator called Think and
Act Differently. The EMC will continue to
contribute to a low emission future through
the Energy and Emissions accelerator
program of the incubator.
16
2020 annUaL & sUstainaBiLit Y rePort
WEST
MUSGRAVE
The West Musgrave Project is a major copper–nickel
sulphide deposit located in the Musgrave Province of
Western Australia, approximately 1,300 km north-east
of Perth. It includes the Nebo-Babel copper–nickel
and Succoth copper deposits and is currently at
advanced study stage.
OZ Minerals now owns 100 per cent of the
West Musgrave Project after the successful
friendly acquisition of former joint venture
partner, Cassini Resources, in October 2020.
The acquisition gives us more flexibility
around future development and funding
options.
A LOW CARBON, LONG LIFE,
LOW COST MINE
During the year, we advanced the project
significantly, producing a PFS in February
2020 and an updated PFS in December
2020. Both studies were based on a long-
life, large scale open cut mine producing
separate nickel and copper sulphide
concentrates. In the updated PFS, the
processing plant throughput was increased
from 10 Mtpa to 12 Mtpa over the same
26 years, which resulted in an improvement
to key project metrics with a net present
value now at ~$1 billion and a life of
mine undiscounted cashflow in excess of
$4 billion. This project has the potential
to be the first development opportunity
within the broader Musgrave Province,
which includes several additional, highly
prospective opportunities.
West Musgrave is a greenfield site, where
the existing infrastructure is only sufficient
for exploration and field work.
Additional infrastructure will be required
to support future mining activities and
we included the following in our PFS:
design and costing of site access
site development and major civil
infrastructure
an aerodrome
450 person village
a hybrid solar–wind–diesel battery
solution
water supply, control systems,
onsite services
a full suite of facilities to enable efficient
construction, mining and ore processing.
To protect the health and welfare of
our remote community during the early
COVID-19 period and following subsequent
restrictions to Ngaanyatjarra Lands imposed
by the Western Australian Government, we
paused work at the site in early 2020.
OZ Minerals is
aiming to establish
the West Musgrave
Project as a scalable,
low cost, long life, open
pit mining operation.
OVERVIEW
Location: Western Australia,
near the South Australia and
Northern Territory border
Product: Copper and nickel
Status: In advanced study phase
with final investment decision
expected in 2022
Province exploration program:
One Tree Hill prospect and the
Succoth deposit
OZ MINERALS West MUsgra Ve
17
We sought to crowdsource new solutions,
systems and approaches to accelerate
how West Musgrave may become a
100 per cent renewable-powered
mine. The Capture the Spark challenge
helped us identify potential partners
and pathways.
We received stakeholders’ endorsement
of our EPA Part IV submission.
OUR FOCUS IN 2021 IS TO:
gain EPA Part IV and Part V approval
progress the project to the next study
stage
negotiate a mining agreement with
the Ngaanyatjarra Group
trial a fit-for-purpose power generation
solution and, if successful, incorporate
it into the West Musgrave Project plan.
We only resumed activities on site when
restrictions eased, and after the Traditional
Owners, stakeholders and our team agreed
it was safe to return. This return to site
enabled us to consult with the Ngaanyatjarra
people on our Environmental Protection
Authority (EPA) Part IV referral and include
their feedback in the submission.
This submission to the EPA represents the
first primary approval to be sought from
the Western Australian Government. In
addition, planning and discussions with
the Ngaanyatjarra Group are ongoing with
a view to developing a mining agreement
and progress to the next study phase.
HIGHLIGHTS FOR 2020
We acquired Cassini Resources.
We released the West Musgrave PFS
that demonstrated a long life ~26-year
open pit copper and nickel sulphide
mine with bottom quartile cash costs
and an average concentrate production
of 28,000 tonnes per annum copper and
22,000 tonnes per annum nickel.
We released a PFS update which saw
the processing plant increase throughput
to 12 Mtpa and improvements to key
project metrics while maintaining the
26-year mine life.
We further investigated our innovative
off-grid renewable power and processing
solutions, underpinned by up to
80 per cent renewable electricity
generation from solar and wind.
CAPTURE THE SPARK
CHALLENGE
This year we partnered with Unearthed,
an energy and resources open innovation
platform, to create the Capture the
Spark challenge – where the largest
community of startups, developers and
data scientists helped to fast track our
plans for a 100 per cent renewable
powered West Musgrave Project.
The project already has strong sustainability
credentials. The copper and nickel to be
mined is critical to the low-carbon economy
and the project has some 70–80 per cent
of power generated through renewable
sources including solar and wind.
149 participants from 25 countries
participated in the challenge, and we
received a total of 31 submissions!
We’re now bringing these ideas to life in
partnership with the winning companies
and co-creating a fit-for-purpose solution.
This will be trialled at an OZ Minerals site
where, if successful, it will be incorporated
within the West Musgrave Project plan.
18
2020 annUaL & sUstainaBiLit Y rePort
CARAJAS
ANTAS OVERVIEW
Location: Carajás Province in the state
of Pará in northern Brazil, 25 km
south-east of Parauapebas
Product: Copper concentrate
(containing gold)
Mining method: Open pit, drill and blast
Processing method: Ore sorting,
conventional crushing, grinding,
flotation and filtration
Mineral resources: 1.9 Mt at
0.7% copper and 0.2 g/t gold(a)
Ore reserve: 0.6 Mt at 0.9% copper
and 0.4 g/t gold(a)
PEDRA BRANCA
OVERVIEW
Location: Carajás Province in the state of
Pará, northern Brazil, ~100 km south of
Parauapebas and 30 km east of Canaã
Project: High grade copper–gold
underground mine
Status: Construction phase, first
development ore and concentrate
parcel delivered
Proposed method: Underground
open-stoping
(a) Please refer to the Mineral Resources and Ore
Reserves section (page 120) for full disclosure.
The Carajás region, in the State of Pará in Brazil, is
host to a number of large copper–gold mines, and is
one of the world’s premier IOCG mineral provinces.
We are pursuing a hub approach to our
activities in the Carajás whereby a number
of relatively modest satellite mines produce
ore which is then trucked to a central
processing site. The first Hub is at Carajás
East, where the open pit mine at Antas
is drawing to the end of its life and the
existing processing plant will continue to
be used to process ore from new satellite
mines. The first new satellite mine is the
underground mine at Pedra Branca that is
under construction, with first development
ore produced in mid-2020.
Potential additional high-grade copper–gold
satellite mines are being explored at Santa
Lúcia and Clovis. A second potential hub has
been identified at Pantera, which is another
of our projects in the west of the Carajás.
Santa Lúcia is one of two earn-in
agreements we have with Vale S.A. for
exploration projects in Carajás East. Santa
Lúcia is approximately 40 km trucking
distance from Antas; and the less advanced
but highly prospective Circular North which
is proximate to Antas.
OZ MINERALS CaraJÁs
19
Pantera Project
Stand Alone (24-39)
Pedra Branca
Mine (20-28)
2 5 k m
Sossego
Vale Mine
Plant
oVerVieW of CaraJÁs ProVinCe
hUBs and aCtUaL and PotentiaL
sateLLite Mines
Santa Lucia
Mine (24-30)
4
5 k
m
Antas
Mine (20-21)
Future TSF (22-29)
Antas
TSF (20-22)
ROM PAD
Antas
Clóvis
Clóvis
Mine (22-26)
7 5 k m
1 8 0 k m
1.8 k m
Vale Copper
Terminal
5 0 k m
EFC Vale
Santa
Lucia
Pedra
Branca
Plant
CKS HUB
Vila do Conde
Terminal
~800 km
Ponta da Madeira
Terminal
The Carajás East Hub produced
8,613 tonnes of copper and 6,312 ounces
of gold to meet its annual production
guidance in 2020.
The Carajás East Hub achieved a C1
cost performance of 95.4 c/lb and
AISC of 149.4 c/lb.
At Pedra Branca, milestones were met
with first developmental ore processed
into concentrate at the Carajás East Hub
and concentrate delivered for export using
Vale’s logistics network to realise
operational and cost efficiencies.
Ore sorting equipment was installed and
commissioned at Antas during the year to
determine the optimal mass versus grade
ratio for the sorter and for processing. This
equipment will relocate to Pedra Branca
once trials are complete.
Our Brazilian operations have not
experienced major disruptions due to
COVID-19.
We implemented many response measures
to protect the health and wellbeing of our
people. All non-essential frontline teams
began working from home while social
distancing, and health screening and fever
monitoring programs were implemented
for incoming site teams. We developed
processes for contact and environment
tracing as well as testing, self-isolation
and quarantine systems and shifted the
focus of our Health and Wellbeing
program to COVID-19 related issues,
including mental health.
Decline development and the
implementation of facilities at Pedra Branca
commenced, resulting in a significant
increase in the number of employees and
contractors. A corresponding increase was
reflected in the TRIFR at Carajás of 4.08,
which is higher than the previous year
(1.34).
HIGHLIGHTS FOR 2020
We implemented a COVID-19
management plan to minimise the
risk to our people, visitors, sites and
broader community.
The Carajás Hub at Antas received its
first developmental ore from Pedra Branca
for processing.
We began the first phase of the
strategic Vale–OZ Minerals Cooperation
Agreement.
We installed and commissioned ore
sorting equipment at Antas and trials
began to help determine the optimal
mass versus grade ratio.
We conducted resource drilling programs
at Pantera and Santa Lúcia, with
encouraging results from Santa Lúcia.
We completed eight diamond drill holes
(~900 m) south of the Antas mine at the
Paes Carvalho prospect. Results included
a 15 m zone of strongly altered volcanics
hosting chalcopyrite and pyrrhotite.
We received geophysical results from
Estrella and numerous prospects within
the Paes Carvalho prospect.
Through our Stakeholder Support Program,
we also funded a robust program to support
the communities where we operate in Brazil
which were impacted by the pandemic.
Resource drilling programs began later in the
year at Pantera and Santa Lúcia after careful
planning so that we could safely operate in
a COVID-19 environment. Encouraging early
results were seen from drilling at both Paes
Carvalho and Santa Lúcia. We also signed
a joint venture-type asset agreement with
Vale and developed a go-forward plan to
progress various government interactions.
OUR FOCUS IN 2021 IS TO:
complete construction and operational
ramp up at Pedra Branca
continue to develop the Carajás East
Hub using the Antas processing plant
begin the resource definition drill
program at the Clovis deposit
maintain processing plant
performance at Antas
begin preparations to use the
de-commissioned Antas pit as
a tailings storage facility.
SUPPORTING OUR
COMMUNITIES
COVID-19
We are active members of the communities
in which we operate, including the cities
of Água Azul do Norte, Canaã dos Carajás,
Curionópolis, Ourilândia do Norte and
Parauapebas.
At the start of the pandemic, we supported
these communities with materials and
equipment and assembled over 7,000 rapid
tests. We also donated medicine as well as
personal protection equipment, hygiene and
cleaning items to our communities.
Education
In partnership with the professional training
school Senai, we held courses for the
Professional Qualification Program, which
has been running since 2017, and trained
40 people in the Curionópolis municipality.
57 people also received their certificates
of completion for the Project Development
and Fundraising Course, which took place
from September to November this year. The
Course is a joint initiative of OZ Minerals
and the municipality of Água Azul do
Norte, in the state of Pará and is aimed
at providing continuous and free training
for people working in the social, sports,
education, tourism and culture sectors. In
addition, we are working towards offering
training in mine mechanics and operation
at Vila Canadá in Água Azul do Norte.
20
GURUPI
CENTROGOLD
OVERVIEW
Location: Gurupi region, in the state of
Maranhão in northern Brazil, between
the cities of Belém and São Luis and close
to existing infrastructure including sealed
roads, power, water and skilled labour
Status: Awaiting injunction removal
to begin feasibility study
Project: Open pit gold project
Proposed method: Open pit mine,
flotation and carbon-in-leach
processing plant
Mineral Resource: 28 Mt at 1.9 g/t gold
(excludes Chega Tudo deposit)(a)
Ore Reserve: 20 Mt at 1.7 g/t gold(a)
Mine life: ~10 years
Estimated annual production:
100,000–120,000 oz gold(a)
(a) Please refer to the Mineral Resources and Ore
Reserves section (page 120) for full disclosure.
The Gurupi Province is in
the state of Maranhão in
northern Brazil, between
the cities of Belém and
São Luis. Our CentroGold
project is located in this
province, close to existing
infrastructure. It is one of
the largest undeveloped
gold projects in Brazil,
with three main deposits:
Blanket; Contact; and
Chega Tudo.
The surrounding CentroGold area is
considered to host exciting exploration
potential. Interpretation of a vast database
of historical information, including
geophysical, soil geochemistry and drilling
also suggests potential associated with
the proximal Cipoeiro deposit and eight
other known targets including Mandiocal,
Sequeiro (CentroGold Project) and Mina
Nova, Vai-e-Volta and Caramujinho
(Jibóia Project).
CENTROGOLD
CentroGold’s PFS indicated that a circa
10-year operation could be developed for
low capital investment with industry bottom
half operating costs. Gold production was
estimated at 190,000–210,000 ounces
per year for the first two years and
100,000–120,000 ounces per year on
average for the life of the mine.
CentroGold has the potential to
become a Gurupi processing hub, servicing
nearby deposits such as Chega Tudo and
Mandiocal, should future drilling and
studies prove them viable.
This year we continued our focus on
working to lift the historical injunction
placed on developing the CentroGold
project. A Federal Court judge granted
the injunction in 2013 against the then
tenement holder citing irregularities in
the grant of the environmental licence.
We have been working to gain approval
for the CentroGold development and
relocation plan through ongoing discussions
with INCRA (the Colonization and Rural
Reform Institute) Brazilia after the local
INCRA provided their support last year.
Central INCRA approval has now been
granted enabling the development and
relocation plan to be submitted to the
Brazilian Courts to enable them to lift
the injunction on the project.
In parallel to this process, we have worked
to gain approval for the CentroGold
environmental update studies with SEMA-
MA (the Environmental State Agency of
the Maranhão state).
COVID-19 constraints have slowed
progress in both areas throughout the
year, as the regulator suspended its
administrative activities for 60 days in
response to the pandemic. Planning
and preparatory work continued so the
application could progress when the
regulator resumed administrative activities.
We are currently updating the CentroGold
Pre-Feasibility Resource, Reserve and
Study to include all previous drilling. Once
complete, the next phase of study for the
CentroGold project and further regional
exploration are anticipated to begin when
the injunction over the project is removed.
HIGHLIGHTS FOR 2020
We developed and ran a successful
COVID-19 management and control plan.
INCRA’s technical team issued a report
recommending that authorisation to
re-establish our environmental license
be granted.
INCRA Brazilia granted their approval
for the relocation plan.
We progressed updating environmental
studies in line with the new project
design.
We conducted trenching and sampling
of six targets at Sequeiro, Faixa and other
targets in Jiboia.
We mapped, sampled and augured
numerous early stage prospects
throughout the region.
OUR FOCUS IN 2021 IS TO:
continue efforts to lift the judicial
injunction following INCRA approval of
the relocation plan in December 2020
complete environmental update studies
and relocation plan studies
achieve grant of the installation licensing
implement the relocation plan
continue our regional exploration program
begin an expanded drilling program
over the CentroGold project and ranked
exploration targets
update the Mineral Resource and
Ore Reserve to support the Definitive
Feasibility Study metrics
progress the next study phase of the
project.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 21
2222
EXPLORATION
AND GROWTH
We are a growth-
oriented company and
exploration is central
to our growth strategy.
Exploration projects
allow us to advance
our strong pipeline of
opportunities and are key
to creating value for our
Stakeholders.
We hold many exploration projects at
different stages of maturity, which gives
us options for how we grow, with capital
being allocated to the most value-accretive
projects assessed across our five stakeholder
pillars. We have a mix of different projects
like the more mature opportunities from the
Carrapateena and Prominent Hill expansion
projects and longer-dated, lower maturity
ones at a more exploratory stage such as
Pantera and Paraiso.
We have multiple exploration earn-in
agreements in place with highly respected
explorers who offer exploration expertise
in specific geologies or locations, as well as
our own exploration programs. In turn, our
exploration partners gain access to capital
from us and our more agile approach to
decision making and execution, to support
drilling and development programs. We
typically work with our partners to oversee
projects, in particular, the technical program
and stakeholder engagement, while they
manage on the ground activities.
COVID-19 saw us temporarily restrict
exploration drilling in 2020 to protect the
health of our people and communities.
Much of our exploration work is undertaken
in regional and remote communities, who
are among the most vulnerable. When
conditions eased, we progressively started
exploration drilling under strict safety
management plans and in accordance with
the restrictions of the different jurisdictions.
During the year we entered into two new
earn-in agreements.
We withdrew from the Maslins joint venture
with Investigator Resources in South
Australia, where the stage one drill program
on the Maslins prospect, located on the
Stuart Shelf approximately 55 km south
of Carrapateena, was completed. We also
withdrew from the Nullabor project within
our multi-site exploration alliance with Red
Metal Limited after drilling failed to find
evidence of IOCG mineralisation.
EXPLORATION PORTFOLIO
Mt Woods
Continuing to push the boundaries of
exploration the company completed five
holes during the year, for ~2,000 m,
testing some of the unconventional targets
generated by the Unearthed Challenge.
Targeting methodologies included using
geophysical software associated with the
oil and gas industry, data science near miss
algorithms and 3D seismic interpretations.
Information generated in this phase of
drilling will be utilised to generate/validate
drill targets for the 2021 field program.
Eloise joint venture
with Minotaur Exploration
In December 2015, we entered into a
binding Heads of Agreement with Minotaur
Exploration for the Eloise Project, located
near Cloncurry, Queensland.
The Cloncurry Mineral District contains
strong mineral endowment in a variety
of commodities, including copper–gold
(Ernest Henry, Eloise, Osborne and Mount
Elliot/Swan deposits) and zinc–lead–silver
(Cannington, Pegmont). The geology of the
tenements indicates excellent prospectivity
for high-grade Eloise-style copper–gold and
Cannington-style zinc–lead–silver deposits.
Minotaur Exploration collected
electromagnetic (EM) data at Eloise and
identified two significant anomalies, named
Little Foot and Big Foot. The prospects are
located along strike of previously identified
copper and gold mineralisation at the Electra
and Iris prospects. The Seer, Little Foot, and
Big Foot targets were tested and minor
intervals of visible sulphide mineralisation
were encountered on all prospects.
Jericho joint venture with
Minotaur Exploration
We have an 80 per cent beneficial
interest in the Jericho project undertaken
with Minotaur Exploration. The 2020
field program began with a ground
electromagnetic survey focused on targets
north-east of the Iris/Electra prospects.
More than 28 line kilometres of data were
acquired over 10 lines (on 400 m and 800 m
apart) before the program was suspended
due to COVID-19.
Minotaur Exploration published the maiden
resource for the Jericho project early in July.
However, we have determined the present
resource is not viable as a standalone
underground mining operation. Exploration
efforts will now focus on other high priority
targets within the tenure.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS exPL oration and groWth
23
Multi-site exploration alliance
with Red Metal Limited
This alliance gives OZ Minerals a two-year
option to fund a series of mutually agreed,
proof-of-concept work programs on Red
Metal’s early-stage projects, which include:
Yarrie for copper–gold and copper
–cobalt in Western Australia
Gulf for copper–gold in Queensland
Three Ways for zinc–lead–silver
in Queensland
Lawn Hill for zinc–lead–silver
in Queensland
Mount Skipper for zinc–lead–silver
–copper in Queensland.
Red Metal Exploration Alliance completed
drilling of one hole at the Mt Skipper project
and two holes at the Three Ways project.
Mt Skipper returned no visually significant
intersections and minor vein-hosted and
disseminated chalcopyrite was encountered
at Three Ways. Drill rigs have demobilised
from both projects and magnetotelluric (MT)
surveying is currently underway at Lawn Hill.
One diamond drill hole (666.3 m) was
completed on the Nullarbor Plain. No
evidence of an IOCG mineralising system
was detected and we subsequently
withdrew from the agreement.
Lannavaara with Mineral
Prospektering i Sverige AB
We entered into an agreement in 2018
with private explorer Mineral Prospektering
i Sverige (MPS) to explore for IOCG
mineralisation in the Norrbotten district
of northern Sweden.
Historic exploration on the leases by
previous explorers intersected a copper and
zinc skarn system on the Huornaisenvuoma
prospect in the south-west of the license
and they also defined two small magnetite-
hosted iron occurrences, Kevus and Teltaja.
Subsequent gravity and EM surveying by the
Swedish Geologic Survey (SGU) revealed a
continuous, 3.8 km long, untested gravity
anomaly between Kevus and Teltaja with a
coincident EM response.
Late in the quarter Mineral Prospektering
i Sverige commenced a winter drilling
program at the Lannavarra project in
Sweden. Two holes were completed for
315 m before breaking for the festive
period and drilling recommenced in
early January 2021.
Painirova project with Mineral
Prospektering i Sverige AB
Painirova is located between the Mertainen
iron–oxide–apatite deposit and the active
Leveäniemi mine at Svappavaara in Sweden’s
most prolific mining belt. On the back
of airborne electromagnetic (AEM) data
collected over the tenement (2019) we
elected to proceed with the project into
2020 and have committed to drilling a
number of high ranked targets.
Paraiso with private Peruvian
company Inversiones Mineras
La Chalina S.A.C.
We entered into an earn-in agreement
in 2018 with private Peruvian company
Inversiones Mineras La Chalina S.A.C. to
explore for IOCG deposits in the Arequipa
district of southern coastal Peru. At the
Esmeralda target zone, surface copper oxide
mineralisation has been traced over a strike
length of 400 m. At the Casper target a
400 m by 300 m copper-in-soil anomaly has
been outlined by previous explorers. Neither
target has been drill-tested. The initial work
program is planned to include geological
mapping, rock chip and soil sampling,
ground geophysics and an airborne
magnetic survey.
Brazil – Carajás Exploration
We have an extensive portfolio of
exploration projects centred around our
operating copper mines, Antas and Pedra
Branca. Although the field program in Brazil
was significantly impacted by the COVID-19
pandemic, 17 holes were completed during
the year. The exploration team successfully
completed drill programs on the Gueroba,
Tapuia, Campo Grande and the Canaã West
targets. Encouraging results were returned
from both Gueroba and Canaã West, areas
identified for further work.
Brazil – Pantera
Pantera is a high-grade copper–gold
exploration project covering approximately
100 km2 in the western part of the Carajás.
Drilling, with more than 4,200 m completed,
was undertaken in 2020 with the aim of
identifying a maiden JORC Mineral Resource.
Brazil – Santa Lúcia
The Santa Lúcia project is a small high
grade copper–gold deposit located south
of the Antas mine in the Carajás. Acquired
from Vale in 2019, the project team has
focused on infilling the existing drilling
and has completed over 40 holes for
more than 5,700 m. The team is working
towards delivering a maiden resource
estimate in 2021.
THE POWER
OF THE CROWD
We believe that great innovations can
be unleashed when industries and
people come together and collaborate.
Crowdsourcing and collaboration are great
ways for us to build business capability and
challenge the status quo while working to
solve some of our most complex problems
in exploration and growth.
We have applied this to our exploration
approaches, starting with the Explorer
Challenge in 2018. In 2020, we took
this approach further, to expand our
exploration toolkit.
Drillanthropy
Drillanthropy is an initiative aimed at
science-driven exploration across South
Australia more broadly. Drillanthropy
provides funding for tenement holders to
drill test artificial intelligence and machine
learning generated targets and models
on their tenements. With a successful
discovery, tenement holders could
secure a partnership with us.
Data-driven exploration models have been
multiplying across South Australia as a
direct result of the Explorer Challenge,
the SA Government’s Gawler Challenge,
and renewed interest in machine learning
across the mining industry.
Drillanthropy is our way of connecting
these new ideas to the funding needed
to test them.
Copa de Cobre
Our Copa de Cobre Challenge sought
to define new search spaces for copper
exploration in Peru by generating a
data-driven domain map of Peru using
satellite data, and supplements our
existing exploration strategy in-country.
A significant amount of country-scale
satellite data was collected and made
publicly available. Participants in the Copa
de Cobre Challenge then used the data
and applied machine learning to generate
feature maps that highlight geological
patterns, which could then be used for
exploration and identifying new regions
in Peru that potentially host copper
deposits. This challenge was truly global
with winners of the Challenge coming from
France, South Korea, USA, Brazil, and Russia.
2424
GOVERNANCE
Our governance
framework, supported
by a healthy corporate
culture, helps us to
deliver on our Strategy
and enables us to
control risks and assure
compliance.
MANAGEMENT STRUCTURE
Our management structure, The OZWay,
our Value Creation Policies and Stakeholder
Value Creation Metrics, together with our
Global Performance and Process Standards,
provide clear accountabilities, lean business
processes and focused reporting to enable
our activities to be carried out in accordance
with our risk appetite and Strategy and
are conducted in an integrated financially,
environmentally and socially responsible way.
Our Board has adopted the recommended
corporate governance practices set out in
the ASX Corporate Governance Council
Principles and Recommendations. We
have reviewed our governance practices
against the fourth edition of the ASX
Recommendations which commenced on
1 January 2020 and our current practices
align with the recommendations.
Our Board oversees the management of
the Company. Our Board has adopted
a Board Charter that sets out its roles
and responsibilities, including 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. Our
Board also ensures that specific authority
and responsibilities have been delegated
to the Company’s CEO and that the overall
Strategy is aimed at delivering value for
our five Stakeholder groups – shareholders,
employees, communities, governments
and suppliers.
Our 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. Our Board
has a unitary structure.
All Non-executive Directors, including the
Chairman, are independent. The proportion
of women on our Board is 33 per cent.
Three standing committees assist our
Board to discharge its responsibilities:
Audit Committee – assists the Board with
oversight of the risks insofar as they relate
to financial, reporting and audit matters,
including monitoring whether Management
is communicating the importance of internal
control and management of risk throughout
the organisation and therefore establishing
an appropriate ‘control culture’.
People & Remuneration Committee –
assists the Board in the effective discharge
of its responsibilities as they relate to people
and remuneration including oversight
of risk related to people performance
management, company culture, succession
planning, capacity and capability, and
diversity and inclusion.
Sustainability Committee – assists the
Board in the effective discharge of its
responsibilities as they relate to sustainability
primarily in the areas of safety, health,
environment and community and oversight
of the risks relating to those issues.
This includes threats and opportunities
associated with climate change, cultural
heritage, human rights including modern
slavery, sovereign jurisdictions, compliance
with legislation, regulation, and any
litigation activities.
MANAGEMENT TEAM
Management is responsible for
implementing management systems
across the business.
They are also responsible for assuring
the application and effectiveness of these
systems through OZ Minerals’ four lines of
defence Audit and Assurance Governance
Framework. Training and competency are
part of the continuous improvement process
and are detailed in the Global Performance
Standards.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS goVernanCe
25
MANAGEMENT
STRUCTURE
Board of Directors
Rebecca McGrath
Chairman and Independent
Non-executive Director
Peter Wasow
Independent
Non-executive Director
Board Committees
Andrew Cole
Managing Director and
Chief Executive Officer
Tonianne Dwyer
Independent
Non-executive Director
Charles Sartain
Independent
Non-executive Director
Richard Seville
Independent
Non-executive Director
Audit
Committee
People & Remuneration
Committee
Sustainability
Committee
Executive Leadership Team
Andrew Cole
Warrick Ranson
Mark Irwin
Kerrina Chadwick
Tania Davey
Managing Director and
Chief Executive Officer
Chief Financial
Officer
Chief Commercial
Officer
Chief Corporate
Affairs Officer
Chief Transformation
Officer
Fiona Blakely
Myles Johnston
Gabrielle Iwanow
Steven McClare(a)
Carlos Gonzalez
Jeã Silva(b)
Chief People
Officer
General Manager
Carrapateena
General Manager
Prominent Hill
Acting Chief
Australian Operations
Chief Executive
Brazil
General Manager
Carajás
Asset and Corporate Function Leads
Employees
SUPPORTING DOCUMENTS
ozminerals.com/about/corporate-governance/
Corporate Governance Statement
Value Creation Policies and supporting
Stakeholder Value Creation Metrics, Global
Performance and Process Standards
Board and Committee Charters
Company Constitution
Code of Conduct
(a) Steven McClare was Chief Technical Officer from
12 February 2020 until 1 December 2020 and continues
as Acting Australian Chief Operations Officer from
1 December 2020.
(b) Jeã Silva commenced as a member of the Executive
Leadership Team on 1 December 2020.
26
GOVERNANCE
FRAMEWORK
OUR ENABLERS
Underpinning our Policies are our Global
Performance Standards. The Global
Performance Standards are grouped into
four categories – safety, environment, health
and wellbeing, and social performance.
They set out the minimum mandatory
control requirements and accountabilities
to manage risks, comply with the law,
design operating systems with devolved
accountability and provide criteria for
measuring value creation performance.
The Global Performance Standards are used
to audit Asset performance and set the
minimum standards for any new Assets.
They are provided to contractors and
partners to outline what we expect when
working at an OZ Minerals Asset. These
documents are designed so that Assets,
contractors or partners can use or develop
their own business standards and processes
to meet our Standards, in keeping with
our lean, global devolved business model.
Our Global Process Standards and
associated Specifications enable us to work
effectively within this model by defining
the accountabilities and authorities of our
Board, CEO, Executive Leads and Leads of
the Corporate Functions and Assets relating
to key business processes and management
activities that are unique to us. The Global
Process Standards are internal documents.
OUR PERFORMANCE
Internal and external audits
Risk management, audit and assurance
underpin the Global Process and
Performance Standards as critical elements
of our Audit and Assurance Governance
Framework.
We conduct regular audits and assurance
reviews commensurate with our risk
profile as part of our Four Lines of
Defence approach to systematically and
objectively verify our compliance with
Global Performance and Process Standard
accountabilities and legal requirements. We
apply learnings from audit and assurance
reviews to continuously improve our safety,
health and wellbeing, along with our
environmental and social performance.
Our governance framework enables
lean business processes that drive clear
accountabilities and create room for
innovation. It is explained through
The OZWay. The OZWay model includes
our Purpose, desire to be a modern mining
company and Strategy to create value for
our Stakeholders.
OUR CONTEXT
As a modern mining company, with a
focus on global copper, we are agile to
the changes in our macro environment
and we listen and act on our stakeholder
expectations. All corporate and asset
documents comply with the laws and
regulations of the jurisdiction in which
each Asset operates.
OUR CHOICES
We have a global devolved operating model,
ensuring our Assets are autonomous and
accountable. We focus on what matters,
and set processes that create value, embrace
the global devolved model and provide
clarity for Assets, partners, suppliers and
employees of OZ Minerals.
Our How We Work Together (HWWT)
Principles and underpinning behaviours
are embedded in our everyday activities,
core systems and processes and enable
growth, innovation and collaboration. The
HWWT Principles drive transparency and
fair dealing and propagate a culture of
performance and devolved accountability –
this allows us to deliver on our Strategy.
Our Code of Conduct outlines what
is expected of everyone who works at
OZ Minerals. It is designed to ensure that
everything we do at OZ Minerals creates
value for our Stakeholders and business
is conducted with honesty and integrity
so we can achieve our Purpose of ‘going
beyond what’s possible to make lives
better’. It addresses issues such as conflicts
of interest, gifts, entertainment and
hospitality, anti-bribery and corruption,
professional behaviour and fair dealing,
and speaking up.
We are determined to create shared value
for all our Stakeholders, which is at the
heart of our Strategy. We have five Value
Creation Policies which are designed to
provide a clear representation of our intent
and make it transparent to our Stakeholders
to enable them to hold us to account. Our
Value Creation Policies, along with our
Securities Trading, Continuous Disclosure,
Anti-Bribery & Corruption, Inclusion &
Diversity and Speak Up materials are
publicly available.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT goVernanCe
27
Company Constitution / Code of Conduct / Board Charter
Audit Committee
Charter
People & Remuneration
Committee Charter
Sustainability Committee
Charter
Policies and public materials
Value Creation Policies
Supplier Value Creation Policy
Continuous Disclosure
We are determined to build value for our
Stakeholders. Our five Value Creation
Policies, which are outlined below, set
out our overarching intent and enable
our specific Stakeholders to hold us to
account.
Employee Value Creation Policy
To provide a safe work environment that
empowers people to have a positive
impact and allows them to grow and
prosper. Our focus is on ensuring our
people enjoy coming to work, are
engaged, valued and inspired to grow
and contribute to OZ Minerals and greater
society through exceptional leadership.
Shareholder Value Creation Policy
To meet or exceed shareholder
expectations while being recognised
as an ethical, well-governed and
socially responsible company.
To align with suppliers in a way that builds
trust-based, collaborative and sustainable
relationships and partnering focused on
the betterment of both organisations, the
industry and the broader community.
To ensure timely and accurate
information is provided equally to all
shareholders and market participants,
consistent with our commitment to
continuous disclosure obligations.
Government Value Creation Policy
Securities Trading
To build trust with government through
ethical behaviour, environmental
stewardship, social responsibility, and
by creating sustainable economic value,
whilst maintaining broad political support
for the ongoing development of our
portfolio.
Community Value Creation Policy
To align with communities in a way that
builds trust-based, collaborative and
sustainable partnerships focused on the
betterment of OZ Minerals, our host
communities and community members
living in regions in which our sites are
located, the industry and broader society.
To set out the processes that our
employees, directors, consultants and
contractors must adhere to when
trading in securities of the Company.
Anti-bribery and Corruption
To ensure directors, officers and
employees understand, observe and
comply with anti-bribery and anti-
corruption laws and regulations,
and our HWWT principles.
Speak Up
To encourage people to speak up
if they become aware of potential
misconduct and ensure that business is
conducted honestly, with integrity, and in
accordance with our HWWT principles,
Code of Conduct and standards of
expected behaviour.
Global Performance Standards
Global Process Standards
Specifications
Asset and Corporate Function level documents
DIRECTORS’
REPORT
direCtors' rePort
29
The directors present their report for the Consolidated
Entity (OZ Minerals) for the financial year ending
31 December 2020 (‘the year’) together with the
Consolidated Financial Statements for the year.
OZ Minerals Limited (OZ Minerals 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; undertaking
exploration activities and the development of mining projects. For additional information
on the activities of the Consolidated Entity, refer to the Review of Results and Operations
section in the Directors’ Report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Carrapateena is an underground copper mine in South Australia which has a long mine
life and growth prospects. OZ Minerals produced first saleable concentrate at the end of
the prior year at the Carrapateena copper–gold mine which ramped up to full capacity by
the end of 2020.
The Pedra Branca mine is an underground copper mine which is part of the Carajás East
Hub in Brazil. Construction of the Pedra Branca mine progressed during the year and was
commissioned in November 2020.
The Group acquired the residual 30 per cent interest in the West Musgrave Project
through the acquisition of Cassini Resources Limited consolidating OZ Minerals’
ownership of West Musgrave to 100 per cent providing full optionality in determining
its development.
The Company also increased its debt facility during the year providing added liquidity
amidst COVID-19 uncertainties. The changes in the state of affairs of the Consolidated
Entity are discussed on pages 8 to 23.
DIVIDENDS
The details relating to dividends announced or paid since 1 January 2019 are set out below:
Record date
Date of payment
12 March 2021
26 March 2021
17 September 2020
5 October 2020
12 March 2020
26 March 2020
3 September 2019
17 September 2019
12 March 2019
26 March 2019
Fully franked
cents per share
Total dividends
$m
17
8
15
8
15
56.4
26.0
48.6
25.9
48.4
DRP
Yes
Yes
No
No
No
30
DIRECTORS AND OFFICERS
OZ Minerals’ directors and officers for the financial year ending 31 December 2020 and up to the date of this report are included in the
table below.
Position
Experience and expertise
OZ Minerals specific
responsibilities
during 2020
Other directorships
at currently listed
entities
Previous directorships
at listed entities
(within the last three
years)
Ms McGrath is an internationally experienced business leader,
director and chairman.
Chairman
of the Board
Member of the People
& Remuneration
Committee
Non-executive
Non-executive
Director of Incitec
Pivot Limited from
September 2011 to
December 2020
Director of Goodman
Group since April
2012
Non-executive
Director of Macquarie
Group and Macquarie
Bank since January
2021
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
Andrew Cole
Managing Director and
Chief Executive Officer
Appointed on
3 December 2014
BAppSc (Hons) in
Geophysics, MAICD
Tonianne Dwyer
Independent
Non-executive Director
Appointed on
22 March 2017
BJuris (Hons), LLB (Hons),
MAICD
Charles 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)
Richard Seville
Independent
Non-executive Director
Appointed on
1 November 2019
BSc (Hons) Mining Geology,
MEngSc Rock Engineering,
MAusIMM, ARSM
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 the UK, 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 the President of the Australian Institute of Company
Directors’ Victorian Division and a member of the National board as the
Victorian Division director. Ms McGrath is Chairman of Scania Australia
(a subsidiary of Scania AB of Sweden) and a Director of not-for-profit
organisation Kilfinan Australia.
Mr Cole has over 28 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 UK.
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.
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 the Australian Institute of Company
Directors and is also the Deputy Chancellor of the Senate of the
University of Queensland. Ms Dwyer is also a Director of Chief Executive
Women and Sir John Monash Foundation.
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 Chairman of the Board 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 Dairymple
Shire Council in Queensland.
Mr Seville has over 35 years’ experience in the resources sector including
25 years as either Managing Director or Executive Director of various
ASX, TSX or AIM listed companies.
Mr Seville was Orocobre’s Managing Director and CEO for 12 years
before stepping down in January 2019. He remains on the Board as
a Non-executive Director.
Mr Seville is a mining geologist and geotechnical engineer, graduating
from the Imperial College London and James Cook University in North
Queensland. He holds a Bachelor of Science degree with Honours
in Mining Geology and a Master of Engineering Science in Rock
Engineering.
In June 2019, Mr Seville was appointed Chairperson of Agrimin Limited.
Managing Director
and Chief Executive
Officer
Member of the
Sustainability
Committee
None
Non-executive
Chairman of Avanco
Resources Limited
from 13 June 2018
to 11 July 2018
Chairman of
the People &
Remuneration
Committee
Member of the
Audit Committee
Chairman of the
Sustainability
Committee
Member of the
Audit Committee
Non-executive
None
Director of DEXUS
Property Group since
August 2011
Non-executive
Director of Metcash
Limited since June
2014
Non-executive
Director of ALS
Limited since July
2016
Non-executive
Director of ALS
Limited since February
2015
Non-executive
Director of Austin
Engineering Limited
from April 2015 to
April 2018
Non-executive
Director of Goldcorp
Inc from January 2017
to April 2019
Non-executive
Director of Newmont
Corporation from April
2019 to April 2020
Member of the
Audit Committee
Member of the
Sustainability
Committee
Non-executive
Director of Orocobre
Limited since January
2019
Non-executive
Chairman of Agrimin
Limited since August
2019
Managing Director
and Chief Executive
Officer of Orocobre
Limited from April
2007 to January 2019
Non-executive
Director of Advantage
Lithium from February
2017 to April 2020
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT direCtors' rePort
31
Previous directorships
at listed entities
(within the last three
years)
OZ Minerals specific
responsibilities
during 2020
Other directorships
at currently listed
entities
Chairman of the Audit
Non-executive
Committee
Member of the People
& Remuneration
Committee
Director of APA Group
since March 2018
Experience and expertise
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 a Non-executive Director of APA Group.
Mr Wasow was previously the senior independent Director of the
privately held GHD Group, 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.
Experience and OZ Minerals specific responsibilities during 2020
Ms Pole is OZ Minerals’ Company Secretary and Senior Legal Counsel. Ms Pole spent a large portion 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 regulatory
compliance with the ASX, ASIC and other regulatory bodies.
As well as holding a Bachelor of Laws from The University of Adelaide and a Graduate Diploma in Legal Practice, Ms Pole is also a graduate member of
the Australian Institute of Company Directors and Certificated Member of the Governance Institute of Australia.
Position
Peter Wasow
Independent
Non-executive Director
Appointed on
1 November 2017
B. Comm, GradDip
(Management), Fellow
(CPA Australia)
Position
Officers
Michelle Pole
Company Secretary &
Senior Legal Counsel
Appointed on
13 December 2017
LLB, GDLP, GAICD
MEETING ATTENDANCE
attendanCe at oZ MineraLs LiMited Board and CoMMittee Meetings (1 JanUarY 2020 to 31 deCeMBer 2020)
Director
Rebecca McGrath
Andrew Cole
Tonianne Dwyer
Charles Sartain
Richard Seville
Peter Wasow
Board meetings
Board committee meetings
Audit
People & Remuneration
Sustainability
A
20
20
20
20
20
20
B
20
20
20
20
20
20
A
–
–
6
6
6
6
B
–
–
6
6
6
6
A
5
–
5
–
–
5
B
5
–
5
–
–
5
A
–
4
–
4
4
–
B
–
4
–
4
4
–
Note: Managing Director and 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.
DIRECTORS’ INTERESTS
direCtors’ interests in the ordinarY shares of oZ MineraLs LiMited
Director
Rebecca McGrath
Andrew Cole
Tonianne Dwyer
Charles Sartain
Richard Seville
Peter Wasow
Total
Shares number
52,292
477,546
19,900
80,000
11,580
20,000
661,318
32
ENVIRONMENTAL REGULATION
OZ Minerals and its activities in Australia,
Brazil and other international locations are
subject to strict environmental regulations.
OZ Minerals’ Prominent Hill, Carrapateena
and Carajás operations, along with its
exploration and concentrate shipping
activities, operate under various licences
and permits under state, federal and
territory laws in Australia, Brazil and
other overseas jurisdictions.
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 Leadership Team and the
Sustainability Committee of the Board
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
its energy and emissions report to the
Clean Energy Regulator in accordance
with the National Greenhouse and Energy
Reporting Act 2007 (NGER Act). KPMG
provided reasonable assurance over
OZ Minerals’ energy and emissions report.
KPMG has also provided limited assurance
over selected metrics and disclosures in
this document against the requirements of
the Global Reporting Initiative Standards.
KPMG’s assurance report is available on
pages 118 and 119.
The Company has not incurred any
significant liabilities under any environmental
legislation during the financial year.
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, current and former
officers, the former General Counsel (Special
Projects), the former Group Treasurers 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
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
any 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.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT direCtors' rePort
33
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 127 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.
aMoUnts Paid or PaYaBLe to the externaL aUditor (KPMg) and its netWorK firMs for
aUdit and non-aUdit serViCes
Audit and review services
Audit and review of financial statements – Group
Total fee for audit and review services
Assurance services
Sustainability Report & NGERS assurance
Other assurance services
Total fee for audit, review and assurance services
Other services
Taxation advice and tax compliance services
Other services
Total fee for other services
Total fees
525,000
525,000
82,900
2,500
610,400
20,500
5,000
25,500
635,900
In addition to the amounts disclosed above, Cassini Resources Pty Ltd incurred $216,816 in relation to the tax compliance and
advisory services provided by KMPG prior to the acquisition by OZ Minerals.
Following the Audit Committee’s
consideration of KPMG providing non-audit
services and its subsequent recommendation
to the Board, the Board is satisfied that
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; and
none of the services undermined the
general principles relating to auditor
independence as set out in APES
110 Code of Ethics for Professional
Accountants. 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
resolved on 18 February 2021 to pay a fully-
franked dividend of 17 cents per share. The
record date for entitlement to this dividend
is 12 March 2021.
OZ Minerals offers a Dividend Reinvestment
Plan (DRP) and eligible shareholders may
participate in the DRP in respect of all or
part of their shareholding. A discount of
1.5 per cent will apply to this allocation
and there is no limit on the number of
participating shares. Shares will be allocated
to shareholders under the DRP for the
2020 final dividend at an amount equal to
the average of the daily volume weighted
average market price of ordinary shares of
the Company traded on the ASX over the
period of five trading days commencing on
11 March 2021. The last date for receipt
of election notices for the DRP is 15 March
2021.
The financial impact of the dividend
amounting to $56.4 million has not been
recognised in the Consolidated Financial
Statements for the year ended 31 December
2020 and will be recognised in subsequent
consolidated financial statements.
34
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
ASX Corporate Governance Council’s
Corporate Governance Principles and
Recommendations 4th 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
18 February 2021
Andrew Cole
Managing Director and CEO
18 February 2021
Subsequent to 31 December 2020, the
Board of Directors approved the Block Cave
Expansion, which will unlock Carrapateena’s
potential to be a multi-generational,
lowest quartile cash cost producing
province, bringing long term value to our
Stakeholders. The Board of Directors has
also resolved to pay a final dividend for
the 2020 financial year, as discussed in
Note 4. There were no other events that
occurred subsequent to the reporting date
which have significantly affected or may
significantly affect the Consolidated Entity’s
operations 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.
OPERATING AND
FINANCIAL REVIEW
Our operations are reviewed on pages
12 to 23 and the Financial Review (page 36
to 39) forms part of the Directors’ Report.
REMUNERATION REPORT
The Remuneration Report which has been
audited by KPMG is set out on pages 56 to
69 and forms part of the Directors’ Report.
BUSINESS STRATEGIES AND
PROSPECTS FOR FUTURE
FINANCIAL YEARS
The Operating Review on pages
12 to 23 and the Financial Review on
pages 36 to 39 of this document sets
out information on OZ Minerals’ business
strategies and prospects for future financial
years. Information in the Operating Review
and the Financial Review is provided to
enable shareholders to make an informed
assessment about the business strategies
and prospects for future financial years of
OZ Minerals. Information that could give
rise to likely material detriment to
OZ Minerals, for example, information that
is commercially sensitive, confidential
or could give a third party a commercial
advantage, has not been included. Other
than the information set out in the
Operating Review and the Financial Review,
information about other likely developments
in OZ Minerals’ operations and the expected
results of these operations in future financial
years has not be included.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 35
3636
FINANCIAL
REVIEW
OZ Minerals’ net profit after tax (NPAT)
for the year was $212.6 million compared
to $163.9 million for 2019, assisted by
higher gold volumes accompanied by a
stronger gold price. While the volume of
copper sold was lower following depletion
of the high-grade copper ore stockpiles at
Prominent Hill, the addition of Carrapateena
in its first year of operation, offset some of
this reduction and contributed to the full
year result.
While the fundamentals for copper remain
solid, the COVID-19 pandemic induced
economic uncertainty through the year,
initially impacting price adversely before
recovering towards the end of the year. The
ensuing economic uncertainty drove a surge
in demand for gold, beneficially impacting
its price in a volatile market.
OZ Minerals’ customers continued to
operate during the year with minimal
interruption and movement of concentrates
remained unhindered. With limited exposure
to the Chinese market, no disruptions were
experienced as a result of current trade
tensions between Australia and China.
The Company’s margin for earnings
before interest, tax, depreciation and
amortisation (EBITDA) remained robust
at 45 per cent (2019: 42 per cent).
Prominent Hill once again delivered a reliable
production and cash cost performance,
as underground mining rates stepped up
and higher-grade underground ore was
supplemented with open pit ore stockpiles.
The operation also benefitted from a positive
reconciliation of stockpiled gold ore grades
and better than expected metal recovery.
At the Carrapateena mine, performance of
the processing plant and underground mine
exceeded original construction expectations
and ramped up to full production within
12 months of commissioning. Expansion
studies beyond the initial sub-level cave
progressed during the year, culminating in
the Board providing its approval, following
the end of the year, to proceed with the
next stage for developing the larger resource
at Carrapateena.
The Antas mine in the Carajás Hub
continued production through the year
as it approaches end of mine life, while
the Pedra Branca mine transitioned to
operational status in the fourth quarter of
the year as it reached the primary orebody.
Exploration and corporate development
expenditure decreased following the
decision to conserve cash in response
to the COVID-19 pandemic and access
to exploration sites was restricted.
Nevertheless, significant milestones were
achieved with the completion of the West
Musgrave PFS in February, the Carrapateena
Expansion Pre-feasibility and Carrapateena
Province Scoping studies in June and the
West Musgrave PFS Update in December.
In the second half of the year, OZ Minerals
consolidated its ownership of the West
Musgrave Project through the acquisition
of Cassini Resources Limited and now fully
owns the project.
OZ Minerals extended its revolving debt
facility to circa $480 million in response to
COVID-19 uncertainty, providing sufficient
liquidity headroom for the business to
continue operating and against which the
balance drawn down at the end of the year
was $100.0 million.
As a result of strong operating cashflows in
the second quarter, the Company concluded
the year with a pre-debt cash balance of
$131.7 million. During the year ongoing
investments were made at Carrapateena,
Prominent Hill underground and Pedra
Branca, along with tax payments to the
government and dividend payments to
shareholders.
VarianCe anaLYsis – UnderLYing net Profit after tax, 31 deCeMBer 2020 CoMPared to 31 deCeMBer 2019
500
400
n
o
i
l
l
i
m
$
300
200
100
0
175.6
21.0
163.9
28.1
Increase in
revenue due to
sales volume:
Copper
Gold
Silver
Total
(160.1)
186.0
2.2
28.1
Increase in
revenue due to
sales price:
Copper
Gold
Silver
Total
82.5
86.3
6.8
175.6
99.8
251.4
80.8
Decrease in
production costs:
Mining
(inc. Inventory and
NRV adjustments)
Processing
Site Admin
Freight
Total
(2.2)
(15.1)
36.3
99.8
16.3
40.7
212.6
(129.0)
Carrapateena
production costs:
Mining
(inc. Inventory and
NRV adjustments)
Processing
Site Admin
Freight
Total
(66.5)
(49.6)
(6.3)
(251.4)
Underlying NPAT
for the year ended
31 December 2019
Sales volume
Sales price
TCRC and
royalties
Production costs
Prominent Hill
and Carajás
Production costs
Carrapateena
Other costs
Tax and
interest
Underlying NPAT
for the year ended
31 December 2020
OZ Minerals’ financial results are reported under International Financial Reporting Standards (IFRS). This Annual and Sustainability Report includes 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 1 Operating Segments, which form part of the Consolidated Financial Statements.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS
direCtors' rePort
37
At the Carajás Hub, following completion of
the open pit cutback in 2019, mining costs
reduced significantly resulting in production
costs being lower by $15.5 million. Costs
relating to the Pedra Branca project were
capitalised through until the end of October
in line with its development schedule.
A positive net realisable value (NRV)
adjustment of $66.5 million was recognised
in relation to inventory, which also included
a write down of obsolescent stores and
ore. This compared to an NRV write up of
$27.8 million in the comparative period.
The write up of NRV during the year was
mainly due to assumed gold price and earlier
anticipated processing of ore stockpiles.
EXPLORATION AND CORPORATE
DEVELOPMENT EXPENDITURE
Exploration and corporate development
expenditure of $50.5 million was
incurred during the year to progress the
Carrapateena expansion study; drilling and
development studies in the Carajás and
Gurupi provinces; and other exploration
earn-in arrangements in the growth
pipeline. Key spend areas included:
Carrapateena expansion $16.9 million
Carajás and Gurupi study costs and
exploration $9.9 million
other exploration and development
expenditure $23.7 million.
OTHER EXPENDITURE
Corporate general and administration
costs of $56.0 million were largely related
to direct corporate activities. The increase
of $5.8 million over the comparative
period was mainly due to an increase in
depreciation and amortisation following
a review of information technology assets
which have a relatively shorter useful life.
A provision for potential one-off legal costs
was also recorded.
The income tax expense of $83.2 million
was $18.5 million higher than the previous
year as a result of the higher profit and
partly offset by the benefit of restricted prior
year tax losses recognised during the year.
Finance expense of $27.1 million was
$22.2 million higher than the previous year
with debt facility charges and lease finance
expenses also being recognised under
AASB 16 Leases.
REVENUE
Gross revenue of $1,377.8 million
was higher than the previous year by
$203.8 million, mainly due to a higher
volume of gold sales, which more than
offset a reduction in copper sales during the
year. The volume of contained copper sold
during the year was circa 19,000 tonnes
lower while contained gold sold was circa
101,000 ounces higher. The realised $A
copper price was 11 per cent higher than
in the comparative period while the net $A
gold price was 20 per cent higher. Revenue
includes $92.7 million in realised losses on
gold hedges. The net proceeds from the sale
of concentrate attributable to ore mined
during development of the underground
mine at Carrapateena of $37.2 million and
Pedra Branca of $5.8 million was recorded
as a reduction against the previously
capitalised costs of developing each
mine and not recognised in revenue.
REALISATION COSTS
Treatment charges and refining costs
(TCRCs) were $31.1 million lower as a
result of improved trading terms and lower
refining charges in the global market.
Royalty expense increased by $10.1 million
due to the increase in net revenue, partially
offset by a lower state royalty rate applicable
to Carrapateena for the first five years.
PRODUCTION COSTS
Total production costs of concentrate
sold were $151.6 million higher than the
comparative period mainly due to the
inclusion of Carrapateena which added
$251.4 million to production costs following
first saleable concentrate production
towards the end of 2019. This was partially
offset by a reduction of $99.8 million
predominantly at Prominent Hill.
Lower processing volumes year on year
contributed to production costs for
Prominent Hill being $73.3 million lower
than the comparative period, despite offsets
from a higher proportion of underground
ore and an increase in power infrastructure
costs following the activation of the new
power line in the last quarter of the year.
While continued processing of open pit
ore stockpiles to supplement high grade
underground ore contributed to a lower
cash cost outcome for the mine, the cost
of ore inventories processed from stockpiles
was included within total production costs.
During the year, costs attributable to the
processing of ore extracted during the
development of the Carrapateena and Pedra
Branca mines were capitalised. Following the
commencement of operations, production
costs were subsequently recognised within
the Income Statement.
38
Cash BaLanCe and Cash fLoW
n
o
i
l
l
i
m
$
700
600
500
400
300
200
100
0
550.4
520.2
134.0
28.4
4.1
131.7
Opening
1 January 2020
cash balance
Operating
activities
Investing
activities
Financing
activities
Effect of
exchange rate
changes
Closing
31 December 2020
cash balance
OPERATING CASH FLOWS
Operating cash flows of $550.4 million
for the year were $39.8 million higher
than in 2019 mainly due to higher receipts
from customers from higher revenues
and lower payments for exploration and
corporate development activities.
Customer receipts during the year were
higher by $113.1 million with higher
gold volumes and price driving revenue.
Payments to suppliers and employees
were $589.2 million for the year,
$96.5 million higher than in 2019 with
the inclusion of operating costs relating
to Carrapateena production. Payments for
exploration and corporate development
expenditure decreased by $49.4 million
reflecting the impact of reduced activity
following access restrictions due to the
COVID-19 pandemic. PAYG tax payments
of $43.8 million were in line with the
previous year.
Financing costs included in operating
cashflow increased during the year by
$20.7 million because of debt servicing
facility commitment fees and interest
charges which were incurred following the
extension of the revolving debt facility and
draw down of debt during the year.
INVESTING CASH FLOWS
Net investing cash flows of $520.2 million
were attributable to development costs at
Carrapateena, property, plant, equipment
and mine development at Prominent Hill
and the Carajás, and study costs associated
with the West Musgrave Project. These
cashflows were partially offset by net
proceeds from the sale of concentrate
attributable to ore mined during the
development of Carrapateena and Pedra
Branca. The payments incurred related to:
capitalised Carrapateena development
costs of $392.6 million, including net
proceeds from the sale of concentrate
of $37.2 million
Prominent Hill mine development
costs $43.3 million
site sustaining capital expenditure
$31.9 million
Carajás capital expenditure $32.6 million
including Pedra Branca mine development
expenditure of $22.2 million and net
proceeds from sale of concentrate of
$5.8 million
West Musgrave capitalised exploration
and evaluation costs $16.2 million
other capital expenditure $3.6 million.
FINANCING ACTIVITIES
Cash outflows relating to financing activities
were $28.4 million comprising $73.2 million
in dividend payments to shareholders,
$55.2 million in payments to suppliers
classified as lease payments under AASB 16
Leases and a $100.0 million net drawdown
of the debt facility.
Since the end of the year, the Board has
resolved to pay a final dividend for the 2020
financial year amounting to $56.4 million.
This final dividend will be fully franked for
Australian tax purposes and eligible for the
dividend reinvestment plan.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
direCtors' rePort
39
BALANCE SHEET
The total equity of the Company increased by $231.5 million to $3,211.4 million. The increase resulted mainly from the year’s NPAT of
$212.6 million and share capital issued to acquire the residual interest in the West Musgrave Project from the shareholders of Cassini
Resources Limited. Movement in gold derivative contracts of $24.1 million, partially offset by returns to shareholders in the form of dividends
amounting to $74.6 million and a decline in foreign currency translation reserve of $37.4 million, reduced total equity. The movement in the
net assets of the Group since 31 December 2019 is provided below.
BaLanCe sheet
3,400
3,200
n
o
i
l
l
i
m
$
3,000
2,979.9
2.3
18.9
320.9
3.1
20.6
100.0
18.0
3,211.4
Recognition
of bank debt
facility.
Increase
in Trade
receivables
due to the
addition of
Carrapateena
revenue and
shipment
timing.
PP&E increase
primarily due
to capital
expenditure at
Carrapateena.
67.3
2,800
Net asset
2019
Cash
Inventory
Trade
receivables
PP&E and
exploration
assets
Net lease and
other assets
Trade payables
Debt facility
Tax and other
liabilities
Net assets
2020
At the end of the year, the Company held a cash balance of $131.7 million and a debt balance of $100.0 million on its credit revolver.
The increased debt facility of circa $480.0 million provided added liquidity and flexibility during COVID-19 as well as enabled the continued
execution of the Company’s growth Strategy.
The reduction in the cash balance was a result of operating cash flows being offset by ongoing investment in Carrapateena, Prominent Hill,
West Musgrave, and general Property Plant and Equipment (PP&E), as well as the payment of dividends. Inventories of $518.7 million at
the end of the year had reduced by $18.9 million since 1 January 2020. As open pit ore from stockpiles were consumed in the production
of concentrate, the associated costs were recognised in the income statement within inventory adjustments.
The net NRV adjustment of $66.5 million increased the value of the remaining inventory.
Trade receivables increased due to the timing of shipments, with shipments for all three operations occurring in the second half of
December.
PP&E and exploration assets increased during the year mainly due to capital expenditure at Carrapateena; the acquisition of the remaining
30 per cent interest in the West Musgrave Project; capitalisation of underground development expenditure at Prominent Hill; capitalised
West Musgrave exploration and study costs; and general sustaining capital expenditure. This was partially offset by depreciation and net
proceeds received from the sale of concentrate attributable to ore mined during the initial development of both the Carrapateena and
Pedra Branca mines.
Additional right-of-use (ROU) lease assets and liabilities were recognised during the year associated with the extended Prominent Hill
mining services contract and the power infrastructure contract. The amounts are included as part of Borrowings on the balance sheet.
4040
OZ MINERALS
RISK
MANAGEMENT
OZ Minerals’ operating performance and
financial results are subject to a wide range
of risks. These risks comprise financial,
market, political, social, operational, and
environmental factors which create both
threats and opportunities for the Company.
The Company manages current and
emerging risks as an integrated part of its
operating environment to minimise adverse
impacts and maximise beneficial outcomes.
Through its risk management framework,
emphasis is placed on risk-aware decision-
making practices to deliver OZ Minerals’
Strategy, contributing to the achievement of
value creation for its five Stakeholder pillars.
Risk management accountability
and oversight is a central part of the
OZ Minerals’ governance framework.
The Board, its Committees and the Executive
leadership provide oversight and monitoring
of risk management process and practice.
Collectively, they are responsible for ensuring
the Company maintains an effective risk
management standard and internal control
environment, with risks assessed according
to the potential impact on each stakeholder
pillar. OZ Minerals’ corporate governance
structure and communication channels
enable timely responses to current and
emerging risks.
RISK MANAGEMENT OVERSIGHT
AND GOVERNANCE
Board
The Board sets the Company’s risk appetite
and oversees the management framework
and effectiveness of the systems of internal
control and risk management. It also reviews
and monitors the material risks of the
Company.
Reporting of material risks to the Board
includes an overview of Company risks,
a summary of key changes to the risk
profile, critical control updates, and the
actions implemented to reduce the level of
uncertainty and improve the manageability
of risks. The Board requires the CEO and
Executive leadership to implement a system
of controls for identifying, assessing,
managing, and reporting risks in line
with the risk management framework.
Board Committees
The Audit, Sustainability, and People &
Remuneration Committees review risk
management reports covering risks, controls,
and actions to manage risks to the business
within their respective remits.
The Audit Committee assists the Board in
the effective discharge of its responsibilities
in relation to financial reporting, audit,
disclosure processes, internal financial
controls, cyber and digital risk, funding
and financial risk management (including
internal and external audit functions).
The Sustainability Committee assists the
Board in the effective discharge of its
responsibilities in relation to safety, health,
environment, and community (SHE&C),
and oversight of the risks relating to those
matters. This includes risks relating to
climate change, cultural heritage, human
rights including modern slavery, sovereign
jurisdictions, compliance with legislation,
regulation, and any litigation activities.
The People & Remuneration Committee
assists the Board in discharging its
responsibilities in relation to people
and remuneration including oversight
of risks related to people performance
management, Company culture, succession
planning, capacity and capability, and
inclusion and diversity.
The Board retains direct accountability and
oversight of all material risks including those
outside the Board Committees’ remits.
These include risks relating to mergers
and acquisitions, the Company’s growth
Strategy, sovereign uncertainty, Mineral
Resource and Ore Reserve estimates,
macro-economic and market-related risks.
Executive Leadership
The Executive Leadership Team (ELT) is
responsible for the effective implementation
of the risk management framework and
system of control for identifying, assessing,
managing, and reporting risk across the
Company. The ELT reviews, and the CEO
approves, the risk profile for the organisation
and ensures Assets and Corporate Functions
embed risk management process and
practice into everyday business systems
and processes.
Corporate Risk Function
The Corporate Risk Function supports
and coordinates the implementation
of the risk management framework,
ensures risk management is embedded
into core business processes, and builds
risk management capability and a
risk-aware culture across the business.
The Corporate Risk Function oversees
OZ Minerals’ Risk Management Framework
and develops, governs, supports, and
reports on the effective implementation
of risk management to the ELT, the Board,
and its Committees.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS direCtors' rePort
41
OZ Minerals operates a four-level line of defense risk management
governance model:
4
3
2
1
External Audits
Statutory and Regulatory Audits
conducted by third parties
Independent Internal Audits
Internal Audits conducted in accordance
with an approved Internal Audit Plan
Enable and Monitor
Asset and Corporate Function Leads
validate first line activities to assure
risks are managed effectively
Identify and Implement
Risk and Control Owners apply Global
Process and Performance Standards to
identify risks, implement controls
and verify control effectiveness
The first line of defence
– Identify and Implement
Global Process Standards define the
approval escalations between the Board,
CEO, Assets and Corporate Functions
based on risk. The Risk Management
Process Standard outlines the mandated
process for escalation and the roles
of organisational authority levels in
risk reduction. Risk responsibility for
identifying, assessing, managing, and
reporting resides with all employees who
are responsible for considering risks when
making key decisions, implementing
controls and monitoring risks during
their activities.
The second line of defence
– Enable and Monitor
The senior leadership of the Assets and
Corporate Functions ensure compliance
with the minimum controls in OZ Minerals’
Global Performance and Process Standards
and provide subject matter expertise and
insights to support the delivery of the
standards.
The third line of defence
– Independent Internal Audits
All Global Process and Performance
Standards are subject to the Audit and
Assurance Process Standard, where
compliance against the Standard and
opportunities for improvement are
monitored by the Corporate Audit
Function in addition to the self-assurance
activities undertaken by the Assets and
Corporate Functions themselves. The
Internal Audit and Assurance Function
provides independent assurance over
the governance, compliance and internal
control system and processes across the
business.
The fourth line of defence
– External Audits
External Audit provides an independent
assurance that the internal control system
is adequate, and that OZ Minerals’
operations comply with the minimum
requirements of relevant regulatory,
legislative, and associated standards.
Managing risk
Our risk framework commits us to managing
risks in a proactive and effective manner.
Effective risk management requires the
identification and assessment of the
risks that matter most in achieving the
Company’s strategic objectives, so resources
can be prioritised in the most efficient and
effective way.
Material risks are managed in the context
of supporting the successful delivery of
OZ Minerals’ Strategy. Risks are initially
assessed to determine their Highest
Credible Impact (HCI) without critical
controls, through the lens of OZ Minerals’
Stakeholder Value Creation, using Impact
Assessment criteria. The effectiveness of
current critical controls – to prevent threats,
enable opportunities and respond to HCIs
– are assessed to determine the Current
Residual Risk Rating.
Where controls for a risk are assessed as
requiring improvement, management plans
are developed and implemented to improve
those controls and to ultimately achieve a
Target Residual Risk Rating – moving the
risk to a ‘Well Controlled’ status. Current
material risks are required to be reviewed
every six months at a minimum to determine
whether our exposure to the risk continues
to remain within our risk appetite.
42
Risk movements
Changes in geopolitics, macroeconomics,
the impact of COVID-19, an enhanced ESG
focus, and the continued evolution of our
risk management processes themselves have
changed our material risks since 2019.
In particular, we continue to consider the
implications of the COVID-19 pandemic
on our business, including assessing its
potential short and long-term effect on
the Company’s risk profile, heightening a
number of the risks listed on the following
pages. These include supply-chain
interruptions, mobility, workforce flexibility,
the commodity market cycle, resource
nationalism, trade flow impacts, and the
resilience of global financial markets to
support recovery outcomes. Each of these
could materially affect our communities,
suppliers, shareholders, governments,
and employees, impacting our ability to
create value.
Company risk categories
and material risks
The allocation of our material risks against
the Company’s primary risk categories is
shown in the table on the following page,
with further analysis described in the
subsequent risk descriptions.
In identifying our material risks, we have
considered the likelihood and potential
impact of the related events. Key changes
to our inherent material risks, primarily due
to the external environment and ongoing
global political instability, are presented
within the table. Changes are determined
based on the inherent risks before the
application of controls and response plans
to reflect these uncertainties. Company
strategic controls and actions to prevent,
reduce, or mitigate downside risk events
and increase the likelihood of opportunities
being realised are provided against each
risk item.
Our process for identifying, assessing,
managing, and reporting material risks is
designed to manage opportunities that
facilitate or exceed, and threats that may
hinder, the achievement of the Company’s
Strategy and, where appropriate, to accept
a degree of risk to create value for key
stakeholders. We have an enterprise-wide
digital risk management information system
where all material risks, controls and actions
are documented and kept current for
managing and reporting purposes.
The Board and Committees review and
consider the Company’s risk profile,
including strategic, operational, new, and
emerging risks based on the monthly,
quarterly, and annual material risk reports.
The reports include an overview of the risk
profile, summary of material changes to the
profile, key risks in focus, and updates on
emerging Company and sector risk themes.
The ELT reviews, and the CEO approves,
new (or changes to) material risks, a process
facilitated by the enterprise-wide digital
risk management information system. On a
regular basis, members of the ELT deep dive
into selected topical material risks with risk
owners to validate the adequacy of critical
controls and to continue elevating our risk
maturity journey.
Emerging risks and uncertainties
There remain significant implications for
the Company that arise from periodic
and sometimes ever-growing geopolitical
tensions impacting market sentiment.
Examples include rising trade tensions
between nations, geopolitical friction, and
the potential for the COVID-19 pandemic
to slow global growth and impact demand
for our products. Additionally, there is a
continuing focus on resource nationalism.
This has the potential to adversely affect
Company earnings and value creation for
other stakeholders.
During the year, we again saw a rise
in societal expectations regarding the
potential impact of the mining sector,
including our business, on the local
economy, communities, and environment.
There has also been an increase in focus
by investment firms on environmental,
social and governance (ESG) issues when
reviewing their investment criteria. Risk
management, including on ESG issues, has
formed part of our governance framework,
strategic thinking, and investment decision
criteria throughout the year. We continue to
enhance our monitoring and management
of greenhouse gas (GHG) emissions, water
and land use, waste, and rehabilitation.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT direCtors' rePort
43
CHANGES TO OUR
MATERIAL RISKS IN
FY2020
No material movements
Removed/managed threat
Increased threat
Increased opportunity
Decreased threat
Detailed information for risks in bold is
provided in the section below, either at
risk category level where consolidation
is deemed appropriate or at the
individual risk level.
Company Material
Risk Categories
Company Material Risks
(Threat and Opportunity focused)
Strategy
Merger, acquisition
and divestment
Expansion, project
execution and
delivery
Innovation
and Strategy
Single material
operating asset
Climate change
and environment
Climate change
and emissions
Closure and
rehabilitation
Water and waste
management
Biodiversity
management
Community and
human rights
Social performance
Cultural
heritage sites
Human rights,
ethics and security
Governance
and stakeholder
relations
Geopolitics
and trade
protectionism
Regulatory,
regulation and
compliance
Resource nationalism
Production
and operations
Geotechnical
Third party
performance
Asset
infrastructure
integrity
Operational
productivity
Commercial
and market
Commodity
market cycle
Inbound
supply chain
Product
transportation
Concentrate
quality
Electricity
supply
Financial
Liquidity
Balance
sheet
Exploration
and resource
Exploration and
joint-venture
performance
Mineral reserve
reporting
Mineral resource
estimation
People
and culture
Culture and
performance
Attract and retain
key talent
Inclusion
and diversity
Capability
and capacity
Health
and safety
Occupational and
process health
and safety
Tailings storage
facilities
Aviation
Mental and
physical health
Technology
Cybersecurity and
data security
ICT/OT system
Services
44
Key Risks
Strategy
Potential Impacts
Strategic Controls and Responses
FY2020 Trend Analysis
Merger, acquisition, and divestment
Stakeholder support
A robust framework to deliver value through
and relations
mergers, acquisitions and divestments.
Threat: Ability to create value for key stakeholders
by successfully executing mergers, acquisitions and
divestments may vary and could result in value
destruction by realising less than the fair value
for divestment or paying more than fair value for
acquisitions.
Opportunity: Ability to successfully acquire and
integrate businesses on favourable terms provides
sustainable future cash flow and future growth
optionality.
Company reputation
Liquidity and financial
performance
Growth
Project development, execution, and delivery
Threat: The Company’s ability to deliver projects
successfully and safely may vary due to changes
in technical requirements, or through commercial
or economic assumptions proving inaccurate
through the execution phase.
Opportunity: An ability to develop projects
safely, on time, and within budget enhances
the Company’s reputation, demonstrate social
performance, stakeholder confidence, and increases
cash flow and returns to all stakeholders.
Growth, liquidity,
and asset value
Stakeholder support
and relations
Company reputation
Financial and operational
performance
Employee health
and safety
Innovation and Strategy delivery acceleration
Financial and operational
Opportunity: The ability to establish aspirations that
seek to identify ways to accelerate the delivery of
Company strategic objectives and stretch the
Company to realise full competitive advantage
from its Strategy elements.
performance
Company reputation
Stakeholder support
and relations
Liquidity, growth,
and asset value
There are no changes
identified that are
expected to materially
change OZ Minerals’
exposure in this area.
The Carrapateena
project was successfully
delivered and ramped-
up ahead of schedule
despite the challenges
of the COVID-19
pandemic.
Global disruption
due to the COVID-19
pandemic presented an
opportunity to identify
ways to accelerate our
strategic objectives and
be a Modern Mining
Company.
Mergers, Acquisitions and Divestments Process
Standard.
Third party due diligence and assurance review
processes where necessary.
Segregated approach to identification and subsequent
review of potential transactions and projects to ensure
appropriate governance is applied over the assessment
of financial risk and returns.
Post investment reviews and key learnings embedded
into future initiatives.
Maintain internal management team and skillsets.
Internal and independent external review of the
engineering, technical, and financial scope definitions,
and other assumptions.
Third-party due diligence and assurance as part
of its engagement.
Project approval, monitoring and progress status
evaluation are performed in line with OZ Minerals’
project governance framework through the Global
Process and Performance Standards.
Maintain strong focus on contractor management.
Project optimisation and acceleration management
strategies.
Maintain internal management team and skillsets.
Project Beyond established as a dedicated project to
drive acceleration through prioritisation, stretch and
challenge of ideas gathered from across the Company.
Risk-based Company Strategy review and integrated
decision making.
Innovation and Change Process Standard ensures a
process for advancing and embracing change and
works proactively to evolve, create, and transform
through idea generation, creating value.
Leverage internal and external partners to enable
value creation and broad collaboration to adopt
successful ideas.
Climate Change and Environment
Climate change and emissions
Threat: The ability to prepare for and manage
potential physical impacts (acute and chronic)
such as increased extreme weather events and
transition impacts including increased regulation,
market shifts or changes to technology and
energy sources.
Opportunity: Climate change has the potential
to be a catalyst for growth in low-carbon industries
and technologies that require copper, resulting in
upward pressure on copper prices. Less emissions-
intensive product can increase demand and access
to new markets.
Capital and Operating costs
Financial and operational
performance
Stakeholder support
Company reputation
Focusing on reducing operational emissions by investing
in low emission technologies and incorporating
emissions into commercial decisions whilst working
collaboratively with others to identify improvements.
Partnering with suppliers and contractors to reduce
emissions across the value chain.
Enhancing our resilience to physical climate impacts
by assessing asset operational resilience. We consider
climate risks over the life of our operations; from the
way we design and develop new projects through to
closure and beyond.
Reducing the energy and water intensity of our
operations, developing innovative practices in relation
to chemical processing and increasing efficiency of
transportation and processing activities.
Regulatory, community
and investor standards
and expectations in
relation to climate
change continue to
increase including
greater scrutiny of
resilience to potential
physical impacts of
climate change and
expectations for
companies to reduce
emissions in line with
global efforts.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT direCtors' rePort
45
Key Risks
Potential Impacts
Strategic Controls and Responses
FY2020 Trend Analysis
Social performance
and stakeholder value
Operational and financial
Operational monitoring program including groundwater,
cultural heritage sites and flora and fauna habitats.
Complying with the South Australian Government’s
Environment, closure, and rehabilitation
Threat: Ability to close operations and rehabilitate
affected areas at the conclusion of mining and
processing activities in line with regulatory
requirements. Failure to manage our environmental,
closure, rehabilitation, biodiversity, and water risks
could have a significant impact on our performance
and relationships with stakeholders.
Opportunity: Excellent performance on mine closure,
rehabilitation and legacy management of closed sites
can enhance OZ Minerals’ reputation and enable
the Company to gain and maintain access to land,
resources, a skilled workforce, and external funding.
performance
Stakeholder support
and relations
Company reputation
License to operate
and growth
Government and
environment
Community and Human Rights
Social performance and cultural heritage sites
Threat: The Company or its partners performance
may directly, indirectly or cumulatively adversely
impact the social, economic, and cultural values of
stakeholders and communities. This can affect our
relationships with, or be viewed negatively by,
our key Stakeholders.
Opportunity: superior social performance
Ability to partner with key Stakeholders to co-develop
specific and fit for purpose processes based on Free,
Prior and Informed Consent that drives value creation
for both the business and communities.
Stable and secure land tenure
Stakeholder support and
Company reputation
Future project approvals
and growth strategy
Regulatory compliance
There are no changes
identified for these
risks that are expected
to materially change
OZ Minerals’ level of
exposure.
Significant external
attention drawn to
cultural heritage
management and
practices.
The COVID-19
pandemic has increased
exposure and impacts
associated with pre-
existing factors that
affect communities
and society such as
inadequate community
services and community
health and safety.
Program for Environmental Protection and
Rehabilitation (PEPR) to address mine closure
requirements in line with the Department for Energy
and Mining.
Complying with the Brazil National Mining Agency,
and the Environmental Agency of Para State (SEMAS)
regulations to address mine closure requirements.
Independent review of mine closure estimates.
Estimates of mine closure costs are reflected in
accordance with AASB 137 Provisions, Contingent
Liabilities, and Contingent Assets as provisions in
the financial statements.
Report annually environmental performance on
emissions and energy, water and land use and
rehabilitation.
Social Performance Standards which set out the
minimum standards for Assets.
Cultural Heritage management plans are co-designed
and endorsed by both organisations.
Management Plans are prepared by or in consultation
with a trained, qualified, and experienced person
with the relevant knowledge and technical skills to
identify and address the relevant threats associated
with the activity.
Cultural Heritage Management – define and assign
accountabilities, including executive signoff, to
ensure no unauthorised disturbance occurs.
Local level Agreements are developed and operated
in line with the principles of Free, Prior, and Informed
Consent.
Partnering Agreements with Land Connected and
Indigenous Peoples.
Cultural Heritage surveys undertaken prior to any
land disturbance activities.
Cross cultural awareness and training is provided
to key employees.
Geographic Information System heritage database.
Supplier and partners flow down provisions and due
diligence processes.
Department of Defence Deed and arrangements.
Key
No material movements
Increased threat
Increased opportunity
Removed/managed threat
Decreased threat
46
Key Risks
Potential Impacts
Strategic Controls and Responses
FY2020 Trend Analysis
Governance and Relations
Geopolitical stability
Threat: Political uncertainty, trade protectionism,
increase in stakeholder expectations, and changes
in relations between countries in which we operate,
or where our customers or supplies operate, can
impact our ability to access resources and markets
needed to achieve our Strategy.
Regulatory, regulation & compliance
Threat: The Company’s activities by employees,
directors or partners could result in actual or
perceived breaches of legal, regulatory, ethical,
or human rights compliance obligations or
inappropriate business conduct.
Opportunity: Complying with laws and regulations
and maintaining a high ethical and social performance
standard enables OZ Minerals to gain and maintain
access to resources, expand provinces, investment
opportunities and create value for our Stakeholders.
Production and Operations
Geotechnical and underground wall stability
Threat: The underground mining operations are
subject to geotechnical uncertainty, adverse ground
conditions, decline/mine collapse, cave-ins, rock falls,
fire, and uncontrolled explosion incidents.
Production and Operations
Third Party Performance
Threat: Contractors, suppliers, and strategic
partnerships play a significant role in delivering the
Company’s growth, production, cash and market
positioning and a failure to perform under existing
contracts or obligations may lead to adverse impacts.
Opportunity: A strategic partnership offers
opportunities to access resources, increase
stakeholder support and reduce operational risks.
Potential impact of the
Diversified customers and markets to reduce exposure
supply, demand and price of
our products and therefore
financial performance
Inbound and outbound
supply chain disruption
Inability to access resources
and markets
Group reputation
Future financial performance
Stakeholder support
to geopolitical and macroeconomics shifts.
De-risk key supply chains through local and global
diversification.
Actively monitor geopolitical and macroeconomics
developments and trends.
Regularly assess our ability to access customers
and suppliers.
Monitor the socio-political environment in which
we operate and the stakeholders that influence
that environment.
Governance framework provides minimum requirements
to comply with laws and legislation.
Modern slavery, anti-bribery and corruption, continuous
disclosure, and Code of Conduct training and
awareness.
Contractor due diligence.
OZ Minerals employees, contractors, and partners
operate in compliance with the HWWT Principles,
Policies, Global Process and Performance Standards.
Track and monitor key changes to legislation and
regulations and respond to new requirements.
Whistleblower process standard and reporting services,
supported by incident reporting and investigation.
Employees and family
members
Communities
Government and
environment
Group reputation
Financial Performance
and Asset value
Suppliers and customers
Trigger action response plans to maintain the stability
of the underground and open pit walls.
Geotechnical monitoring and inspection programs.
Periodic Independent geotechnical review and
assurance.
Emergency response plans and underground
emergency facilities.
Trained, skilled and experienced personnel.
Regular inspection, reviews and monitoring
of the underground and ground conditions.
Employees and their
family members
Operational and financial
Partner, contractor and supplier due diligence,
selection criteria and partnering framework.
Collaborative and integrated partnership with
performance
Group, partners, and
supplier reputation
Stakeholder support
and relations
key contractors and partners.
Competitive procurement processes and embedded
performance structures in contracts that delivers the
highest value for Stakeholders.
Governance framework, performance standards and
HWWT principles for assets, partners, or contractors.
Regular performance reviews against plans and
implementation of improvement actions and
opportunities.
Periodic global supply chain review.
The trend has increased
due to changes in
relationships and
increased strategic
competition at
international
level, a decline in
multilateralism,
market volatility and
geopolitical tensions.
There are no changes
identified that are
expected to materially
change OZ Minerals’
level of exposure.
The exposure increased
due to underground
mining operations
ramp-up, but internal
controls have been
implemented to
mitigate the risk.
There are no changes
identified that are
expected to materially
change OZ Minerals’
level of exposure.
Commercial and Market
Commodity Market Cycle
Opportunity: An increase in demand for emission free
energy, commodity prices and/or favourable foreign
exchange rate movements generates positive cash
flow and strengthens the Company’s liquidity position,
enabling the Company to pursue value creation
growth options and/or increase Stakeholder support.
Threat: Commodity prices are driven by global market
demand and supply. A decrease in commodity prices
will reduce cash flow, profitability, and impact directly
or indirectly on all Stakeholders.
Cash flow, profitability,
and liquidity
Access to capital
Investment and/or
growth opportunities
Group reputation
Stakeholder support
and relations
Diversified customers and markets.
Group liquidity and credit management strategy.
Actively monitor, markets and macroeconomics
developments and trends to inform our forecasting
assumptions.
The increasing demand
for emission-free
energy may increase
the demand for copper.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT direCtors' rePort
47
Key Risks
Potential Impacts
Strategic Controls and Responses
FY2020 Trend Analysis
Supply chain and concentrate quality
Liquidity and financial
Customised solutions developed in partnership with
Threat: A global economic slowdown, change
in policy, supply chain disruption, trade, and
port restrictions, concentrate grade, and impurities
could result in a slowdown in demand for our
products and reduced earnings and cash flow.
performance
Operational performance
Stakeholder support
Company reputation
Partner relations
Employees
Operational and Financial
performance
Health and safety
and environment
Stakeholder support
and relations
Company and partner
reputation
Future financial performance
Solvency and liquidity
Group reputation
Security of electricity supply
Threat: A significant electricity supply failure can lead
to operational and commercial disruption, health
and safety incidents and environmental damage.
Financial
Balance sheet and liquidity
Threat: The Company’s ability to refinance and
attract sufficient new capital to fund current and
future operations and growth through an economic
downturn could be compromised by a weak
balance sheet.
Opportunity: Strong internal capital management
and favourable market conditions could increase
liquidity, balance sheet strength, and allow the Group
to pursue investment growth opportunities, pay debts
and/or increase total shareholder returns.
customers which matches smelter demand, concentrate
grade and timing, along with a range of controls to
manage impurity levels.
Ore and concentrate blending and additional flotation
treatment in the processing plant.
Diversified customer portfolio to mitigate against the
risk of regulatory changes to importation requirements.
Monitor market conditions and regulatory changes.
Maintain technology ‘know-how’ in relation to
concentrate treatment plant technology.
South Australia energy strategy for Gawler Craton
aligned with business strategy and demand. This is
focused on four key elements: distribution, generation,
procurement, and demand management.
Electricity supply contract management including
both securing and extending distribution options.
Manage debt maturities to spread repayment
and minimise refinancing risk.
Credit exposure management to ensure the Group
capital structure is not compromised if a finance
counterparty fails to perform its financial obligation.
Clear business strategy, capital discipline, and a
conservative capital structure encourage lenders and
shareholders to continue investing in the business
and to attract new capital on attractive terms and
at competitive pricing.
Exploration and Resource
Exploration, Resource and Ore Reserves
Future financial operational
performance
Group reputation
Threat: The threat that new information on resource
and reserves come to light means that the economic
viability of some Ore Reserves and mine plans may be
estimated downwards.
Also, the inability to discover new resources or
projects could undermine the future growth pipeline.
Opportunity: The discovery of a new viable orebody
can significantly improve future growth options. In
addition, the economic viability of some Ore Reserves
and mine plans can be restated upwards.
Comply with Joint Ore Reserves Committee (JORC)
guidelines and in some instances verification by
independent mining experts.
Retain skilled and experienced exploration
and evaluation personnel.
Review of estimates by a committee of peers
to challenge the applied assumptions.
Production plan based on published reserves
and resources.
Develop, leverage, and manage third party partnership
and utilise new technologies where appropriate for
exploration and evaluation of reserves/resources.
Geopolitical and
macroeconomic
developments and
impacts from the
COVID-19 pandemic
increased commodity
price uncertainty
and supply chain
disruption.
The Hill to Hill power
project was energised
in October 2020,
securing and extending
distribution options
within the South
Australian operating
region.
The Company
strengthened its
Balance Sheet,
refinanced and
increased its
debt facility and
implemented further
liquidity measures
to mitigate the
potential for adverse
changes and optimise
opportunities from the
macroeconomic cycle.
The current operating
environment caused by
COVID-19 has affected
the ability to undertake
field-based exploration
activities.
The potential Prominent
Hill underground
expansion may provide
an opportunity.
Key
No material movements
Increased threat
Increased opportunity
Removed/managed threat
Decreased threat
48
Key Risks
People and Culture
Culture excellence
Opportunity: The ability to maintain the systems,
symbols and behaviours that drive an agile,
innovative, and inclusive culture that embraces
diversity of thought.
Attracting and retaining talent and capability
Threat: The inability to attract and retain the
best talent to deliver the Company Strategy.
Health and Safety
Health and Safety
Threat: Occupational, process, aviation, heavy and
light vehicle interactions and other operational
risks including an underground explosion or fire,
geotechnical failure or underground hazardous
environment pose significant health and safety
risks to employees, partners, and community
including loss of life.
Opportunity: Consistently exceeding or meeting
our health and safety commitments can enhance
the Company’s reputation and working relations
across all our Stakeholders and contributes to
sustainable growth.
Tailings Storage Facilities (TSF) and Assets’
infrastructure integrity
Threat: The collapse of a TSF or other critical
infrastructure has the potential for creating an
extreme impact to all Stakeholders and to the
sustainability of the Asset.
Technology
Cyber security and data governance
Threat: Ability to access, manage and maintain
systems and respond to major incidents including
data loss, cyber security attacks or breaches to
information system or data privacy.
Potential Impacts
Strategic Controls and Responses
FY2020 Trend Analysis
Operational performance
Financial performance
Stakeholder support
and relations
Corporate knowledge
and experience
Company reputation
Health and safety
Social performance
Group reputation
Future financial performance
Stakeholder support
A strategic workforce planning approach across
all operations to identify and manage current and
future workforce requirements.
An inclusive culture that enables both cognitive
and demographic diversity and the innovation that
comes with it.
A strong and purpose-driven Employee Value
Proposition to attract and retain the best.
Agile performance management processes that
promote a culture of continuous development.
Professional and leadership development to enable
our people to do the best work of their careers.
Modern, flexible working arrangements that reflect
the future nature of work and promote wellbeing.
Regular employee engagement pulse checks and
an ongoing focus on culture.
Partnering with contractors and actively building
a shared health and safety culture.
Focus on elimination of drivers of health and safety
incidents through implementation of a program to
verify key controls.
Regularly review and audit health and safety
processes to improve control effectiveness.
Fostering a culture of reporting, investigating, and
sharing learnings from health and safety incidents.
Monitoring weekly health and safety performance.
Maintaining clear company performance standards,
including health, safety, and aviation.
Complying with applicable local laws and regulations
on health and safety.
Employees and family
Designing, constructing, maintaining, and monitoring
members
TSF and critical infrastructure and equipment.
Communities and
license to operate
Government and
environment
Group reputation
Financial Performance
and Asset value
Suppliers and customers
Independent TSF audits, reviews and inspection against
standards and the Australian National Committee of
Large Dams (ANCOLD) guidelines.
Periodic reviews of and revisions to management plans
and TSF manuals against operating specifications and
applicable standards/codes or guidelines.
Critical infrastructure and equipment maintenance
strategies and programs.
Skilled and experienced personnel.
ICT data security Process Standard.
Cyber security awareness and training program.
Security assessment and monitoring.
Crisis management plans and response.
Physical and system access controls.
Business continuity and disaster recovery plans.
Stakeholder support
and relations
Operational or commercial
disruption
Disclosure of commercial
or personal information
Corruption or loss of
system data
Health and safety incidents
caused by system failure
Loss of broader community
confidence
Financial losses
Group reputational damage
The Company’s cultural
excellence increased
as it continued to
embed the HWWT
principles that drive an
agile, innovative, and
inclusive culture and
enable diversity
of thought.
Notwithstanding our
efforts and the efforts
of local and national
governments where we
operate, the COVID-19
pandemic has
impacted some local
communities, increasing
the risk to the health,
safety, and wellbeing of
our workforce.
There are no changes
identified that are
expected to materially
change OZ Minerals’
level of exposure.
The Group’s exposure
to cybersecurity-related
events increased
in FY 2020 and is
expected to increase
further, primarily
due to our growing
reliance on technology
and the increasing
sophistication and
frequency of external
cyber-attacks.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 49
REMUNERATION
OVERVIEW AND
REPORT
reMUneration oVerVieW
51
LETTER FROM
THE CHAIRMAN
OF THE
PEOPLE AND
REMUNERATION
COMMITTEE
DEAR SHAREHOLDERS,
On behalf of the Board of Directors, I am
pleased to provide you with the 2020
Remuneration Report for OZ Minerals.
We are proud of the Company’s exceptional
performance in 2020 with strong financial,
operational and strategic outcomes
notwithstanding the unprecedented
challenges that the COVID-19 pandemic
presented. Highlights include:
our agile, innovative and collaborative
culture enabling us to quickly adapt to
remote and new ways of working to
ensure that our people, contractors,
suppliers and the communities in which
we work were safe whilst continuing
to deliver on challenging operational
budgets and strategic plans
Prominent Hill meeting production
targets and the underground mine
demonstrating a 4 Mtpa run rate, whilst
reducing unit costs from $95/t to $85/t;
with an expansion study demonstrating
the viability of a shaft haulage system to
access deeper ore enabling an increase in
underground production and an extended
mine life
Carrapateena meeting production targets
and safely completing the successful
ramp up to its 4.25 Mtpa run rate ahead
of plan and without compromise to the
sub-level cave performance; and a PFS
demonstrating a material value uplift
through a block cave expansion which
will increase production to 12 Mtpa and
significantly extend mine life
acquisition of our West Musgrave
Joint Venture partner, Cassini, and a
25 per cent increase in NPV of the
West Musgrave Project to circa
$1.0 billion, reflecting a PFS update
which indicates a 12 Mtpa mine versus
previous projections of 10 Mtpa whilst
maintaining the same mine life
first ore trucked from Pedra Branca to
the Carajás East Hub and maintaining
continuity of operations in Brazil whilst
managing the high concentration of
COVID-19; encouraging early drilling
results received at Paes Carvalho and
Santa Lúcia
completion of the 270 km power
transmission line to Prominent Hill via
Carrapateena providing sufficient power
for all new future regional expansions
exceeding original budget expectations
for metal production and group financial
results (after adjustment for currency and
metal prices), with a strong net profit after
tax result of $212.6 million.
The value created for Shareholders in
2020 included an annual share price
increase of 79 per cent and dividends
of 25 cents per share.
REMUNERATION OUTCOMES
IN 2020
We believe the remuneration outcomes
for 2020 are a good reflection of the
Company performance and are aligned
with the experience of shareholders.
Key remuneration outcomes for 2020:
Executives’ salaries were increased as
communicated in last year’s report, in line
with our remuneration philosophy and
supported by market data.
Strong performance outlined above and
in the Annual and Sustainability Report
resulted in a Corporate Performance score
of 4.2 out of 5. The details can be found
in Section 3.2 (Table 6).
Strong corporate and individual
performances resulted in the award to
the CEO, Andrew Cole, of 88.3 per cent
of his maximum short term incentive (STI)
opportunity; to the CFO, Warrick Ranson,
of 88.0 per cent; and to CCO, Mark Irwin,
of 87.3 per cent. 30 per cent of the
STI will be paid in performance rights
vesting after two years. STI outcomes are
calculated after adjusting, where relevant,
for the impact of changes in metal prices
and currencies so that Executives do not
receive windfall gains or losses for market
related movements. Details can be found
in Section 3.2 (Table 7).
The 2018 long term incentive (LTI) plan
vested at 100 per cent in December 2020
following strong relative performance of
the Company and strong absolute share
price performance over the three year
performance period. This resulted in the
vesting of 130,285 performance rights for
Andrew Cole; 51,300 for Warrick Ranson;
and 51,300 for Mark Irwin. Details can be
found in Section 3.3 (Table 10).
STAKEHOLDER VALUE CREATION
Our focus on value creation across all
five Stakeholder groups – shareholders,
government, communities, employees and
suppliers – is a key differentiator for
OZ Minerals and has been at the core of
our Strategy since 2015. It is described
more fully in the Governance section. We
believe that we cannot create sustainable
value for shareholders unless we also deliver
accretive value for our other Stakeholders
concurrently and in a complementary way.
We create financial value for shareholders
by building the current and future income
streams of the Company. We generate
current income through the cost-efficient
production and sale of concentrate from
our operating mines. We build longer
term value through creation of sustainable
future income streams through the
identification of additional resources at our
current operations and in new projects,
by developing deliverable plans for their
profitable extraction and ultimately by their
successful delivery and commissioning.
52
(a) Mr Irwin had a fixed remuneration review
to $579,000 in September 2020
Note: Letter from the Chairman of People &
Remuneration Committee is unaudited.
At the same time, we create value
for our other Stakeholders in various
complementary ways, for example, by
reducing our environmental impact; by
working respectfully with traditional owners
of the lands on which we operate to protect
their heritage and achieve their ambitions
for their communities; by creating local
employment opportunities; using local
suppliers; and supporting our employees
in their leadership development and
work-life plans.
For 2021 we will further embed our focus
on Stakeholder Value Creation in the way
we set our key performance indicators
(KPIs) for STI awards for senior executives.
We will move from KPIs to Stakeholder
Value Creation Metrics and hold ourselves
accountable for their achievement. Whilst
not all the metrics will be financial in
nature, all ultimately impact our financial
performance. We will provide further
transparency with our goals and our
performance against those goals in
our 2021 Remuneration Report.
REMUNERATION
CHANGES FOR 2021
Other than the evolution of the approach
to the measurement of performance for
STI purposes outlined above, no changes are
proposed to the remuneration framework
for Executives in 2021. The Committee will
continue to monitor whether the changes
made in previous years are creating value
and driving the right performance and
cultural outcomes ahead of any further
amendments.
Following a benchmarking review of
executive salaries against our stated
remuneration positioning, the Board
resolved:
to increase the fixed remuneration of
CEO, Andrew Cole, from $900,000 to
$1,000,000 to bring him in line with
peers of local and international mining
companies of similar scale and complexity
to increase the fixed remuneration of the
CFO, Warrick Ranson, from $579,000 to
$610,000 and of the CCO, Mark Irwin,
from $559,000(a) to $600,000; both
increases reflecting the critical role they
play in value creation for the Company
and their depth of expertise and talent
at this important time in the Company’s
growth.
Further, in accordance with our
remuneration framework in 2021,
key management personnel (KMP) will
be issued performance rights under a
2021–23 LTI scheme.
As foreshadowed in our Remuneration
Report last year, during the year, we
undertook an independent review of Board
fees. Following that review the Board
determined that Board Chairman fees
and Directors fees, which have not been
increased since 2018, will be increased by
9 per cent and 5 per cent respectively.
People and Sustainability Committee Fees will
increase by 5 per cent with no adjustment
to Audit Committee fees. Changes to Board
Fees and KMP remuneration took effect from
1 January 2021.
The LTI scheme rules require the comparator
group used to calculate the relative total
shareholder return (TSR) to be reviewed
annually for relevance. Following the review,
two companies (Taseko Mines Limited and
Central Asia Metals Plc) will be removed
from the comparator group for the
2021–23 LTI scheme and replaced with one
new company (Nickel Mines) taking the
total comparator group to 14 companies.
Finally, with effect from the 2019 LTI scheme
and as previously advised, AISCs will form
part of the measure for determining the
vesting of LTI rights. Following a review of
data providers, it has been decided to utilise
the global rankings measured by CRU as the
basis for determining relative performance.
CRU’s global copper mine database and
their ranking methodology is considered a
more comprehensive and aligned measure.
Whilst a challenging year in many respects,
we are pleased that our commitment to
value creation yielded strong returns for
shareholders and other Stakeholders. We
remain committed to the remuneration
framework, believing that it is working
in the interests of the Company and
shareholders. It is driving performance and
behaviors that we are proud of and creating
value in both the short and long term.
Thank you for your ongoing support of
OZ Minerals.
Tonianne Dwyer
Chairman
People & Remuneration Committee
18 February 2021
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 53
5454
REMUNERATION
OVERVIEW
REMUNERATION TO EXECUTIVE KEY MANAGEMENT PERSONNEL
IN 2020
Full details of the audited cost to the Company of Executive KMP remuneration,
calculated in accordance with the accounting standards and the Corporations Act 2001,
are available in Table 12 of the Remuneration Report (page 67).
The table below (unaudited) which includes details of remuneration actually delivered
to Executive KMP in 2020, has been prepared to be transparent with our shareholders
regarding remuneration outcomes.
The uplift in the KMP remuneration received in 2020 is predominantly driven by the value
of shares that vested through the 2018 Long Term Incentive Scheme. This outcome reflected
the strong performance of the Company and the doubling of the share price over the three
year period. Shareholders who were invested with the Company over that period have
experienced the same share price growth.
Cash salary
Paid short
term
incentives(a)
Vesting
long term
incentives(b)
Contributed
super-
annuation(c)
Total
remuneration
$
878,652
829,233
557,652
544,233
544,319
501,002
$
$
834,435
2,429,197
621,688
1,453,605
356,664
318,378
353,625
284,830
956,496
122,345
956,496
122,345
$
21,348
20,767
21,348
20,767
21,348
20,767
$
4,163,632
2,925,293
1,892,160
1,005,723
1,875,788
928,944
Andrew Cole
Managing Director and
CEO
Warrick Ranson
Chief Financial Officer
Mark Irwin
Chief Commercial
Officer
2020
2019
2020
2019
2020
2019
(a) This amount represents 70 per cent of total STI which was paid in cash for 2020. In addition, 30 per cent of total STI will be
granted in performance rights, which vest after 2 years provided certain conditions are satisfied (refer Section 3.2). 18,029
performance rights will be awarded to Andrew Cole, 7,706 to Warrick Ranson and 7,641 to Mark Irwin.
(b) The value of the long term incentives which vested during the year is calculated by multiplying the number of performance
rights vested by the volume weighted average price (VWAP) of $18.64 over the period 2 December to 31 December 2020. On
31 December 2020, the 2018 LTI plan vested resulting in the award of 130,285 shares to Andrew Cole (see Section 3.3) and
51,300 shares to each of Warrick Ranson and Mark Irwin. The performance rights were awarded on the basis of a VWAP (5
trade days from 2 to 8 January 2018) share price of $9.21. The VWAP 20 trade days from 2 to 31 December 2020 at vesting of
$18.64 demonstrates an increase of 102.4 per cent over the 3 year vesting period.
(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 included in cash salary.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS 55
5656
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 2020. 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 KMP during 2020 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 aLL of 2020
Executive KMP
Andrew Cole
Warrick Ranson
Mark Irwin
Non-executive Directors
Rebecca McGrath
Charles Sartain
Peter Wasow
Richard Seville
Tonianne Dwyer
Position
Managing Director and CEO
Chief Financial Officer
Chief Commercial Officer
Independent Chairman
Independent NED
Independent NED
Independent NED
Independent NED
2.0 REMUNERATION STRATEGY
2.1 Remuneration Philosophy
OZ Minerals seeks to attract and retain high performing Executives and incentivise them
to outperform. Our approach to remuneration is to provide Executives with a market
competitive fixed remuneration and to reward outperformance through performance-linked,
‘at risk’ remuneration. Accordingly, we seek to position the fixed remuneration of our
Executives at around the market median of relevant benchmarks, with the opportunity
to earn upper quartile total remuneration for delivering outperformance.
2.2 Remuneration Principles
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 build value for all our Stakeholders with ‘Creating
Shared Value’ at the heart of the OZ Minerals Strategy.
taBLe 2 – reMUneration PrinCiPLes
Business needs
and market
alignment
OZ Minerals’ remuneration framework is focused on achieving our corporate objectives.
Remuneration is set with regard to market practices and structured so that outcomes are
aligned with stakeholder value creation.
Simplicity
and equity
Performance
and reward
linkages
Market
positioning and
remuneration
mix
OZ Minerals’ remuneration philosophy, principles and framework are simple to understand,
communicate and implement, and are equitable across the Company and its diverse workforce.
A well-designed remuneration framework 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 into account the
challenges of attracting and retaining high performers in business critical roles, particularly in
the mining industry. The ‘at-risk’ components of remuneration are based on challenging goals
designed to incentivise Executives to achieve business critical objectives and create stakeholder
value including shareholder returns. A substantial portion of remuneration is paid in equity and
‘locked in’ to encourage focus on long term outcomes.
Talent
management
Remuneration framework 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 practices that promote
the creation of shared value for Stakeholders. We openly communicate these practices to
shareholders and other relevant Stakeholders, and will always be within legal, regulatory and
industry requirements. The Board has absolute discretion to develop, implement and review all
aspects of remuneration.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS reMUneration rePort
57
2.3 Remuneration framework
The OZ Minerals Remuneration Framework aims to attract great people to deliver the
OZ Minerals Strategy, offering a fixed and variable (at-risk) pay that incentivises both short
term and long term performance.
Element
Structure
Performance Measures
Total Fixed
Remuneration
(TFR)
Base cash salary
and superannuation.
TFR is determined based on
factors including external market
benchmarking, relativity to peers
and individual performance.
Short Term
Incentive (STI)
Mix of 70 per cent
cash and 30 per cent
performance rights,
with a two-year vesting
period.
STI is determined based on
performance against challenging,
clearly defined and measurable
corporate and individual targets.
Long Term
Incentive (LTI)
Performance rights
with a three-year
vesting period subject
to an additional
two-year holding
lock period.
LTI is assessed against TSR
70 per cent and AISC 30 per cent.
Link to delivery of corporate
Strategy
Fixed remuneration is set at a
competitive level and positioned
at market median to take into account
the challenges of attracting and
retaining high performers in business
critical roles.
The short term ‘at-risk’ component
of remuneration is focused on
incentivising Executives to achieve
business critical objectives and
demonstrate OZ Minerals’ desired
ways of working.
The long term ‘at-risk’ component of
remuneration rewards the delivery of
shareholder returns and a sustainable
business whilst encouraging decision
making aligned to long term
shareholder value creation.
Minimum
Shareholding
Requirements
(MSR)
All Executives are expected to accumulate and hold a
minimum level of vested shares in OZ Minerals over
a reasonable period. There are different shareholding
requirements for each level of management, which are
expressed as a percentage of their TFR.
This requirement increases the sense
of ownership of the Company amongst
our Executives and enhances the degree
to which our reward arrangements align
the interests of our Executives.
2.4 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 ensures that Executive KMP remuneration remains consistent with the Company’s
remuneration framework and guiding principles, and considers:
the Company’s remuneration philosophy
relevant market benchmarks using salary survey data from the Australian and Brazilian
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 expectations, set objectives, leadership behaviors
and development plans
Company Strategy, business plans and budgets.
2.5 Executive KMP remuneration components
2.5.1 Remuneration mix
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 ‘at target’ and ‘at
maximum’ at-risk remuneration is earned, the ratios of fixed to at-risk remuneration for
KMP would be as follows.
2020 exeCUtiVe KMP reMUneration Mix(a)
Mix at target:
Managing Director and CEO
28%
30%
42%
Chief Financial Officer
Chief Commercial Officer
Mix at maximum:
38%
39%
Managing Director and CEO
24%
38%
Chief Financial Officer
Chief Commercial Officer
34%
34%
Fixed
STI
LTI
(a) Service and performance conditions apply to STI and LTI.
27%
27%
34%
35%
35%
34%
38%
32%
31%
58
2.5.2 Total fixed remuneration (TFR)
What is included in
total fixed remuneration?
When and how is fixed
remuneration reviewed?
An Executive KMP’s total fixed remuneration comprises salary and certain other benefits (including statutory
superannuation contributions) that may be taken in an agreed form, 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
from the People & Remuneration Committee. During the year, we updated the market benchmarking of
executive remuneration conducted last year, 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 the 50th percentile.
Changes from last year?
No changes to our approach to determine fixed remuneration were implemented in 2020 and none are
proposed for 2021. 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.
2.5.3 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 this plan is to make a large proportion of the total 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 which deliver the Company’s Strategy. A reward structure that provides variable performance-
based remuneration is also a necessary component of a competitive remuneration package in the Australian
and global marketplace for executives.
What are the performance
conditions?
The performance conditions that determined STI outcomes in 2020 were: (a) Company KPIs, (b) Individual
KPIs and (c) HWWT principles.
The Company KPIs in 2020 determined 80 per cent of the STI award for the Managing Director and CEO with
individual KPIs determining the balance of 20 per cent. The Company KPIs determined 50 per cent of the STI
award for the remaining KMP with the balance determined by attainment of individual KPIs (25 per cent) and
the demonstration of behaviors exemplifying the Company’s HWWT principles (25 per cent).
taBLe 3.1 – KeY PerforManCe indiCators in 2020 that aPPLied to Managing direCtor and Ceo
Description
% Weighting STI
Company KPIs
Operational and financial
EBITDA, metal recoveries, capital allocation
Strategy and growth
Increase in total base case values, increase in total growth case value, GHG reduction strategies, embed The OZWay
Sustainability
Individual KPIs
Lean and Innovative
Safety improvement, culture, leadership effectiveness
Implement agreed actions from 2019 Board Review to improve overall Board-Management effectiveness
and overall Company governance
HWWT
Focus on Capability and Capacity and continue to embed HWWT in the Company
Devolve and Agile
Lead the embedding of The OZWay, Purpose, Standards and Risk system across the Company including Brazil
HWWT
The How We Work Together
principles are the same for all
Executive KMP and they are based
on the following elements:
Total
Thinking and acting differently
Building a culture of respect that enables our people to succeed
Focusing on partnerships and collaboration, not hierarchy
Delivering superior results through effective planning and agile deployment
Doing what we say we will do and taking action
Acting with integrity and engaging with our Stakeholders.
80
32
32
16
10
2.5
5
2.5
10
10
100
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT reMUneration rePort
59
taBLe 3.2 – KeY PerforManCe indiCators in 2020 that aPPLied to other exeCUtiVe KMP
Description
CFO
CCO
% Weighting STI
Company KPIs
Operational and financial
EBITDA, metal recoveries, capital allocation.
Strategy and growth
Increase in total base case value, increase in total growth case value, GHG reduction strategies, embed The OZWay.
Sustainability
Individual KPIs
Operational and financial
Strategy and growth
Sustainability
HWWT
The How We Work Together
principles are the same for all
Executive KMP and they are based
on the following elements:
Total
Safety improvement, culture, leadership effectiveness.
Deliver the 2020 Plan and Budget as per plan, secure
an effective power contract for the Australian Assets,
evolve our capital allocation and investment framework,
establish a platform for supporting appropriate levels
of further growth.
Contribute to TSR performance through activities
such as the enhancement of our Strategy; driving
blue sky thinking; proactive investor engagement;
and the implementation of rolling forecasts.
Deliver the 2020 Plan and Budget as per plan, manage
exploration to budget, and drive delivery of Carrapateena
expansion and West Musgrave Feasibility Study projects.
Improve value of Carrapateena expansion and
West Musgrave studies, improve exploration efficiency,
and develop and implement revised exploration strategy.
Safety improvement, culture, leadership effectiveness
Safety improvement, culture, leadership effectiveness.
Thinking and acting differently
Building a culture of respect that enables our people to succeed
Focusing on partnerships and collaboration, not hierarchy
Delivering superior results through effective planning and agile deployment
Doing what we say we will do and taking action
Acting with integrity and engaging with our Stakeholders.
50
20
20
10
25
10
11.25
3.75
25
25
100
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 any point in between threshold and maximum
performance levels.
Threshold performance represents the minimum level of performance required for an STI award
to be paid.
What is the value of
the STI opportunity?
How is STI assessed?
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.
taBLe 3.3 – the target and MaxiMUM sti reWard oPPortUnitY for exeCUtiVe KMP in 2020
Executive KMP
Andrew Cole
Warrick Ranson
Mark Irwin
STI at target
as % of TFR
Maximum STI
as % of TFR
STI at target
Value $
Maximum STI
Value $
105
70
70
150
100
100
945,000
405,300
405,300
1,350,000
579,000
579,000
The Managing Director and CEO assesses the performance of each Executive KMP throughout the year for
achievement against their personal performance targets and objectives, 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 other 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 his direct reports and the day-to-day functioning 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.
60
What happens to STI awards
when an Executive ceases
employment?
If an Executive leaves OZ Minerals then the Good Leaver rules 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. If an Executive leaves as a Good Leaver, performance rights unvested remain on foot to
vest in the normal course.
How is the STI settled?
70 per cent of STI is paid in cash and 30 per cent of STI awarded in performance rights which vest, subject
to fulfillment of conditions, two years after award.
Have the arrangements
changed from last year?
No.
2.5.4 Long term incentive (LTI)
Why does the Board consider
an LTI plan to be appropriate?
How is the award delivered?
Was a grant made in 2020?
What was the value
of the 2020 grant for
Executive KMP?
The Board believes that an LTI plan can:
focus and motivate Executives to achieve longer term outperformance outcomes
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 Executives, aligning them with shareholders by
linking a substantial portion of their potential total reward to OZ Minerals’ shareholder returns.
The LTI is granted using performance rights under the OZ Minerals LTI Plan (detailed below). The
performance rights have a three-year performance period. Post vesting they are subject to a two-year
holding lock period.
A grant was made to all continuing participants in the LTI plan (Table 10, page 66), including the Managing
Director and CEO. Using a face value approach, the number of performance rights granted to each
Executive was calculated as their LTI dollar opportunity divided by the adjusted twenty-day volume weighted
average price (VWAP) of OZ Minerals as at the start of the performance period of $10.52. The performance
period for the 2020 LTI grant is 1 January 2020 to 31 December 2022.
taBLe 3.4 – the Lti grant to exeCUtiVe KMP in 2020
Executive KMP
2020 LTI grant as % of TFR
2020 LTI grant allocation value $
2020 LTI grant number of rights
Andrew Cole
Warrick Ranson
Mark Irwin
150
90
90
1,350,000
521,100
503,100
128,287
49,519
47,808
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT reMUneration rePort
61
What are the performance
conditions?
The two performance conditions, referred to as the vesting conditions are: (a) OZ Minerals meeting the LTI
performance conditions; and (b) the Executive KMP meeting the service condition.
Performance conditions
The LTI plan performance conditions for 2020 are the same from 2019 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 measure because it ensures that a proportion of each
participant’s remuneration is linked to Value Creation and that participants only receive a benefit where
there is a corresponding direct benefit to our shareholders as reflected in the relative share price.
TSR reflects benefits received by shareholders through share price growth and dividend yield and it is
the most widely used long term incentive measure 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 3.5 – PerforManCe rights Vesting 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
Nil
50%
Between 50th percentile and 75th percentile
Straight line vesting between 50% and 100%
75th percentile or above
100%
The TSR performance hurdle accounts for 70 per cent of the LTI award. Grants in 2018 and 2019 were
subject to the same conditions set out in the table above.
2. All-In Sustaining Costs (AISC)
AISC is an industry accepted measure of the total operating cost of producing a unit of metal.
Comparative data will be sourced from CRU’s global copper mine database. The annual AISC performance
will be recalculated across the full three-year period (total three-year absolute costs divided by total three-
year copper metal production). The comparison will be to the average published AISC benchmark across
that same period.
Performance in relation to this hurdle will be measured over the three-year performance period and will vest
in accordance with the following table.
taBLe 3.6 – PerforManCe rights Vesting aCCording to aLL-in sUstaining Costs
TSR of OZ Minerals AISC over the performance period
Proportion of performance rights that vest
Above 50th percentile
50th percentile
Nil
50%
Between 50th percentile and 25th percentile (Lowest cost)
Straight line vesting between 50% and 100%
25th percentile or below
100%
The AISC hurdle accounts for 30 per cent of the LTI award. Prior to 2019, 30 per cent of the LTI award
was subject to absolute share price growth over the performance period. Growth of 20 per cent or greater
results in 100 per cent vesting. No rights vest at less than 20 per cent.
Service condition
In general, if executives cease employment as a ‘good leaver’ prior to vesting of their rights at the end of
the performance period, a pro rata portion of their rights, having regard to the portion of the performance
period that has elapsed, will continue on foot and be subject to their original terms as though they had not
ceased employment. Any remaining rights will lapse immediately. Their shares still subject to a holding lock,
will continue on foot and be subject to their original terms as though they had not ceased employment.
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 returns for shareholders.
Why were the performance
conditions chosen?
62
What is the comparator
group?
The comparator companies selected for the 2020 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 3.7 – 2020 Long terM inCentiVe PLan CoMParator CoMPanies
Comparator company
HudBay Minerals Inc.
KAZ Minerals Plc
Lundin Mining Corporation
Sandfire Resources NL
Taseko Mines Limited
Independence Group
First Quantum Minerals
Antofagasta Plc
Freeport McMoran
Central Asia Metals Plc
Jiangxi Copper Company
KGHM Polska
Zijin Mining Group
Ero Copper Corp
Boliden AB
Exchange
ASX/ticker code
TSX
LSE
TSX
ASX
TSX
ASX
TSX
LSE
NYSE
AIM
SHH
WSE
SHH
TOR
STO
HBM
KAZ
LUN
SFR
TKO
IGO
FM
ANTO
FCX
CAML
600362
KGH
601899
ERO
BOL
What happens to performance
rights granted under the
LTI 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 the Executive’s performance rights, calculated by reference to the portion of the performance
period that has elapsed, will remain on foot. If and when these performance rights vest, shares will be
allocated (or a cash equivalent amount will be paid) in accordance with OZ Minerals’ Equity Incentive Plan
Rules and any other conditions of grant.
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.
Is there any ability for
the Company to ‘clawback’
LTI awards?
In the event of fraud, dishonesty, gross misconduct or material misstatement of the financial statements,
the Board may make a determination 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.
Does the Company have a
policy in relation to margin
loans and hedging at risk
remuneration?
The Board can also adjust awards granted under the STI or LTI plans in the event that there is a catastrophic
safety, environmental, or other event, in which an adjustment is warranted.
Under the Company’s Securities Trading requirements, 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.
Have the arrangements
changed from last year?
No.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT reMUneration rePort
63
2.5.5 Minimum shareholding requirement
All Executives and certain senior management are expected to accumulate and hold a minimum level of vested shares in OZ Minerals over a
reasonable period. Table 3.8 shows the extent of compliance.
taBLe 3.8 – MiniMUM sharehoLding reQUireMents for KMP in 2020(a)
Executive KMP
Andrew Cole
Warrick Ranson
Mark Irwin
Shareholding requirement (% TFR)
Shareholding (% TFR)(b)
100
50
50
1,328
247
246
(a) Information at 31 December 2020 based on share price at that date. With expected levels of vesting of the deferred equity element of the STI and LTI, it is anticipated that all Executive KMP should
meet their minimum shareholding requirement within the required timeframe.
(b) Includes shares owned and vested and exercisable performance rights and performance rights awarded where vesting is only contingent on a service condition being satisfied.
2.6 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.
Protocols
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 2020, EY was engaged to undertake market benchmarking for the CEO’s remuneration and Guerdon Associates to undertake the
market benchmarking for the NEDs. Their analysis was considered by the People & 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 fees for work conducted was respectively $10,000 and $26,542 (excluding GST).
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 4 – CoMPanY PerforManCe (a)
Measure
Underlying EBITDA – $ million
Net profit after income tax – $ million
Net cash inflow from operating activities – $ million
Basic earnings per share – cents
Share price at end of year – $
Dividend per share – cents
Total Shareholder Return – %(b)
Relative Total Shareholder Return – Quartile(c)
All-In Sustaining Cost – ‘USc/lb’(d)
All-In Sustaining Cost – Quartile(e)
2020
606.3
212.6
550.4
65.2
18.9
23.0
78.9
Q1
56.9
Q1
2019
462.4
163.9
510.6
50.7
10.6
23
26.2
Q1
111.0
Q1
2018
540.4
222.4
449.6
71.5
8.8
23
5.1
Q1/Q2(f)
117.7
Q1
2017
539.4
231.1
342.9
77.4
9.2
20
7.6
Q1
119.9
Q1
2016
373.8
107.8
324.1
35.7
7.9
20
111.2
Q1
N/A(g)
N/A(g)
(a) Refer to the Financial Review section (page 36) in the Directors’ Report for a commentary on the consolidated results, including underlying performance of the Consolidated Entity.
(b) Absolute TSR in the year.
(c) Quartile position TSR in relevant comparator group for the three-year performance period ending in that year.
(d) Absolute AISC in the year.
(e) Quartile position AISC in the year as determined by data sourced from CRU.
(f) Reflects the quartile position for 2015 LTI (Q1) and 2016 LTI (Q2) plans.
(g) AISC data was not tracked in 2016.
64
taBLe 5 – at risK reMUneration PerforManCe
Measure
STI(a)
LTI(b)
(a) % of available STI achieved based on Company scorecard results not individual KMP performance.
(b) % LTI plan vested.
(c) % reflects vesting of 2015 LTI (100%) and 2016 LTI (88.3%) plans.
2020
%
88.0
100.0
2019
%
76.6
100.0
2018
%
83.5
94.2(c)
2017
%
83.5
100.0
2016
%
88.0
100.0
3.2 Company performance and STI outcomes for 2020
The Board assessed the Company’s performance in 2020 against the enterprise level KPIs and assessed performance at 4.2 out of 5.
Key deliverables in 2020:
2020 production and costs achieved on guidance that was upgraded during the year – copper guidance met for a sixth successive year.
Carrapateena ramp-up to 4.25 Mtpa completed within 12 months, ~6 months earlier than originally planned; Carrapateena Block Cave
Expansion proceeding.
Prominent Hill now sustaining annualised mining rates above 4 Mtpa.
Strong growth pipeline advances with Prominent Hill Expansion Study Update and West Musgrave in the next study phase.
Carajás East Hub progressing with Pedra Branca supplementing Antas ore supply.
Further evolved OZ Minerals’ way of working, The OZWay, our culture and embedding of stakeholder value creation.
FY revenue of $1.3 billion with a closing net cash position of $32 million (unaudited) after growth investments.
Annual Company TRIF of 5.29 compared with 6.27 in 2019.
taBLe 6 – 2020 sUMMarY CoMPanY KPi PerforManCe
Performance
not achieved
0%
Threshold
Performance
50%
Target
Performance
70%
Maximum
Performance
100%
1
2
3
4
5
Measure
Weighting Link to Strategy
Target KPI
Financial
40%
Lean & Innovative
EBITDA as per plan(a)
Metal volumes(b)
Investing Responsibly Capital allocation
Outcome
Exceeded
Exceeded
Exceeded
Strategy
& Growth
40%
Value Creation
Increase in total base case value(c)
Exceeded
Global Copper
Increase in total growth case value
Exceeded
Investing Responsibly GHG reduction strategies
Devolved & Agile
Embed The OZWay
Sustainability
20%
How We Work
Together
Reduced TRIFR(d)
Improved cultural measures
Uplift in people and leadership
development
100%
Company KPI Performance
Exceeded
Exceeded
Exceeded
Exceeded
Exceeded
Exceeded
(a) EBITDA of $606 million exceeded the Plan EBITDA target, after flexing for commodity price and exchange, of $557 million (9 per cent above the target).
(b) Metal volumes: Prominent Hill achieved full year underground production of 3.9 Mt ore whilst reducing unit costs and Carrapateena achieved its full year production of 2.93 Mt with a strong
ramp up performance to 4.25 Mtpa from initial production early in the year. We assess this on CuEq basis. The criteria was ‘produce Plan volumes and achieve Carrapateena ramp up’ – which we
exceeded.
(c) Value creation in base and growth cases delivered across the business included: Prominent Hill commenced uplifting production from a 4 Mtpa Base Case to 4–5 Mtpa by 2022 through study for
shaft haulage; Carrapateena has delivered an extremely strong, world-leading ramp-up and building long term value through expansion study which will expand production through a block cave to
12 Mtpa; Pedra Branca decline progressed and first ore processed; and West Musgrave uplifted project value with the acquisition of Cassini Resources and an update of its initial study results which
saw an uplift in NPV to $1.0 billion. The market reflected the increase in value of the assets of the business through an increase in the share price over the year.
(d) The initial TRIF target of 5.50 improved 3.8 per cent, achieving a final TRIF of 5.29 on a rolling 12 month basis.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT reMUneration rePort
65
taBLe 7 – sti aWard PerCentage for exeCUtiVe KMP
In accordance with the procedure set out in Section 2.5.3, an assessment was undertaken of the performance of each of the eligible
Executive KMP against their 2020 KPIs. Individual KPIs reflect strategic business objectives and deliverables in an individual’s area of direct
accountability and leadership of operational, financial, strategic and sustainability initiatives across their teams and the Company as a whole
(Table 3.1, page 59 and Table 3.2, page 60).
Executive KMP
Current
Andrew Cole
Warrick Ranson
Mark Irwin
Company KPI performance(a) as per
cent of maximum performance
%
Individual KPI performance as per
cent of maximum performance
%
Overall performance outcome as per
cent of maximum performance
%
88.0
88.0
88.0
89.7
88.0
86.5
88.3
88.0
87.3
(a) Andrew Cole’s STI composition is 80 per cent Company and 20 per cent Individual. Remaining KMP are 50 per cent Company, 25 per cent Individual and 25 per cent HWWT.
taBLe 8 – sti PaYMents to exeCUtiVe KMP in 2020
Name
Andrew Cole
Warrick Ranson
Mark Irwin
Maximum
potential value of
payment(a)
$
Per cent of
maximum grant
awarded
%
Per cent of
maximum grant
forfeited
%
Payment
$
Cash Payment
(70%)
$
Performance
Rights granted
(30%)
$
1,192,050
1,350,000
509,520
505,178
579,000
579,000
88.3
88.0
87.3
11.7
12.0
12.7
834,435
356,664
353,625
357,615
152,856
151,553
(a) The minimum potential value of the payments was nil. The maximum potential value of payment represents the achievement of stretch target.
taBLe 9 – 30 Per Cent sti aWards on foot
Current
Andrew Cole
Warrick Ranson
Mark Irwin
Year
2020
2019
2020
2019
2020
2019
STI $
Performance
Rights(a)
Service period
Expiry date Vesting outcome
357,615
266,437
152,856
136,447
151,553
122,070
18,029
25,327
7,706
12,970
7,641
11,604
01/01/2020 – 31/12/2022
15/02/23
To be determined
01/01/2019 – 31/12/2021
15/02/22
To be determined
01/01/2020 – 31/12/2022
15/02/23
To be determined
01/01/2019 – 31/12/2021
15/02/22
To be determined
01/01/2020 – 31/12/2022
15/02/23
To be determined
01/01/2019 – 31/12/2021
15/02/22
To be determined
(a) The number of rights were calculated by dividing 30 per cent of STI by $19.84 being the VWAP over the period 2 January to 30 January 2021.
66
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 conditions for grants
before 2019 are the relative TSR performance consistent with the details in Table 3.5 and absolute share price growth of the Company
over the relevant performance period as detailed beneath Table 3.6. For 2018 LTI the TSR was assessed independently at 92.3 per cent
and absolute share price had an increase of 121.01 per cent, resulting in full vesting of the Plan. For grants from 2019 onwards the
vesting conditions are the relative TSR and AISC performance. In general, if executives cease employment as a ‘good leaver’ prior to vesting
of their rights at the end of the performance period, a pro rata portion of their rights, having regard to the portion of the performance
period that has elapsed, will continue on foot and be subject to their original terms as though they had not ceased employment. Any
remaining rights will lapse immediately. Their shares still subject to a holding lock, will continue on foot and be subject to their original terms
as though they had not ceased employment. 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 17.
Additional details are set out in Note 13 to the Financial Statements.
The LTI awards history are detailed below:
taBLe 10 – Lti aWards
Grant date
Rights
Maximum value
of grant(a)
$
Weighted
average fair
value(b)
$
Current
Andrew Cole
17 April 2020
29 May 2019
24 April 2018
24 July 2017
Warrick Ranson
24 February 2020
29 May 2019
13 March 2018
6 February 2018
Mark Irwin
24 February 2020
29 May 2019
13 March 2018
6 February 2018
128,287
138,270
130,285
135,446
49,519
55,145
11,400(c)
51,300
47,808
53,193
11,400(c)
51,300
2,532,385
1,595,636
1,390,141
1,353,106
977,505
636,373
121,638
547,371
943,730
613,847
121,638
547,371
6.73
6.92
5.87
4.29
6.71
6.92
8.81
6.03
6.71
6.92
8.81
6.03
Performance period
Expiry date(d) Vesting outcome
1/01/2020 – 31/12/2022
15/02/23
To be determined
1/01/2019 – 31/12/2021
15/02/22
To be determined
1/01/2018 – 31/12/2020
15/02/21
100% vested
1/01/2017 – 31/12/2019
15/02/20
100% vested
1/01/2020 – 31/12/2022
15/02/23
To be determined
1/01/2019 – 31/12/2021
15/02/22
To be determined
1/01/2018 – 31/12/2019
15/02/20
100% vested
1/01/2018 – 31/12/2020
15/02/21
100% vested
1/01/2020 – 31/12/2022
15/02/23
To be determined
1/01/2019 – 31/12/2021
15/02/22
To be determined
1/01/2018 – 31/12/2019
15/02/20
100% vested
1/01/2018 – 31/12/2020
15/02/21
100% 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 weighted average fair values were calculated proportional to the fair value of each hurdle in the plan. 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) Performance rights granted under the 2018 alignment plan were a one off allocation for retention purposes.
(d) Expiry date does not consider holding lock periods.
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 11 – exeCUtiVe KMP KeY ProVisions
Name
Current
Andrew Cole
Term of contract
2020 TFR $ Notice period
Termination benefit
Permanent – ongoing until notice
has been given by either party.
900,000
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.
Warrick Ranson
Permanent – ongoing until notice
has been given by either party.
Mark Irwin
Permanent – ongoing until notice
has been given by either party.
579,000
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.
579,000
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.
Nine months fixed remuneration
in the case of termination by the
Company.
Nine months fixed remuneration
in the case of termination by the
Company.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT reMUneration rePort
67
5.0 Executive KMP remuneration
taBLe 12 – totaL reWards to exeCUtiVe KMP
Short term benefits
Long term benefits
Salary,
fees and
allowances
$
Accrued
annual
leave(a)
$
Super-
annuation(b)
$
Short term
incentive
(Cash
Payment)
$
Other
long term
benefits(c)
$
Value of
performance
rights(d)
$
Value of
performance
rights (STI
deferred)(e)
$
Total
remuneration
$
Performance
related
%
Current
Andrew Cole
Managing Director and CEO
Warrick Ranson
Chief Financial Officer
Mark Irwin
Chief Commercial Officer
2020
2019
2020
2019
2020
2019
878,652
829,233
557,652
544,233
544,319
501,002
16,674
21,224
18,628
41,799
5,822
3,307
21,348
20,767
21,348
20,767
21,348
20,767
834,435
621,688
356,664
318,378
353,625
284,830
892,270
208,017
2,858,417
40,369
36,175
14,155
825,368
345,295
9,339
289,250
11,556
336,948
6,076
285,022
88,812
96,434
45,482
91,208
40,690
2,443,267
1,410,176
1,269,248
1,364,826
1,141,694
67.7
62.9
56.6
51.5
57.3
53.5
(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) Represents direct contributions to superannuation funds. Amounts greater than the maximum superannuation level have been paid and included in cash salary.
(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) 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 as LTI and STI 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.
(e) The fair value of the deferred STI is recognised proportionally over the period the Executive is required to provide service.
6.0 NON-EXECUTIVE DIRECTOR REMUNERATION
6.1 Non-executive Director remuneration policy
NED remuneration is reviewed annually by the Board. NEDs receive a fixed remuneration consisting of a base fee 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 are
$2,700,000 in total.
taBLe 13 – detaiLs of ned reMUneration With effeCt froM sePteMBer 2018
Fees
Board base fee
Audit
Sustainability
People & Remuneration
Chairman
$ per annum
328,921
43,056
26,910
26,910
Member
$ per annum
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 13, 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.
68
6.2 Total fees paid to NEDs
In 2020, NEDs received $1,119,758 (2019: 1,017,201) in total fees, compared to the maximum approved fees payable of $2,700,000.
taBLe 14 – totaL reMUneration Paid to neds
Current
Rebecca McGrath
Chairman
Charles Sartain
Non-executive Director
Peter Wasow
Non-executive Director
Richard Seville
Non-executive Director
Tonianne Dwyer
Non-executive Director
Total
Board fees and
cash benefits
$
Committee
$
Superannuation
Fees(a)
$
Total fixed
remuneration
$
360,168
339,444
126,330
126,330
129,330
126,330
126,330
21,054
126,330
126,330
868,488
739,488
–
–
48,438
48,438
57,853
56,511
34,983
5,830
48,438
48,438
189,712
159,217
–
20,724
16,603
16,603
13,027
17,370
15,325
2,554
16,603
16,603
61,558
73,854
360,168
360,168
191,371
191,371
200,210
200,211
176,638
29,438
191,371
191,371
1,119,758
972,559
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019(b)
(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. Rebecca McGrath and Peter Wasow have Superannuation Guarantee Employer Shortfall Exemption Certificates in place to reduce their superannuation
liabilities with OZ Minerals.
(b) Total for 2019 reflects only the remuneration of 2020 NED Board members only.
6.3 Minimum shareholding requirements NED
NEDs are required to accumulate and maintain a holding in OZ Minerals’ shares that is equivalent to at least 100 per cent of the NED base
fee (calculated on the purchase price of shares) within five years from the date of appointment as a director or appointment as Chair.
taBLe 15 – MiniMUM sharehoLding reQUireMents ned in 2020(a)
NED
Rebecca McGrath
Charles Sartain
Peter Wasow
Richard Seville
Tonianne Dwyer
Current shareholding requirement
% Annual Base Fees
Shareholding
% Annual Fees(b)
100
100
100
100
100
104
504
137
74
118
Deadline
24/05/22
01/08/23
01/11/22
31/10/24
22/03/22
(a) Information at 31 December 2020.
(b) Calculated as amounts paid per share divided by the directors’ annual fees.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
reMUneration rePort
69
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 16 – neds and KMP sharehoLdings
Balance at 1 January 2020
or date becoming KMP
Shares acquired on
exercise of rights
Net other movements
Balance at 31 December 2020
or date ceasing to be KMP
Non-executive Directors
Current
Rebecca McGrath
Charles Sartain
Peter Wasow
Richard Seville
Tonianne Dwyer
Executive KMP
Current
Andrew Cole
Warrick Ranson
Mark Irwin
Total
42,835
70,000
14,000
–
15,000
342,100
–
1,000
484,935
–
–
–
–
–
135,446
11,400
11,400
158,246
9,457
10,000
6,000
11,580
4,900
–
–
–
41,937
52,292
80,000
20,000
11,580
19,900
477,546
11,400
12,400
685,118
taBLe 17 – KMP PerforManCe rights hoLdings
Balance at
1 January 2020
Granted as
remuneration(a)
$
Value of rights
granted(b)
$
Vested
Exercised
Value of rights
vested(c)
$
Balance at
31 December
2020
Vested and
exercisable(d)
Current
Andrew Cole
Warrick Ranson
Mark Irwin
Total
404,001
117,845
115,893
637,739
153,606
1,033,768
62,485
59,408
419,274
398,628
275,499
1,851,670
130,285
51,300
51,300
232,885
135,466
2,429,197
11,400
11,400
956,496
956,496
158,246
4,342,189
422,161
168,930
163,901
745,992
130,285
51,300
51,300
232,885
(a) Does not included performance rights from the 2020 STI that will be granted. Table 9 contains details of rights granted subsequent to year end.
(b) The fair value of the performance rights granted to Mr Cole on 17 April 2020 was calculated on the grant date as $6.73 and to other KMP on 24 February 2020 was calculated $6.71.
Subject to the achievement of relevant performance conditions, these rights would be expected to vest on 31 December 2022.
(c) Value of rights vested calculated as number of rights vested times VWAP over the period 2 December to 31 December 2020.
(d) Rights vested and exercisable are considered in the Balance at 31 December 2020. They represent rights which vested on 31 December 2020 for which shares are issued in early 2021.
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 favorable than arm’s length.
70
SUSTAINABILITY
REPORT
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
71
THEME
The sustainability section of this report is presented
around the theme of Creating Value for our
Stakeholders. Creating Value has long been at the
centre of OZ Minerals’ Strategy. However, this year
we have developed a set of Stakeholder Value Creation
Metrics to enable assessment of our performance. The
Metrics provide transparency for our Stakeholders as
to what we are measuring and how we are performing.
They set the priorities and drive performance and
behaviour within the Company.
FORMAT
We have been reporting on our sustainability performance since 2008. In 2016, we
began publishing our sustainability performance in a combined Annual and Sustainability
Report to demonstrate the interconnectivity and interdependency of sustainability with
company performance. It also enables us to integrate, across the whole report, the
concept of creating value for our Stakeholders – shareholders, communities, suppliers,
governments, and employees – which is at the centre of our Strategy.
Examples of this in practice are embedded throughout the report to reflect the integration
of sustainability into our Assets and corporate functions, which we do through The OZWay,
a simple model that explains how all the parts of OZ Minerals fit together.
ORGANISATIONAL SCOPE AND BOUNDARY
We disclose sustainability data in accordance with the Global Reporting Initiative (GRI)
and Sustainability Accounting Standards Board (SASB) Metals and Mining Sustainability
Accounting Standard. Supporting documents that form part of our sustainability disclosures
are available on our website. We have also developed our 2020 Sustainability Report
Navigator Tool (ozminerals.com/sustainability) to make specific information more
accessible via our website.
Our 2020 Sustainability Report covers the performance of our Australian Assets:
Prominent Hill, Carrapateena and West Musgrave and our Brazilian Assets in the Carajás
Province. These are facilities over which OZ Minerals had or gained operational control(a)
during the 2020 calendar year. Joint ventures which we do not operate are excluded.
STAKEHOLDER ALIGNMENT WITH SUSTAINABILITY
PERFORMANCE ELEMENTS
As creating value for our Stakeholders is at the centre of our Strategy, our 2020
Sustainability Report shows how the elements of sustainability align with our
Stakeholders. This year, we have also illustrated our alignment with select United
Nations Sustainable Development Goals (SDGs) and discuss how our Company
Strategic Aspirations align with specific SDGs.
ASSURANCE
OZ Minerals engaged KPMG to undertake Reasonable Assurance over our energy
and emissions data for our Australian assets and Limited Assurance over selected
information in this report. The full details of the process, scope of assurance and
outcome are detailed in KPMG’s assurance statement on page 118-119.
72
(a) As defined by the Australian Clean Energy Regulator
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 73
74
STRATEGIC
ENABLERS
p. 98
CASE
STUDIES
p. 83-111
RISK
p. 40
A Modern Mining Company
G L O B A L COPPER
P A R TNERING
Our
Context
Our
Choices
D
E
V
L
O
V
E
D
E
L
I
G
A
D
N
A
VALUE
CREATION
H
O
INVEST I N G
RESPONS I B L Y
W WE WORK T O G E
I
L
E
A
N
A
N
D
N
N
O
V
A
T
I
V
E
R
E
H
T
Our
Enablers
Our
Work
Our
Performance
Employee
Value
Community
Value
Government
Value
Supplier
Value
Shareholder
Value
GOING BEYOND WHAT’S POSSIBLE TO MAKE LIVES BETTER
OUR CONTEXT
OUR CHOICES
– Macro Environment
– Stakeholder Expectations
– Constitution
– Laws and Regulations
– Strategy
– Risk Appetite
– Policies
– Code of Conduct
strategY
OUR ENABLERS
OUR WORK
OUR PERFORMANCE
– Organisational Model
– Process Standards
– Specifications
– Performance Standards
– Risks
– Business Plans
– Capability
– Goals
9
D
E
V
L
O
V
E
D
– Compliance
– Reporting
– Engagement
– Assurance
MATERIALITY
p. 78
EXTERNAL
STANDARDS
p. 81
ASSURANCE
p. 118-119
GOVERNANCE
p. 24
SUSTAINABLE
DEVELOPMENT
GOALS
p. 79
Strategy
The Strategy, Business
Plan and Policies and
Standards which are
reviewed and set on
an annual basis.
oUr strategiC asPirations and aCCeLeration Priorities heLP foCUs oUr WorK on three or foUr high-iMPaCt aCtiVities Under eaCh
Strategic Aspirations mapped to Strategy
eLeMent of oUr strategY.
Identifying the opportunities to accelerate
Strategic Aspirations
Partnering
Global copper
Lean and innovative
Our business model empowers
Assets to optimise for their local
conditions.
We responsibly produce clean value-
adding products in partnership with
our customers in a transparent manner.
We deliver the activities along
our value chain to enable our
local Stakeholder aspirations
for generations to come.
We work closely with our
Stakeholders to create mutual
value by building each others’
capability and capacity.
Devolved and agile
We work with the best talent
and capability no matter where it
resides, driving an outcome-based
organisation.
Our Assets are brought to full value
early through a rapid approach to
our project pipeline and provide
optimal value for stakeholders.
Our Assets are scalable and adaptive.
We are a low bureaucracy
organisation structured around
the work to be done rather than
traditional concepts of roles, to
enable rapid decision-making free
from traditional hierarchy.
We strive to minimise water use
and add value when we do.
We will emit zero Scope 1 emissions
and strive to systematically reduce
Scope 2 and 3 emissions across our
value chain.
We consume and produce in a
way that generates zero net waste
and creates value for stakeholders.
We use data and technology for
tactical decision making, repetitive
work and to improve safety, allowing
our people to focus on complex and
innovative thinking.
Our simplifi ed systems and processes
are a competitive advantage.
G L O B A L COPPER
P A R TNERING
D
E
V
L
O
V
E
D
E
L
I
G
A
D
N
A
VALUE
CREATION
H
O
INVEST I N G
RESPONS I B L Y
W WE WORK T O G E
I
L
E
A
N
A
N
D
N
N
O
V
A
T
I
V
E
R
E
H
T
How we work together
Investing responsibly
We are a virtual organisation bound
Our Partnering and diversifi ed
by our Purpose and Aspirations, not by
geography or physical infrastructure.
ownership models create shared
responsibility across all Stakeholders.
We challenge all assumptions about
how and where work needs to be
done and what’s possible.
We deliberately weave personal and
professional growth into our everyday
work, enabling people to do the best
work of their lives.
We attract investment due to how
we operate, our strong fi nancial
returns and our top quartile
shareholder returns.
Acceleration
priorities support the
Strategic Aspirations
Agile
Innovation
project management
making it easier to bring forward
remote working where possible
mindset
Acceleration Priorities
Flexible workforce
work life plans
remote operations centres
Accelerate organic growth
pipeline including
bring forward Prominent Hill decline
update CentroGold PFS
resume exploration and resource drilling
Ethical and sustainable
reduce high-emissions energy use
baseline Scope 3 emissions
concentrate traceability
and develop ideas
Data
greater use of data to make faster,
better decisions
Partnering for mutual value
and better outcomes
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
sUstainaBiLit Y rePort
75
STAKEHOLDER VALUE CREATION METRICS
p. 77
Our
Context
Our
Choices
Our
Enablers
Our
Work
Our
Performance
Employee
Value
Community
Value
Government
Value
Supplier
Value
Shareholder
Value
VALUE
CREATION
A Modern Mining Company
G L O B A L COPPER
P A R TNERING
D
E
V
L
O
E
L
I
G
A
V
D
E
N
D
A
VALUE
CREATION
I
N
L
N
E
O
V
A
T
I
V
A
N
A
N
D
E
INVEST I N G
RESPONS I B L Y
H
O
W WE WORK T O G E
R
E
H
T
GOING BEYOND WHAT’S POSSIBLE TO MAKE LIVES BETTER
OUR CONTEXT
OUR CHOICES
– Macro Environment
– Strategy
– Stakeholder Expectations
– Risk Appetite
– Constitution
– Policies
– Laws and Regulations
– Code of Conduct
– Organisational Model
– Process Standards
– Specifications
– Performance Standards
– Risks
– Business Plans
– Capability
– Goals
D
E
V
L
O
V
E
D
OUR ENABLERS
OUR WORK
OUR PERFORMANCE
– Compliance
– Reporting
– Engagement
– Assurance
Compliance
r
e
d
l
o
h
e
r
a
h
S
t
n
e
m
n
r
e
v
o
G
y
t
i
n
u
m
m
o
C
e
e
y
o
l
p
m
E
r
e
i
l
p
p
u
S
Going beyond what’s possible to make lives better
Share price and dividends
Grow share price: measured relative to peer group / sustainable dividend (TSR)
Reserve growth
Grow OZL’s Copper Reserves: measured relative to OZL’s Reserve at the end of previous year
All-In Sustaining Costs (AISC)
Bottom half of cost curve: measured relative to global copper producers
Governance
Board effectiveness: Compliance with ASX’s corporate governance principles and recommendations
Employment by jurisdiction
Workforce – local / state / out of state / Land Connected and Indigenous Peoples
Taxes and royalties
Capital investment
Emissions and energy
Income tax expense / royalties (total and jurisdictions)
Capital investment
Scope 1 & 2 emissions intensity (tCO2-e per t Cu Eq) / Scope 1 & 2 absolute
emissions / net energy intensity (per t Cu Eq) and renewable energy percentage
Local content
Value spent with local suppliers through supply chains
Community engagement
Number and average duration for resolution of concerns, complaints and grievances
Cultural heritage
Social contribution
Partnering
Human rights
Water
Waste
Unauthorised cultural heritage breaches / signifi cant environmental and social incidents
Quantity and case studies
Partnering case studies
Modern Slavery Act action plan Implementation and number of incidents
Water consumed (per t Cu Eq) / water withdrawal in areas of extreme water stress (%)
Non-mineral waste produced (per t Cu Eq)
Land and biodiversity
Area (ha) disturbed in high biodiversity conservation areas
Inclusion
Diversity
Inclusion maturity upward trend
Diversity of thought and demographic
Safety performance
Total Recordable Injury Frequency Rate (TRIFR) and zero fatalities
Workforce engagement
Employee Survey Results above industry benchmark
Net Promoter Score (NPS)
Net Promoter Score (NPS) survey
On time payment
Proportion (number and value) of invoices paid on time within payment terms
(7, 14, 30, 60 and >60 days of invoice date)
Supplier Value by jurisdiction
OZ Minerals expenditure by number of suppliers and value spent with them by postcode
A Modern Mining Company
Shareholder
Value
Government
Value
Community
Value
Employee
Value
Supplier
Value
The Board and management review compliance with the Performance
Standards throughout the year and Significant Incidents are reviewed
by the Executive Leadership Team with material incidents elevated to
the Board Sustainability Committee.
Our Performance
SAFETY PERFORMANCE
p. 82
SOCIAL PERFORMANCE
p. 96
ENVIRONMENTAL
PERFORMANCE
p. 86
HEALTH AND WELLBEING
PERFORMANCE
p. 106
Accountability
Operating Assets are accountable for delivering the sustainability
elements. At a corporate level, we drive and monitor our approach
and outcomes through Our Work.
MANAGING
SUSTAINABILITY
AT OZ MINERALS
The OZWay is a simple
model that explains
how all the parts of
OZ Minerals fit together.
The OZWay defines
how Sustainability is
managed within
OZ Minerals global
devolved model.
76
STAKEHOLDER VALUE CREATION METRICS
The Stakeholder Value Creation Metrics were developed during 2020. The Metrics provide
the reader, including our Stakeholders, with transparency on how we are creating value
for our five Stakeholder Groups – employees, community, shareholders, government and
suppliers – and the progress we are making.
Stakeholder value creation is at the centre of our Strategy. Over the past two years, we
have been embedding and systematising Stakeholder value creation into our governance
processes so it is always part of how and what we do, and is not dependent on human
drivers. For example, our Risk Specification impact table is structured around an assessment
of the level of impact on each of our five Stakeholders.
In developing the Stakeholder Value Creation Metrics, we provide transparency on
our performance, and they also form the basis of our Company goals; thereby driving
performance and behaviour in support of Stakeholder value creation within the Company.
An assessment of performance against the Metrics shows where we are performing well and
where we have scope for improvement. Our performance should be considered over time
and in the context of the accompanying commentary, which we will publish annually.
It is only when we are creating value for all our Stakeholders that we will have a successful
company delivering against our sustainability strategy and achieving our Purpose, ‘Going
beyond what’s possible to make lives better’.
G L O B A L COPPER
P A R TNERING
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RESPONS I B L Y
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Going beyond what’s possible to make lives better
Share price and dividends
Grow share price: measured relative to peer group / sustainable dividend (TSR)
Reserve growth
Grow OZL’s Copper Reserves: measured relative to OZL’s Reserve at the end of previous year
All-In Sustaining Costs (AISC)
Bottom half of cost curve: measured relative to global copper producers
Governance
Board effectiveness: Compliance with ASX’s corporate governance principles and recommendations
Employment by jurisdiction
Workforce – local / state / out of state / Land Connected and Indigenous Peoples
Taxes and royalties
Capital investment
Emissions and energy
Income tax expense / royalties (total and jurisdictions)
Capital investment
Scope 1 & 2 emissions intensity (tCO2-e per t Cu Eq) / Scope 1 & 2 absolute
emissions / net energy intensity (per t Cu Eq) and renewable energy percentage
Local content
Value spent with local suppliers through supply chains
Community engagement
Number and average duration for resolution of concerns, complaints and grievances
Cultural heritage
Social contribution
Partnering
Human rights
Water
Waste
Unauthorised cultural heritage breaches / signifi cant environmental and social incidents
Quantity and case studies
Partnering case studies
Modern Slavery Act action plan Implementation and number of incidents
Water consumed (per t Cu Eq) / water withdrawal in areas of extreme water stress (%)
Non-mineral waste produced (per t Cu Eq)
Land and biodiversity
Area (ha) disturbed in high biodiversity conservation areas
Inclusion
Diversity
Inclusion maturity upward trend
Diversity of thought and demographic
Safety performance
Total Recordable Injury Frequency Rate (TRIFR) and zero fatalities
Workforce engagement
Employee Survey Results above industry benchmark
Net Promoter Score (NPS)
Net Promoter Score (NPS) survey
On time payment
Proportion (number and value) of invoices paid on time within payment terms
(7, 14, 30, 60 and >60 days of invoice date)
Supplier Value by jurisdiction
OZ Minerals expenditure by number of suppliers and value spent with them by postcode
A Modern Mining Company
Shareholder
Value
Government
Value
Community
Value
Employee
Value
Supplier
Value
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2020 PERFORMANCE
RATING CRITERIA
Positive Performance
Positive progress
Further focus required
Not yet assessed
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OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
sUstainaBiLit Y rePort
77
Stakeholder Value Creation Metric
Performance criteria
Page no.
Share price and dividends
Grow share price: measured relative to peer group
Relative to peers over three year period
Sustainable dividend: measured relative
to OZL’s dividend track record
Relative to prior year dividend
Bottom half of cost curve
Measured relative to global copper producers
Relative to industry cost curve
Reserve growth
Governance
Grow OZL’s Copper reserves: measured relative
to OZL’s reserve at the end of previous year
Relative to prior year
Compliance with ASX’s corporate governance
principles and recommendations
Relative to Stakeholder expectations and governance
disclosures
p. 61, 63, 66
p. 4, 6
p. 61, 63, 66
p. 121
p. 34
Employment by jurisdiction
Workforce – local / state / out of state / Land Connected
and Indigenous Peoples
Relative to context and Stakeholder expectations
p. 104, 107
Tax and royalties
Income tax expense / royalties (total and Jurisdictions)
Relative to NPAT and Revenue
p. 104, 115
Capital Investment
Capital Investment
Relative to content spend and Stakeholder expectations
p. 38, 134
Emissions
Energy
Scope 1 & 2 emissions per tCO2-e per t Cu Eq / Scope 1 & 2
absolute emissions
Relative to our Strategic Aspirations and TFCD Roadmap
p. 87, 112
Renewable energy percentage
Net energy intensity per t Cu eq
Relative to our Strategic Aspirations and TFCD Roadmap
Relative to our Strategic Aspirations and TFCD Roadmap
Local content
Value spent with local suppliers through supply chains
Relative to context, spend and Stakeholder expectations
Working with
Stakeholders
Number and average duration for resolution of concerns,
complaints and grievances
Relative to our Context and Stakeholder expectations
p. 97
Partnering Case Studies
Relative to our Context and Stakeholder expectations
p. 98, 99
Community engagement
Social contribution (quantitative and qualitative)
Relative to our Context and Stakeholder expectations
Human rights
Cultural heritage
Water
Waste
Modern Slavery Act Roadmap implementation
and Number of incidents
Relative to our Strategic Aspirations and Modern Slavery
Roadmap
Unauthorised cultural heritage breaches / significant
environmental and social incidents
Relative to our Stakeholder expectations
Water consumed per t Cu Eq / water withdrawal
in areas of extreme water stress (%)
Relative to our Context, Strategic Aspirations
and Stakeholder Expectations
Non-mineral waste produced per t Cu Eq
Land and biodiversity
Area (ha) disturbed in high value biodiversity areas
Relative to our Context, Strategic Aspirations
and Stakeholder Expectations
Relative to our Context, Strategic Aspirations
and Stakeholder Expectations
Safety performance
Total Recordable Injury Frequency Rate (TRIFR)
Relative to our Strategic Aspirations and YOY Performance
p. 83, 112
Workforce engagement
Employee Survey Results above industry benchmark
Zero fatalities
Annual Performance relative to zero
Relative to our Strategic Aspirations
and Stakeholder expectations
Inclusion
Diversity
Inclusion maturity upward trend
Relative to Peers
Diversity of thought and demographic
Relative to Peers and our Strategic Aspirations
p. 84, 112
p. 107
p. 109
p. 109
Net Promoter Score (NPS)
Will conduct first survey in 2021
Relative to our Context and Stakeholder expectations
On time payment
The proportion by number and value of invoices
paid on time within payment terms
Supplier Value
by jurisdiction
OZ Minerals local, state, national, international
and total spend
Relative to Stakeholder expectations and Compliance level
p. 102
Relative to our Context and Stakeholder expectations
p. 102, 115
p. 87
p. 87
p. 104
p. 102
p. 101
p. 100
p. 91, 113
p. 92, 114
p. 93, 114
78
MATERIALITY ASSESSMENT
Our annual materiality assessment identifies the topics most important to our Stakeholders
and our Performance. Outcomes of the materiality assessment allow us to better understand
our context and inform the choices that drive delivery of our Strategy.
We assess the importance of sustainability topics using two criteria: importance to our
Stakeholders and importance to our business in terms of growth, economic and social
impact. Material topics are discussed in this report and in the risk section of the Annual
Report (page 40). Further information on sustainability is available on the OZ Minerals
website (ozminerals.com/sustainability).
UNDERSTANDING OUR STAKEHOLDERS’ INTERESTS: METHODOLOGY
We use a wide range of inputs to develop our assessment of what is material. These
inputs include consultation with stakeholders, surveys of stakeholders, market intelligence,
developments in operating jurisdictions, material Company risks, and internal reviews,
including feedback from the Sustainability Committee.
This year, 113 responses to our stakeholder survey were received from Australia and Brazil
and across all five Stakeholder groups. The survey asked respondents what level of value
each material topic had on their decisions to invest, take a job or partner with us, as well
as the impact of our performance across the topics on them. The results of the survey are
supplemented with analysis of media reports featuring OZ Minerals, which include the
material topics. The survey and media analyses are further supplemented by analysis of
industry trends among the material topics, for which we use industry risk reports, peer
sustainability reporting and broader internationally recognised risk and sustainability
insights, including the World Economic Forum’s Global Risk Report and the United Nations
Sustainable Development Agenda.
In 2020, 16 material topics were identified from the above process to reflect the different
operating contexts of our Assets as a global business. We recognise that some topics
are related. However, to better understand materiality, we have intentionally separated
some topics as individually material in our assessment. For example, energy, waste and
water are linked to climate change which is discussed in detail from page 87 and cultural
heritage, human rights and Land Connected and Indigenous Peoples are linked to our
Social Performance (page 96).
oZ MineraLs 2020 MateriaLitY Matrix
HIGH
Local communities
Business ethics
Occupational health
and safety
Economic performance
Procurement practices
Employment, training
and education
Land connected and
Indigenous peoples
Partnerships
Human rights
Diversity
Climate change
and emissions
Energy
Indirect economic impacts
Water
Biodiversity
Effluents and waste (inc. tailings)
Influence on OZ Minerals’ performance
HIGH
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sUstainaBiLit Y rePort
79
United Nations Sustainable Development Goals
The United Nations SDGs help us better understand the contexts in which we operate and where to focus our
influence and impact based on our activities. As outlined in Table 1 below, we have identified a subset of the
SDGs material to our Australian and Brazilian operations. At a company level, our Strategic Aspirations and
Material Risks illustrate how OZ Minerals contributes to specific SDGs, consistent with delivering our Purpose
of ‘Going beyond what’s possible to make lives better’.
taBLe 1 — sdgs oZ MineraLs Can infLUenCe
SDG
Material sustainability topics OZ Minerals Material Risks
Our Strategic Aspirations
Economic performance
Local communities
Business ethics
Procurement practices
Indirect economic impacts
Employment, training
and education
Occupational health
and safety
Energy
Climate change
and emissions
Local communities
Attract and retain key talent
Mental and physical health
We work with the best talent and capability no matter where it resides,
driving an outcome-based organisation.
We are a low bureaucracy organisation structured around the work to be done
rather than the traditional concepts of roles, to enable rapid decision-making free
from hierarchy.
Our systems and processes are a competitive advantage.
We attract investment due to how we operate, our strong financial returns
and our top quartile shareholder returns.
We deliberately weave personal and professional growth into our everyday
work, enabling people to do the best work of their lives.
Operational productivity
Our assets are brought to full value early through a rapid approach to our project
pipeline and provide optimal value for Stakeholders.
Our Assets are scalable and adaptive.
We use data and technology for tactical decision making, repetitive work and to
improve safety, allowing our people to focus on complex and innovative thinking.
We challenge all assumptions about how and where work needs to be done and
what’s possible.
We are a virtual organisation, bound by our Purpose and Aspirations, not by geography
or physical infrastructure.
Our business model empowers Assets to optimise for their local conditions.
Land Connected and
Indigenous Peoples
Local communities
Indirect economic impacts
Social Performance
Diversity & Inclusion
Attract & retain key talent
Mental & physical health
Water
Biodiversity
Effluents and waste
Climate change
and emissions
Land Connected and
Indigenous Peoples
Climate change
and emissions
Energy
Water
Effluents and waste
Biodiversity
Land Connected and
Indigenous Peoples
Local communities
Effluents and waste
Business ethics
Occupational health
and safety
Local communities
Land Connected and
Indigenous Peoples
Diversity
Partnerships
Local communities
Business ethics
Water management
Closure & Rehabilitation
Tailings Storage Facilities
We deliver the activities along our value chain to enable our local Stakeholder
aspirations for generations to come.
We responsibly produce clean value-adding products in partnership with our
customers in a transparent manner.
We consume and produce in a way that generates zero net waste and creates
value for Stakeholders.
Climate change
and emissions
We will emit zero scope 1 emissions and strive to systematically reduce
Scope 2 and 3 emissions across our value chain.
We have a positive impact on water, striving to minimise water usage and
add value with what we consume.
Biodiversity management
Cultural heritage sites
Land access
We work closely with our Stakeholders to create mutual value by building each
other’s capability and capacity.
Our partnering and diversified ownership models creates shared responsibility
across Stakeholders.
Human rights, ethics
We work closely with our Stakeholders to create mutual value by building each
and security
other’s capability and capacity.
Our systems and processes are a competitive advantage.
Closure & Rehabilitation
Social performance
Operational productivity
Cultural heritage sites
We work closely with our Stakeholders to create mutual value by building each other’s
capability and capacity.
Our partnering and diversified ownership models creates shared responsibility
across Stakeholders.
80
HOW WE ENGAGE WITH OUR STAKEHOLDERS
How we engage with our Stakeholder groups informs our choices and how we create value. Every Stakeholder and context is unique,
so we engage and interact in multiple ways as outlined in Table 2 below.
taBLe 2: oZ MineraLs staKehoLder engageMent
Stakeholder group
About the Stakeholder
How we engage
Shareholders
Shareholders
Retail and institutional shareholders.
Annual General Meeting, strategy sessions, Annual and Sustainability
Reports, Quarterly Reports and webcasts, website (where all releases and
other information on OZ Minerals is maintained and regularly updated),
investor meetings and conference presentations, and direct phone contact
with investor relations, presentations at industry conferences, briefings
and site visits, investor presentations.
Lenders and investment community Lenders, 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 and Sustainability Reports, Quarterly
Reports and webcasts, ASX releases, website, direct phone contact with
investor relations, presentations at industry conferences, briefings and
site visits, investor presentations.
Customers
Governments
Governments
Communities
Local community
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
employees. Personal visits by marketing department, executive management
and process management employees. Site visits to customer plants and
customer representatives encouraged to visit OZ Minerals’ operations.
Production of parcels as per customer specifications.
Local, state and national regulators and government agencies
Regular, formal and informal communications with corporate and
operational senior management and employees through site visits,
meetings, events and reporting.
OZ Minerals does not make political donations.
Individuals and groups local to our operations, including
landowners, traditional owners, 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 corporate and operational management, environment
and community relations departments on specific issues. Annual 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.
Employees
Employees
Suppliers
Suppliers
Employees in Australia 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, inclusion and diversity, training
and education, and personal wellbeing.
Regular communication with employees through presentations and
discussions, the intranet, internal social media, email alerts, hard copy
newsletters, noticeboard items, regular live interactive broadcasts from the
CEO and Brazil Chief Executive, regular electronic newsletter from the CEO.
Refer to the safety, and health and wellbeing section for information about
our safety programs.
From local businesses to large international organisations
Regular meetings with commercial and operational employees.
Industry associations
Mining and metals industry
Representatives on boards and committees, engagement on specific
projects. OZ Minerals is a member of the South Australian Chamber of Mines
and Energy (SACOME) and Association of Mineral Exploration Companies
(AMEC).
Other mining companies
and academia
Other mining companies, mining regulators, industry
associations, minerals industry academics, and industry
alliances.
Papers and presentations given by executives at various industry-related
conferences. Location-specific industry meetings, informal communication
and working groups.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
81
EXTERNAL RECOGNITION,
VOLUNTARY COMMITMENTS AND
EXTERNAL BENCHMARKING
MaCQUarie esg ranKing
In November 2020, OZ Minerals was
ranked in the second quintile (20-40)
by Macquarie’s ESG ratings of ASX100
Companies. The 2020 disclosures of 237
Australian-listed companies were assessed,
representing 94 per cent of the ASX300 b
y market capitalisation.
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.
WorK180 endorsed eMPLoYer
OZ Minerals is a Work180 Endorsed
Employer. WORK180 Endorsed Employers
are recognised globally as organisations
that are diverse, inclusive and support
women in the workplace.
2020 soUth aUstraLian dePartMent
of Mining and energY aWards for
exCePtionaL PerforManCe
Winner Resources Sector Industry and
Collaboration Award for ‘The Hybrid Energy
Plant: A South Australian Test Site For
Innovative Mining And Energy Collaboration’
Winner Energy and Resources Community
Award: with the Antakirinja Matu-
Yankunytjatjara Aboriginal Corporation for
‘Tjunguringanyi Working Together’
Commendation Inclusion & Wellbeing
Award: Beyond COVID-19: Accelerating
Inclusive Cultures
Young Achiever – Joint Winner: Jane
Brunton
gLoBaL rePorting initiatiVe
GRI is an independent international
organisation which has established the
leading international framework and
standards for sustainability reporting.
OZ Minerals prepared the Sustainability
section of the 2020 Annual and
Sustainability Report in accordance with
the GRI Standards Core and voluntary
disclosures.
sUstainaBiLitY aCCoUnting standards
Board (sasB)
The Sustainability Accounting Standards
Board (SASB) is an independent 501(c)
(3) non-profit organization. SASB’s
mission is to develop and disseminate
sustainability accounting standards that
help public corporations disclose material,
decision-useful information to investors.
See the navigator tool on our website for
performance against SASB.
aUstraLian CoUnCiL of
sUPerannUation inVestors (aCsi)
OZ Minerals 2019 ESG Disclosures were
assessed as ‘Detailed’ by the Australian
Council of Superannuation Investors.
SUPPORTING
DOCUMENTS:
2020 SUSTAINABILITY REPORT
NAVIGATOR TOOL
ozminerals.com/sustainability
82
SAFETY
PERFORMANCE
High standards of
leadership in the
area of Safety for
all Stakeholders.
Our target is to achieve an injury and
occupational disease-free workplace
by ensuring hazards are identified and
managed at source.
We understand 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 is reasonably practicable.
We combine safety leadership with
our governance framework, including
the safety category of our Global
Performance Standard which enable
us to effectively manage material
sustainability risks that are common
across OZ Minerals. They set out for
our workforce our minimum mandatory
control requirements.
SUPPORTING
DOCUMENTS:
STAKEHOLDER VALUE
CREATION POLICY
ozminerals.com/uploads/docs/191024_
OZL_Value_Creation_Policies.pdf
GLOBAL PERFORMANCE STANDARDS
ozminerals.com/uploads/docs/OZ_Minerals_
Global_Performance_Standards.pdf
PERFORMANCE DATA
SAFETY DATA TABLE
p. 112
2020 SUSTAINABILITY REPORT
NAVIGATOR TOOL
ozminerals.com/sustainability
OUR CHOICES:
Strategic Aspirations
Our Assets are scalable and adaptive.
We are a low bureaucracy organisation
structured around the work to be done
rather than traditional concepts of roles,
to enable rapid decision-making free
from traditional hierarchy.
We use data and technology for tactical
decision making, repetitive work and to
improve safety, allowing our people to focus
on complex and innovative thinking.
Material Topics
Occupational Health and Safety, p. 83, 84
Employment, training and education, p. 85
Effluents and waste (including Tailings), p. 92
Our Performance: Stakeholder
Value Creation Metrics
Total Recordable Injury Frequency Rate
(TRIFR), p. 83
Zero fatalities, p. 84
Case Studies:
Insights Hub, p. 83
Prominent Hill Underground Mining
Services Alliance, p. 84
Crisis Management Team (CRT), p. 85
Pedra Branca Underground Mine
Development, p. 85
OZ MINERALS sUstainaBiLit Y rePort
83
SAFETY CULTURE
AND LEADERSHIP
PERFORMANCE DATA
SAFETY DATA TABLE
p. 112
SAFETY ASSURANCE
p. 118
*2019 Safety Reporting Data did not include Brazil data.
Stakeholder Value Creation
Metric: Total Recordable Injury
Frequency Rate (TRIFR)
In 2020, the TRIFR rate of 5.29 per
million hours worked represented
an improvement of 30 per cent from
the previous year’s TRIFR of 7.52*.
We have set a TRIFR target of 4.90
(including Brazil) for 2021.
All safety incidents are thoroughly
investigated, we share what we have
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, through our real time Insights
Hub. Our performance is monitored by our
Executive Leadership Team. We conduct
annual internal audits against select
company processes and standards, and
external assurance as part of the annual
Sustainability Reporting process. The
number of recordable workplace injuries
in many of our departments has reduced
as a result of active engagement from our
senior leadership, and activities focused on
identifying and eliminating the causes of
incidents. The outcomes of investigations
into significant incidents and incident trends
are comprehensively reviewed by the Board’s
Sustainability Committee to confirm that we
learn from incidents, that there is a focus
on compliance with approved processes,
and that we implement additional controls
where necessary.
Safety statistics are calculated per one
million working hours and inclusive of our
Prominent Hill and Carrapateena mines
in Australia, our Antas and Pedra Branca
Brazilian operations, as well as facilities
under OZ Minerals’ operational control,
including the West Musgrave Project,
exploration sites and our corporate offices.
We continually monitor key indicators to
track workplace incidents and injuries.
Our governance framework includes
the Learning Through Incidents Process
Standard, which sets out the process
for identifying, elevating and reporting
incidents, including safety-related incidents.
The Risk Management Process Standard,
and its supporting Specification, is a critical
Process Standard. Its five Stakeholder Pillars
(shareholders, communities, suppliers,
governments, and employees) Risk
Specification Table supports the Learning
Through Incidents Process Standard.
Incidents and near misses are internally rated
against potential or actual consequence
and likelihood and assessed for their
impact on our Stakeholders. This helps us
identify significant incidents that warrant
in-depth review and analysis. All actual and
potential significant safety incidents are
thoroughly investigated using the Incident–
Cause–Analysis Method (ICAM). Significant
incidents are those deemed to have a high
potential or actual serious consequence for
our Stakeholders and include all recordable
incidents and disabling injuries.
2020 Safety Assurance
Process update
To reflect our Employee Value Creation
policy, OZ Minerals’ TRIF reporting
methodology was updated in August 2020
to include, where an incident is required
to be reported, the associated work hours
(Exposure Hours) in the TRIF rate calculation.
All data reported from 1 January 2020
was retrospectively adjusted to align with
the updated methodology. Incidents and
Exposure Hours associated with remote
work in line with the Company’s move to
more flexible work (i.e. working from home)
and OZ Minerals-controlled business travel
are now both included in the TRIF rate
calculation.
Case Study: Insights HubAn OZ Minerals Strategic Aspiration is that We use data and technology for tactical decision making, repetitive work and to improve safety, allowing our people to focus on complex and innovative thinking. To inform our safety choices and proactively identify material trends in 2020, OZ Minerals developed an ‘Insights Hub’ that brings key datasets from all assets into a single platform to help us optimise data-based decision making. These data have the ability to provide rigorous scenario analysis to inform data-driven decisions for all elements of our Assets. 84
CONTRACTOR MANAGEMENT
Stakeholder Value Creation
Metric: Zero fatalities
In 2020 there were no fatalities within
our direct and contractor workforces.
Our projects are delivered in collaboration
with contractors and suppliers, as we
rely in part on their capabilities in the
management of our operations. All contract
partners must meet OZ Minerals’ Global
Performance Standards and our Global
Process Standards define the requirements
and practices for working with contractors
and suppliers. Major contractors are
contractually obliged to comply with
our Code of Conduct, relevant Value
Creation Policies, standards and local level
agreements. Contractors must respect our
HWWT Principles and exhibit behaviour that
ensures workforce safety. All contractors
are subject to a pre-qualification process
and are comprehensively evaluated against
criteria including safety, health, environment
and community aspects as well as risk
management, internal auditing processes
and employee management. Minimum
criteria (safety, social and environment) and
performance criteria (including operating
performance and site management) are
developed and applied to our contracts.
SAFETY PROGRAMS
We are committed to protecting the
safety of our employees, suppliers and
communities. We actively collaborate with
all Stakeholders to prevent work-related
injuries, incidents and illnesses. In 2020, in
response to our changing context due to
COVID-19, and flexible work, we introduced
a number of initiatives to mature our
safety culture with a focus on safety and
wellbeing programs. Leadership plays an
important part in our safety culture through
demonstrating and promoting safety in
our workplaces. 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 Global
Performance Standards and identifying
opportunities for continuous improvement
through our risk management Process
Standard that is centred around impacts
on our Stakeholders.
Effective safety management means we:
take a risk-based approach to decision
making based on impacts to OZ Minerals
and our Stakeholders
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.
Case Study: Prominent Hill Underground Mining Services ContractIn 2020, the Prominent Hill Underground Mining Services Contract was awarded to Byrnecut Mining Services under an alliance contract model. A partnering approach was taken to inform the development and co-management of the Alliance. The Alliance model provides a platform and process for value creation, by structuring collaboration between the project teams to deliver alignment on measurement, and to set the priorities to drive performance and the behaviors within the Asset to optimise safety, production, environment and social performance.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
85
TRAINING AND EMERGENCY
PREPAREDNESS
We continuously explore and adopt
methods to ensure we grow the capability
of our leaders and employees. Our Crisis
Management Plan outlines the roles,
responsibilities and processes that our
corporate Crisis Management Team (CMT)
would follow during a crisis event. 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 in the event of an onsite
emergency. We conduct scenario training
with the operating Assets’ management
teams and the corporate CMT. We hold
regular emergency exercises, both desktop
and practical, to test our emergency
preparedness.
Case Study: Crisis Management Team At the onset of the COVID-19 pandemic, OZ Minerals activated our CMT in accordance with our Crisis Management Plan. The CMT is chaired by the CEO and includes representatives from operations, legal, commercial, safety, environment, community, communications and government relations. The CMT met multiple times per week over the course of the pandemic to evaluate the public health risk and coordinate our response in line with government restrictions in Australia and Brazil. Our sites quickly reduced onsite workforce to critical roles only, minimising the movement of people to and from the sites and within the community. Each site established disease transmission prevention protocols including travel pre-approvals, health screening, physical distancing, single-serve food, and onsite testing capabilities to minimise the risk to those remaining on site.Case Study: Pedra Branca Underground Mine Development The Pedra Branca mine under construction is one of the only underground mines in the Carajás region of northern Brazil. In 2020, new Refuge Chamber Technology was installed that contains the ability to monitor occupants within the chamber closely during an emergency on site. When activated, the cameras send a live, recorded stream of both the interior and exterior of the refuge chamber. 86
ENVIRONMENTAL
PERFORMANCE
Minimising our impact
and caring for the
natural environment.
We understand that how we manage
our impact on the natural environment
can directly, indirectly, or cumulatively
impact our Stakeholders, in particular
the values and livelihoods of our host
communities and Land Connected
and Indigenous Peoples. In 2020,
we increased our focus on climate
change and emissions, with significant
progress made on implementing the
Task Force on Climate-related Financial
Disclosures (TCFD) framework. We have
also increased our efforts regarding
management of tailings storage facilities,
in line with developments in industry
standards and Stakeholder expectations.
Reducing our emissions, water usage and
waste generation to optimise our assets
and reduce our impacts on Stakeholders
are key areas for OZ Minerals that are
supported by our Strategic Aspirations.
SUPPORTING
DOCUMENTS:
PERFORMANCE STANDARDS
ozminerals.com/uploads/docs/OZ_Minerals_
Global_Performance_Standards.pdf
2020 SUSTAINABILITY REPORT
NAVIGATOR TOOL
ozminerals.com/sustainability
ENVIRONMENTAL ASSURANCE
p. 118
ENVIRONMENTAL PERFORMANCE
DATA TABLE
p. 112-114
OUR CHOICES:
Strategic Aspirations
We strive to minimise water use
and add value when we do.
We will emit zero Scope 1 emissions
and strive to systemically reduce Scope 2
and 3 emissions across our value chain.
We consume and produce in a way that
generates zero net waste and creates
value for Stakeholders.
Material Topics
Tailings Storage Facilities (TSF), p. 92
Climate change and emissions, p. 87-88
Water, p. 91
Biodiversity, p. 93
Our Performance: Stakeholder
Value Creation Metrics
Scope 1 & 2 emissions intensity
(tCO2-e per t Cu Eq), p. 87
Scope 1 & 2 absolute emissions, p. 87
Net energy intensity (per t Cu Eq), p. 87
Water consumed (per t Cu Eq) / water
withdrawal in areas of extreme water
stress (%), p. 92
Non-mineral waste produced (per t Cu Eq),
p. 92
Area (ha) disturbed in high biodiversity
conservation areas, p. 93
Renewable energy percentage, p. 87
Case Studies:
Capture the Spark, p. 17
Australia’s first battery powered vehicle
for underground explosive charging, p. 90
OZ MINERALS sUstainaBiLit Y rePort
87
CLIMATE CHANGE, ENERGY
USE AND GREENHOUSE GAS
EMISSIONS
PROGRESS AGAINST
OUR TCFD ACTION PLAN
Stakeholder Value Creation
Metric: Scope 1 & 2 absolute
emissions
There was a slight decrease in Scope 1
emissions (~1,800 tCO2-e) at our Australian
assets and a small increase in Scope 2
emissions (~11,500 tCO2-e). Our overall
Scope 1 and 2 emissions footprint is higher
in 2020 as we have included emissions from
our Brazilian assets for the first time.
Overview
We are a copper-core modern mining
company providing a metal that is central
to the transition to a low carbon economy.
Where practicable, we use underground
mining methods at our Assets which are
currently less emissions intensive than open
pit operations and provide a wider range
of opportunities for emissions reduction.
We seek to conduct our activities socially,
ethically and in an environmentally
responsible manner. Our operating assets
in South Australia are connected to a grid
that is forecast to reach 100 per cent net
renewable energy by 2030 (currently circa
56 per cent). Electricity used by our Brazilian
Assets is already over 80 per cent renewable.
Our West Musgrave Project maintains
an ongoing commitment to an off-grid
renewable power solution with a future
focus on developing a roadmap to 100 per
cent renewable electricity generation and
reducing dependency on fossil fuels.
In 2020, we continued our focus on
incorporating climate change opportunities
and threats into our Strategy and business
planning. We released 18 Strategic
Aspirations which include emitting zero
Scope 1 emissions and systematically
reducing Scope 2 and 3 emissions. These
Strategic Aspirations are supported by our
Acceleration Priorities. In this year’s Annual
and Sustainability Report, we released our
Stakeholder Value Creation Metrics – which
include energy and emissions – to illustrate
our performance against our Strategy.
We continued to deliver against our TCFD
Action Plan, building on commitments made
in 2019 to implement the framework. As
outlined in the Action Plan, implementing
the TCFD framework is a multi-year process.
The following sections outline our progress
against the TCFD categories in 2020.
Stakeholder Value Creation
Metric: Net energy intensity
(per t Cu Eq)
Energy intensity is similar across our assets,
ranging from 16 to 18 GJ per t Cu Eq.
Our overall group energy intensity is
16.8 GJ per t Cu Eq.
Stakeholder Value Creation
Metric: Scope 1 & 2 emissions
intensity
Combined Scope 1 and 2 emissions
intensity is fairly consistent across our
assets, ranging from 1.4 tCO2-e per t Cu Eq
to 1.7 tCO2-e per t Cu Eq.
Stakeholder Value Creation
Metric: Renewable energy
percentage
Our Assets are in jurisdictions with
high renewable penetration, particularly
in Brazil where over 80 per cent of
grid electricity is renewable. Our
South Australian assets operate on
57 per cent renewable energy.
TCFD disclosures
Governance
The Board Sustainability Committee,
which met quarterly in 2020, maintains
oversight of material sustainability risks
(both opportunities and threats), including
climate change. The Committee also
supports the Board by maintaining oversight
of strategy, governance and compliance
relating to sustainability matters. In addition,
the Committee monitors trends and
developments in legislation and regulation
(refer to Governance Section of the Annual
and Sustainability Report, page 26).
Management implements OZ Minerals’
Governance structure and Risk Management
Framework, which encompasses
opportunities and threats associated
with climate change. To further support
management’s role in assessing and
managing climate-related risks, a ‘deep dive’
was undertaken in 2020 with the Executive
Leadership Team, led by the Group Manager
Government Relations & Climate. The deep
dive was designed to build understanding
of physical and transition risks, and the
context in which these are managed
for OZ Minerals’ global business. Senior
management also participated in a series of
dedicated asset and project climate-related
opportunity and threat workshops (see
Strategy and Risk Management below).
Strategy
The global energy system is shifting as
the world decarbonises. Copper is an
essential enabler of this transition as a
core component of electric mobility and
renewable energy, as well as the networks
which connect them. As a modern mining
company with a copper focus, we provide
this critical element of the low carbon
transition. Our Stakeholders are increasingly
focused on sustainable production of copper
and we are well placed to continue to meet
these expectations.
88
In 2020, OZ Minerals released our Strategic
Aspirations and Acceleration Priorities.
Climate change issues served as a key input
in this process, resulting in our Aspirations
to emit zero scope 1 emissions and strive
to systematically reduce scope 2 and 3
emissions across our value chain, strive
to minimise water use and adding value
when we do and consume and produce
in a way that generates zero net waste
and creates value for Stakeholders. These
Aspirations are supported by Acceleration
Priorities including reducing high-emissions
energy use and baselining our Scope 3
emissions.
CLiMate-reLated oPPortUnities
and threats
As outlined in the Risk Management
section of our TCFD disclosures, dedicated
workshops were conducted with our
Australian assets and projects to assess
climate-related opportunities and threats
in line with OZ Minerals’ Risk Management
Framework. Assets and projects have
developed specific controls and actions to
progress the opportunities and manage the
threats to suit their context, in line with
the devolved operating model and Risk
Management Framework.
sCenario anaLYsis
In 2020, we began scenario analysis with
our Australian Assets, Prominent Hill and
Carrapateena, to conduct assessments of
physical climate-related risks. Assessments
were based on a high-warming climate
change scenario consistent with ~4°C above
pre-industrial levels by 2100, with a ~2°C
warming scenario used to test sensitivity.
Specifically, climate change scenarios
were developed using several inputs:
Intergovernmental Panel on Climate
Change (IPCC) Assessment Report 5 (AR5)
Representative Concentration Pathways
(RCPs) as a basis. In particular RCP 8.5
and RCP 4.5.
The CSIRO’s Australian Climate Futures
tool was used to project changes in
climate variables (e.g. temperature,
rainfall, extreme rainfall, solar radiation,
etc.) at a scale relevant to OZ Minerals’
Australian assets.
The results of the Climate Futures
Tool were further supplemented with
projections from the SA Climate Ready
project, which provides dynamically
downscaled climate projections for South
Australia across six regions. Projections for
the SA Arid Lands and Alinytjara Wilurara
and Northern and Yorke regions are
relevant to OZ Minerals.
Given the limited divergence between
climate change scenarios over the next
10–20 years, timeframes were not limited to
current life of mine, but more appropriately
reflective of life of province.
oPPortUnities – redUCing greenhoUse
gas eMissions (transition)
Opportunities to reduce GHG emissions
identified by OZ Minerals’ Assets and
Projects included:
Intense rainfall events
Potential impacts: Site access for supplies
and shipment of product, direct impacts
to infrastructure and operations, increased
infrastructure maintenance requirements.
examining options to increasingly
Mitigating controls: Reviewing road
design specifications and maintenance
arrangements to consider future extreme
rainfall predictions, review of site
drainage infrastructure, review supply
chain inventory management considering
potential for disruptions, consideration of
potential extreme rainfall events in TARPs.
Risk Management
Climate change has been identified as
a strategic risk (both opportunities and
threats) by OZ Minerals since 2017. In
2020, a series of dedicated workshops
with operational personnel and senior
management were conducted with
OZ Minerals Australian Assets and projects
to Assess climate-related opportunities
and threats in line with OZ Minerals’
Risk Management Specification. In 2021,
this work will be undertaken across all
OZ Minerals’ Assets and projects.
Risk assessment workshops provided a
platform to build understanding of climate-
related risk in the context of the individual
Assets. Threat workshops utilised scenario
analysis based on IPCC AR5 (refer to
Strategy section of our TCFD disclosures),
while opportunity workshops focused
on identifying greenhouse gas reduction
initiatives to support OZ Minerals’ Strategic
Aspirations.
Consistent with OZ Minerals’ Risk
Management Specification, climate-related
risks (opportunities and threats) are captured
in Asset and project risk registers. Controls
and actions are captured against each risk,
with regular review of progress. Risks are
also reviewed regularly.
As part of a review of OZ Minerals’ suite
of Global Performance Standards in 2020,
several Environment Performance Standards
were updated to include considerations
relating to assessment and management of
climate-related threats and opportunities.
Our Global Performance Standards enable
us to effectively manage the material threats
and opportunities that are common across
OZ Minerals. The Standards apply to our
employees, directors, officers, contractors,
consultants, and any other party when
undertaking work for or on behalf of
OZ Minerals.
electrify vehicle fleet over time, particularly
diesel-powered haulage (Scope 1)
engaging with logistics partners to
reduce transport emissions (Scope 3)
Considering shifting demand peaks for
energy-intensive plant and equipment
to times of high renewable penetration
(Scope 2)
implementing new and different
processing techniques to reduce
mill energy consumption
implementing Ventilation-On-
Demand projects which reduce energy
consumption from underground
ventilation systems (Scope 2)
considering greater renewable energy
procurement (Scope 2)
evaluating onsite renewable energy
options, particularly for site villages
(Scope 2)
improving data collection processes
and analytics to monitor and identify
opportunities for improvement.
threats – iMPaCts of CLiMate
Change (PhYsiCaL)
Scenario analysis revealed extreme summer
temperatures and intense-rainfall events
to be the key potential climate-related
physical impacts for Prominent Hill and
Carrapateena. These impacts are managed
as components of broader extreme weather
threats by our Assets which maintain a
suite of controls to reduce the impact. The
threat of extreme weather was rated as
Material for the Company according to the
Risk Management Specification. Consistent
with our risk management processes, re-
assessments are undertaken on a regular
basis to capture changes in operations
and climate over time.
The potential impacts and mitigating
controls for extreme heat and intense
rainfall events include:
Extreme heat
Potential impacts: Employee safety
(heat exposure), plant and equipment
operation, power supply reliability,
potential flight payload restrictions.
Mitigating controls: Working in
thermal conditions health and safety
protocols, increased cooling capacity for
underground ventilation, Trigger-Action-
Response-Plans (TARPs) and design
specifications and standards to include
predicted temperature increases.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
89
Metrics and Targets
In 2020, we released our Stakeholder Value Creation Metrics which illustrate how we create value for our Stakeholders in line with our
Strategy, building on our existing disclosures. We established a broader suite of metrics on which our Assets report monthly, including
metrics associated with climate-related issues. These metrics complement our Strategic Aspirations and Acceleration Priorities released
in 2020. As outlined in the Strategy section of our TCFD disclosures, our Strategic Aspirations and Priorities include emitting zero Scope
1 emissions, striving to systematically reduce Scope 2 and 3 emissions across our value chain, minimising water use and consuming and
producing in a way that generates zero net waste.
oUr tCfd aCtion PLan
TCFD category and
recommended disclosures
2020 commitments
Enhancing our approach
2020 actions
2021 actions
Defining our performance
>2022
Maturing our approach
Climate opportunity and threat
workshops with Assets/Projects,
SME input on risk assessments,
Scope 3 Framework developed
Global Performance Standards
reviewed and updated to include
aspects of climate risk
Bi-annual review of climate-related
control actions
Continue to build employee
capability regarding climate-
related risk
Further build internal capability,
including Scope 3 emissions
Review governance
approach to climate-
related threats and
opportunities
Review climate-related
roles and responsibilities
Consider material
climate-related threats
and opportunities in
Asset planning
Enhance suite of internal
decision-making tools
Climate-risk (threat and
opportunity) workshops conducted
with Assets/Projects using physical
climate scenarios
Engagement with analysts and peer
benchmarking of climate change
risk management approaches
Exploration of partnering
opportunities to reduce Scope 1
and 3 emissions
Benchmarking of key metrics
and disclosure standards
(Metrics Project)
Emissions reduction Strategic
Aspirations and Acceleration
Priorities
Carbon pricing increasingly
used and included in 2021
business planning
Conduct further physical and
transition climate-related
opportunity and threat assessment
using scenario analysis,
incorporating assets and corporate
functions. Consider outcomes as
part of annual strategy reviews
Implement priority control actions
Further refine internal decision-
making tools (e.g. carbon pricing)
Undertake transition risk
assessment using scenarios
aligned to Paris Agreement goals
Consider approaches for financial
analysis and disclosure
Enhance suite of GHG reduction
tools
Review and assessment of
extreme weather (physical)
risks at Australian assets
Review and assessment of
GHG reduction opportunities
at Assets and Projects
Capability building with
Brazil team
Review of Corporate GHG
emissions risks
Ensure climate-related opportunity
and threat control ownership is
clearly defined
Further refine approach
to climate-related risk
management
Support risk owners to manage
climate-related opportunities
and threats
Review and update physical
climate risk assessments
Governance
a) Board’s oversight of climate-
Further build capability
related risks and opportunities
b) Management’s role in assessing
and managing climate-related
risks and opportunities
across business to implement
TCFD via The OZWay
Gap analysis of climate risk
management into governance
practices (Policies, Global
Performance and Process
Standards)
Strategy
a) Climate-related opportunities
and threats the organisation
has identified over short,
medium, and long term
Begin asset scenario analysis
Consult with key Stakeholders
and undertake peer and market
benchmarking
b) Impact of climate-related risks
and opportunities on business
strategy and financial planning
c) Resilience of organisation’s
strategy, including to a 2ºC
or lower scenario
Further explore strategic
partnering opportunities
Introduce climate adaptation
to Transformation function
Integrate climate risk,
including carbon pricing into
investment decisions and
project evaluations
Risk management
a) Process for identifying and
Review current
assessing climate-related risks
and opportunities
climate-related risks
b) Process for managing climate-
related risks and opportunities
c) How climate-related risk
management is integrated into
overall risk management
Metrics and targets
a) Metrics used to assess climate-
related risks and opportunities
in line with Strategy and risk
management processes
b) Scope 1 and 2 GHG emissions,
and if appropriate, Scope 3
c) Targets used to manage
climate-related risks and
opportunities and performance
against targets
Consider appropriate metrics
Establish quarterly reporting
by Assets of key metrics
Benchmarking of disclosure
frameworks, standards and
peers’ approaches
Develop plan for public reporting
on financial related disclosure
of climate related risk
Engagement with ESG analysts
Integrate performance reporting
Continue to report
on material metrics
Report performance
against Strategic
Aspiratons and goals
Leverage Stakeholder
re disclosures
Establishment of internal monthly
Asset metrics reporting framework
Development of Stakeholder
Value Creation Metrics
into disclosures (annual, quarterly,
monthly, website)
Support delivery of Asset/Project
GHG reduction opportunities
Value Creation Metrics
to embed performance
Baseline Scope 3 emissions
Report against Stakeholder
Value Creation Metrics
90
Case Study: Australia’s first battery powered
vehicle for underground explosive charging
As part of realising our Strategic Aspirations, Carrapateena is committed to
investigating various technologies and strategies to reduce GHG emissions at site.
This commitment has seen the Asset trial a variety of electric vehicles in 2020, one of
which is the Charmec MC 605 VE SmartDrive. It is Australia’s first battery-powered
zero emissions vehicle for underground explosive charging. This has complemented
the ongoing Zero Automotive partnership that is developing the ZED70 Ti electric light
vehicle. The new, street-legal ZED70 Ti includes a specifically selected Li-Ion battery
chemistry, battery housing, control systems and charging capability to endure the
hyper saline underground environment at Carrapateena.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
91
WATER
* Water stress as defined by the World Resources Institute
Aqueduct Water Risk Atlas.
AIR QUALITY
Stakeholder Value Creation
Metric: Water consumed per
tonne copper equivalent
In 2020, our Australian assets consumed
between 0.06 and 0.08 ML per t Cu Eq.
Carrapateena recycled 59 per cent of water,
while Prominent Hill recycled 22 per cent.
Water is an essential component for our
operations and a resource our Stakeholders
rely on. Each of our assets and the context in
which they operate is unique. As such, they
independently monitor and work to optimise
the net water consumed per equivalent
copper tonne, conscious of the need to
protect life on land and to responsibly
consume a critical and potentially shared
resource. We recognise the need to manage
our use of water and have incorporated
this in our Strategic Aspiration to strive to
minimise water use and add value when
we do.
Our Australian assets, Prominent Hill and
Carrapateena, are located in arid areas
and are dependent on groundwater to
sustain operations. Groundwater wellfields
at Prominent Hill are located on nearby
pastoral stations, where pastoralists draw
water from shallower or discrete aquifers in
the majority of cases. Carrapateena utilises
hypersaline water that is not suitable for
pastoral activities.
This hypersaline water is processed via a
reverse osmosis water treatment plant to
provide potable water. The Carrapateena
Tjungu Camp provides treated greywater
suitable for livestock consumption to the
local pastoralist to add value to the pastoral
operations.
Our water monitoring program involves
measuring and monitoring water levels and
quality in previously agreed pastoral wells,
as well as conducting sediment monitoring,
including metal concentrations and
acidity, to detect any potential changes in
downstream surface water quality.
Our Carajás Hub Assets in Brazil are
situated in a region with a high annual
rainfall of over 1,800 mm. Our Antas
mine in the Carajás manages a Water
Resources Management Program which
aims to monitor and evaluate surface and
groundwater.
Stakeholder Value Creation
Metric: Water withdrawal in areas
of extreme water stress (%)
No OZ Minerals assets withdraw water
in areas of extreme water stress.*
Dust is among the largest air quality
emissions from the majority of our
operations, generated by stockpiling
materials and vehicles moving over
unsealed surfaces. All assets monitor
and manage air quality via an Air Quality
Management Plan as per the Air Emissions
Performance Standard. As our operations
transition to underground, our dust
impacts have reduced. Control measures
to reduce the amount of dust we generate
include active dust suppression on roads,
speed restrictions, and regular road
maintenance. Sampling verifies that our
air quality management has effectively
mitigated adverse impacts on workers,
the community and the environment at
Prominent Hill, Carrapateena and Carajás
Province. There are no ozone-depleting
substances, persistent organic pollutants or
stack emissions produced at these Assets.
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.
92
WASTE AND TAILINGS
Stakeholder Value Creation
Metric: Non-mineral waste
produced per tonne of copper
equivalent
Non-mineral waste intensity across our
assets ranges from 0.02 t per t of Cu Eq to
above 0.1 t per t Cu Eq. Generally waste
intensity is higher at newly constructed
assets as more materials are utilised in
bringing the operation to production.
OZ Minerals has active tailings facilities
at Prominent Hill and Carrapateena in
Australia, and at the site of the Antas
mine in the Carajás East Hub in Brazil. The
Carajás East Hub also processes ore from
the Pedra Branca satellite mine. In line with
our Global Performance Standards, in 2020
all tailings facilities underwent inspections
by independent geotechnical engineering
specialists with experience in the design,
operation and auditing of tailings dams. The
results of inspections were reported to the
Board Sustainability Committee.
Prominent Hill has one Tailings Storage
Facility (TSF) located within the Integrated
Waste Landform (IWL) which includes the
Waste Rock Dump (WRD). As an IWL, the
TSF is surrounded by a wide buttress of mine
waste forming the Southern WRD within
which a clay-lined perimeter embankment
is constructed. The TSF is constructed with
the downstream construction method.
Carrapateena ramped up to reach a mine
production rate of 4.25 Mtpa during
November 2020, following achievement of
the milling nameplate rate in March 2020.
The Carrapateena Mine Stage 1 TSF is a
cross valley starter embankment. The initial
lift (Stage 2) has been constructed using
a downstream raise methodology with
similar construction materials to the starter
embankment. Subsequent raises (Stages
3-6) will be constructed using an upstream
raise methodology using consolidated
tailings with waste rock armouring of the
downstream faces.
The Antas mine TSF embankment has been
raised only once using the downstream
construction method.
Our Tailings Global Performance Standard
applies across the Company and sets
out our approach to managing tailings
within the TSFs. The Standard is written
to ensure TSFs are designed, constructed
and managed to provide for the safe,
long term impoundment of mine tailings
and residues to prevent uncontrolled
releases and seepage to groundwater. We
conduct groundwater sampling to monitor
parameters such as depth to water, salinity,
pH, and metal concentrations as part of
our tailings management. OZ Minerals’
Australian TSFs have been designed,
constructed and operated in accordance
with ANCOLD (Australian National
Committee on Large Dams) requirements.
In Brazil, quality assurance and monitoring
activities are undertaken as normal course of
business with bi-monthly reporting provided
to the Mines Department (ANM).
We are currently completing reviews of
our Tailings Global Performance Standard
and are considering the recently-published
Global Industry Standard on Tailings
Management as part of that review.
No potential acid-forming (PAF) material
was mined at Prominent Hill or Carrapateena
over the reporting period, with the Assets
producing 3,483,354 tonnes and 1,574,528
tonnes of waste rock, respectively. Most
of the waste rock generated is placed in
rock dumps, with a proportion of non-
acid forming (NAF) rock used to construct
mine infrastructure, such as the TSF 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.
Case Study: Commissioning of Prominent Hill Malu Paste PlantThe management of mine tailings has been associated with significant safety incidents globally impacting stakeholders. In 2020, Prominent Hill commissioned the Malu paste plant to utilise this waste stream as a valuable resource to support the mining process by using it in underground mining areas that require backfilling. This utilisation of tailings as a substitute has reduced reliance on the Prominent Hill TSF, reducing risks for all stakeholders associated with storage, management, closure and licensing.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
93
LAND AND BIODIVERSITY
Stakeholder Value Creation
Metric: Area (ha) disturbed in
high biodiversity conservation
areas
No land was disturbed in high biodiversity
conservation areas at our Assets during
2020.
OZ Minerals has established and continues
to manage Significant Environmental Benefit
(SEB) offset areas at our Prominent Hill and
Carrapateena mines. The SEB offset areas
support habitat by managing threatening
processes during operations and restoration
of selected onsite areas cleared to enable
mining activities. Flora and fauna monitoring
of the SEB offset area at Prominent Hill
has been continuously undertaken since
2006 and 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 (Cth), and the Chestnut-breasted
whiteface listed as rare under the National
Parks and Wildlife Act 1972 (SA). All three
species are also listed in the International
Union for Conservation of Nature’s
(IUCN) Red List of Threatened Species. At
Carrapateena, the nationally threatened
Plains Mouse occurs within the project area,
while a further three species listed under the
National Parks and Wildlife Act 1972 (SA)
have been identified as occurring within or
in proximity to the project, including the
plant species Frankenia subteres (rare), the
Perigrine falcon (rare) and the Australian
bustard (vulnerable). Two environmental
offset areas are established to support the
Carrapateena mine. In the Carajás region,
our teams have cultivated a nursery to
support the maintenance of local biodiversity
and revegetate disturbed areas.
Case Study: Plains Mouse Motion Capture In 2020, OZ Minerals Carrapateena established a low impact, year-round surveillance for the nationally protected species, the Plains mouse. The project is a partnership between OZ Minerals, engineering consultancy Jacobs and our pastoralist neighbours at South Gap Pastoral Station. Camera traps were set up at eight locations in the Northern SEB offset. Each location featured a night-active motion sensor camera and a bait to attract the Plains mouse and any other small marsupials or larger mammals. The aim of this first phase was to gain a greater understanding of the gilgai habitat while also gathering data on Plains mouse populations in the area. This project involved a high level of collaboration with ecologists and landowners and will provide a greater understanding of Plains mouse distribution in a broader regional sense. The OZ Minerals detection methodology, which aligns to objectives within the National Recovery Plan, has been revised to provide a more accurate understanding of population response dynamics following large rain events which are the catalyst for boom cycles. 94
REHABILITATION
AND CLOSURE
The potential social and environmental
impacts of mine closure are considered
throughout mine life through regular
engagement with Stakeholders. To further
understand these impacts and identify
new opportunities, OZ Minerals joined
the Cooperative Research Centre for
Transformations in Mining Economies
(CRC TiME) in 2020. CRC TiME brings
together over 70 leading mining and mining
service companies, regional development
organisations, State and Commonwealth
governments and research partners.
This unique coalition brings scale and
coordinated investment into innovative
research that addresses the complex
challenges associated with mine closure
and relinquishment.
OZ Minerals’ South Australian operations
have documents and programs detailing
closure, including the Supporting Works
Plan and the Programs for Environment
Protection and Rehabilitation (PEPRs).
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 liabilities. Closure
planning is updated throughout the mine’s
operational life to identify and reduce risks
and unknowns 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, and
progressive rehabilitation is undertaken
where possible. At Prominent Hill, a
mature mine, rock armouring of the North
Waste Rock Dump has been completed
and the rock armouring of the South
Waste Rock Dump is nearing completion.
Rock armouring of the TSF is 85 per cent
complete. 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 all stakeholders.
We support community initiatives and
sustainable local businesses as a part of
our community engagement program.
Case Study: Cooperative Research Centres (CRC) Transformation in Mining Economies (TiME) CollaborationA Life of Mine plan for resource extraction can effectively integrate progressive closure and rehabilitation into mine development, expansion and operation while retaining the opportunity to create a ‘second life’ for assets. OZ Minerals is partnering with Cooperative Research Centres for Transformation in Mining Economies (CRC TiME) which brings together over 70 partners across all stakeholder groups to help inform our closure and rehabilitation planning and processes. In December 2020, OZ Minerals in conjunction with CRC-TiME, Adelaide University, University of South Australia and the University of Western Australia held workshops to collaborate on opportunities to build these concepts into the scopes for the Prominent Hill Expansion (PHOX) study and Carrapateena Expansion (CarraX) study.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 95
96
SOCIAL
PERFORMANCE
OUR CONTEXT:
Understanding the needs and interests
of our Stakeholders informs our Choices
and how we can create value. We
understand that every stakeholder,
context and host community is unique.
Our Risk Management Specification
considers opportunities and threats and
focuses our decisions on the impact
of our actions on our Stakeholders.
Our Global Performance Standards set
out our minimum mandatory control
requirements, encourage co-development
with Land Connected and Indigenous
Peoples and other Stakeholders. They
also provide processes to ensure all
decisions are underpinned by Free Prior
and Informed Consent (FPIC).
SUPPORTING
DOCUMENTS:
PERFORMANCE STANDARDS
ozminerals.com/uploads/docs/OZ_Minerals_
Global_Performance_Standards.pdf
VALUE CREATION POLICY
ozminerals.com/uploads/docs/191024_
OZL_Value_Creation_Policies.pdf
OZ MINERALS SPONSORSHIPS
ozminerals.com/sustainability/sponsorship/
VOICE TREATY TRUTH STATEMENT
ozminerals.com/sustainability/voice-treaty-
truth/
MODERN SLAVERY ACT STATEMENT
ozminerals.com/sustainability/modernslavery
OUR CHOICES:
Strategic Aspirations
Our business model empowers assets
to optimise for their local conditions.
We deliver the activities along our value
chain to enable our local Stakeholder
aspirations for generations to come.
We work closely with our Stakeholders to
create mutual value by building each other’s
capability and capacity.
Our Assets are brought to full value early
through a rapid approach to our project
pipeline and provide optimal value for
Stakeholders.
Material topics
Land Connected and Indigenous Peoples
(including Cultural Heritage), p. 98, 100
Climate change and emissions, p. 87
Procurement Practices and business ethics,
p. 104
Human rights, p. 101
Partnerships and Social performance, p. 98
Water, biodiversity and energy, p. 87, 91, 93
Economic performance, p. 102
Employment, Training and Education, p. 109
Our Performance: Stakeholder
Value Creation Metrics
Workforce – local / state / out of state / Land
Connected and Indigenous Peoples, p. 117
Local employment and value spent
with local suppliers, p. 114
Average duration for resolution of concerns,
complaints and grievances, p. 97
Unauthorised cultural heritage breaches
/ significant environmental and social
incidents, p. 100
Social contribution – quantity and case
studies, p. 103
Partnering case studies, p. 98
Modern Slavery Act implementation
and Number of incidents, p. 101
OZ MINERALS sUstainaBiLit Y rePort
97
WORKING WITH
STAKEHOLDERS
Stakeholder Value Creation
Metric: Number and average
duration for resolution of
concerns, complaints and
grievances
We recorded two complaints in our
Stakeholder Management System for 2020.
The average resolution time was 7 days.
We seek to build and maintain strong,
transparent, supportive relationships with
all Stakeholders. We operate in host and
local communities based on the principles
of quality contact, and procedural and
distributional fairness. Our Assets have
Stakeholder engagement programs based
on sustained, ethical and context specific
engagement processes with regulatory
bodies, suppliers, government agencies,
communities, Land Connected and
Indigenous Peoples on which we may have
a direct, indirect or a cumulative impact.
We understand our activities will have
an impact and each host community has
unique knowledges, experiences, histories
and values. Our approach is to work
collaboratively to identify shared aspirations
and benefit from our activities. Working this
way ensures collaboration, input and co-
design from local Stakeholders and provides
the opportunity for us to understand
the environmental, social and economic
implications of our work, and minimise
adverse impacts. We also engage with key
special interest groups and stakeholders
who may potentially be affected by Asset
activities to better understand stakeholder
values and potential impacts. We provide
accurate and fit-for-purpose information
in a timely manner and anticipate, and
proactively address, community and
stakeholder issues and concerns as part
of the engagement process. Our Global
Performance Standards require culture
and context specific mechanisms to be
in place, to capture feedback, concerns,
complaints and grievances so they are
promptly and appropriately addressed.
Our Asset local level agreements contain
no clauses restricting Stakeholders’ rights
or ability to escalate concerns. Our Asset
general managers have structured and
direct relationships with Land Connected
and Indigenous Stakeholders. Each Assets’
community relations function monitors
and reviews major communication and
consultation activities to assess their
effectiveness and promote internal and
external stakeholder feedback.
Case Study: Stakeholder Engagement How we engage and maintain our stakeholder relationships is important to us. In 2020, OZ Minerals hosted visitors to our Prominent Hill site from the Woomera Prohibited Area (WPA) Advisory Board. The WPA Advisory Board provides guidance around coexistence arrangements in the WPA and is supported by the relevant Commonwealth and South Australian Government agencies. 98
PARTNERING AS A
STRATEGIC ENABLER
LAND CONNECTED AND
INDIGENOUS PEOPLES
VOICE, TREATY, TRUTH
ozminerals.com/sustainability/voice-treaty-
truth/
Stakeholder Value Creation
Metric: Partnering Case Studies
Enabled by Partnering, in 2020, we
continued to co-develop and pursue
value creation with our Stakeholders.
Antakirinja Matu-Yankunytjatjara
Aboriginal Corporation
‘Tjunguringanyi’, p. 99
Kokatha Aboriginal
Corporation, p. 100
Prominent Hill Underground
Mining Alliance, p. 84
Global Maintenance Upper
Spencer Gulf, p. 104
Capture the Spark, p. 17
Partnering has been an element of
OZ Minerals’ Strategy since 2019. We
believe Partnering provides us a process
by which we can collaborate and draw
upon expanded skills and competencies for
mutual benefit enabling us to create value in
different contexts with diverse Stakeholders.
In 2020, developing a partnering framework
for application across the Company was
identified as an Acceleration Priority. The
focus on partnering follows successful
partnerships established with Traditional
Owner groups at Prominent hill and
Carrapateena, and the partnership with
Global Maintenance Upper Spencer Gulf
(the local industry body).
As each community and Asset is unique,
a comprehensive understanding of the
history, knowledge systems, world views,
values, beliefs and experiences of host
communities is required to underpin
ethical, respectful, inclusive and effective
engagement. At our Prominent Hill and
Carrapateena Assets, the general managers
have a direct, structured, regular and
sustained liaison with Traditional Owners.
Our current Brazilian Assets’ workforces
reside locally and are not located in
areas occupied by Land Connected and
Indigenous Peoples. The requirements
regarding engagement with Land Connected
and Indigenous Peoples are set out in the
OZ Minerals Land Access, Acquisition and
Resettlement Global Performance Standard.
In line with the Standard, each asset must
operate in accordance with the principles of
the United Nations Declaration of the Rights
of Indigenous Peoples (UNDRIP).
In Australia, we recognise and respect the
unbroken cultural connection and cultural
authority of Aboriginal and Torres Strait
Islander Peoples. Our value creation and
partnering approach is based on our ability
to ensure all decisions are underpinned by
FPIC, equity, transparency, reciprocity, and
respect. Partnering has provided us with a
process to collectively build sustained mutual
respect and knowledge to deliver genuine
partnerships with our Traditional Owners.
Partnering has enabled relationships
underpinned by trust, transparency, ethical
listening, respect and integrity. It allows
us to build a common understanding
and language, identify opportunities and
continually learn from each other to work
towards shared goals.
Voice, Treaty, Truth
We recognise Aboriginal and Torres Strait
Islander Peoples as the first people of
Australia and the importance to all of us
for their voice to be heard. We support
efforts being made to achieve this next
step in National Recognition. In support of
the principles of Voice, Treaty and Truth,
we undertake to continue working with
our Traditional Owner partners in the spirit
of shared value and mutual obligation to
create sustainable benefits by leveraging,
developing and building on our shared
aspirations, while protecting and respecting
country and culture.
Our commitment is enshrined in our
partnering agreements that inform the
management of our production Asset
specific Native Title Mining Agreements.
Kokatha Aboriginal Corporation and
Carrapateena Mine – Nganampa palyanku
kanyintjaku ‘Keeping the future good
for all of us’.
Antakirinja Matu-Yankunytjatjara
Aboriginal Corporation (AMYAC) and
Prominent Hill Mine – Tjunguringanyi –
tjaku ‘Coming together’.
Our West Musgrave Project is in the
process of developing our relationship
with the Yarnagu People of the
Ngaanyatjarra Lands.
reConCiLiation aCtion PLan (raP)
The nature of our business and industry
enables us to have direct and long-standing
relationships with Traditional Owners
(Land Connected and Indigenous Peoples).
After extensive consultation with our
Traditional Owners, it was their view that
our Partnering Agreements superseded a
collective company RAP.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
99
Case Study: Tjunguringanyi (working together) Antakirinja Matu-Yankunytjatjara Aboriginal Corporation (AMYAC) and OZ Minerals Prominent Hill’s Native Title Mining Agreement (NTMA) was established with the Antakirinja Matu-Yankunytjatjara Aboriginal Corporation (AMYAC) in 2006. Since then, the goals and aspirations of AMYAC and OZ Minerals have evolved significantly. This passage of time prompted a re-examination of our Agreement in early 2019 to ensure it is fully realising the mutual benefits of mining through collective commitment and investment. A three day ‘health check’ workshop was held to share lessons from the past, our mutual aspirations, and agree on how to best achieve our goals. The process that emerged from the health check was Tjunguringanyi or ‘Working Together’. The health check workshop was attended by the AMYAC Board, senior community members and OZ Minerals’ CEO and executive team members. We have now developed a shared vision and values that have become the benchmark for how we work together. They shape our expectations for how we operate at Prominent Hill and promote a diverse and inclusive workplace for AMYAC workers and Indigenous employees more broadly. Tjunguringanyi has enabled an increase in Indigenous employment at Prominent Hill, from five per cent in 2018 to more than 9 per cent in December 2020. The shared values of Tjunguringanyi are: Kulini – listening to each other Ngarpartji Ngarpartji – reciprocity Kunpun – sustainability Nintiringanyi – making informed decisions.Tjunguringanyi is centred around our collectively agreed values illustrated in the graphic above, and functions with structured meetings held quarterly with the leaders of each organisation. This process has contributed to a much deeper understanding of each organisation’s values and of the impacts of our actions. Open honest and transparent dialogue has challenged assumptions and broken barriers that have been critical in maintaining and enhancing how we work together during the disruption of COVID-19.In 2020 the Antakirinja Matu-Yankunytjatjara Aboriginal Corporation (AMYAC) and OZ Minerals were jointly recognised and received the Premiers Award for Energy and Mining for Community – See short video youtube.com/watch?v=tdSTiV-plI4 100
CULTURAL HERITAGE
Stakeholder Value Creation
Metric: Unauthorised cultural
heritage breaches/significant
environmental and social
incidents
In 2020, we did not record any
unauthorised cultural heritage breaches
or significant social or environmental
incidents at our operations
We recognise that cultural heritage is
the endowment that each generation
receives and passes on. We understand
the fundamental role the respect and
preservation of culture and heritage plays in
how we partner with Land Connected and
Indigenous Peoples in Australia and globally.
We understand that in many contexts, the
land and natural resources with which we
interact are tied to the Land Connected
Peoples’ culture and can be the basis of all
social identity and development.
When developing local level agreements to
enable resource extraction, we consider that
protecting and managing cultural heritage
assets jointly with communities contributes
to the quality of our relationships and
is a foundation for creating value for all
stakeholders.
Our Cultural Heritage Global Performance
Standard requires all Assets to work with
Land Connected and Indigenous Peoples
to proactively respect and protect heritage.
At all stages of our project development
lifecycle, we seek to collaborate and partner
with Land Connected and Indigenous
Peoples to co-develop the Asset footprint
and fit for purpose cultural heritage
management plans and awareness training.
Cross-cultural awareness training programs
are offered to all contractors and employees.
The training includes raising awareness on
heritage and artefact finds and the protocols
for working in areas of cultural significance.
Case Study: Partnering on Cultural Heritage Management for Carrapateena Project Development OZ Minerals and the Kokatha Aboriginal Corporation (KAC) partnered to inform the development of the Carrapateena mine. Since 2016, extensive cultural heritage survey works have been completed to define the location and construction methodology of the project infrastructure including but not limited to the Tjungu village and airstrip, bore fields, processing infrastructure, Tailings Storage Facility, communications infrastructure, electricity infrastructure and access roads. To enable this extensive development of the Carrapateena Project, teams and representatives from the Kokatha Aboriginal Corporation established a cultural heritage services business that completed over 210 days of cultural heritage surveys, equating to over 17,800 hours of field work.This early engagement and collaborative fieldwork enabled Stakeholder values to inform the design of the project and was enshrined in the Partnering Agreement, Nganampa palyanku kanyintjaku ‘Keeping the future good for all of us’. This Partnering orientation to project development created value for all stakeholders by embedding the joint values of both organisations to ensure all decisions were based on FPIC. During construction of the Carrapateena mine, Kokatha Aboriginal Corporation cultural heritage monitors were on site for over 418 days pre-pegging work areas prior to land disturbance activities and monitoring land disturbance works. This collaboration with the Kokatha Aboriginal Corporation and the Carrapateena Project team enabled the completion of construction on schedule with no cultural heritage breaches and no unauthorised land disturbance activities. During the project duration, over 26,000 hours of field work was completed with no lost time injuries.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
101
HUMAN RIGHTS
PERFORMANCE STANDARDS
ozminerals.com/uploads/docs/OZ_Minerals_
Global_Performance_Standards.pdf
Stakeholder Value Creation
Metric: Number of human rights
incidents
In 2020, we did not identify any Human
Rights incidents or instances of Modern
Slavery in our operations or supply chains.
Our Human Rights Global Performance
Standard is guided by international
guidelines, including 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, contractors and suppliers
through our Code of Conduct and
Stakeholder Value Creation Polices. We
have a variety of programs to promote
compliance and ethical business. Asset
induction training raises awareness of
human rights responsibilities with senior
management, employees, contractors
(particularly security personnel), and other
Stakeholders in the Asset’s sphere of
influence. Maintaining and improving our
systems and processes helps to minimise
the risk of human rights abuses in
our operations or in our supply chain
(Modern Slavery).
MODERN SLAVERY
MODERN SLAVERY ACT STATEMENT
ozminerals.com/sustainability/modernslavery
ANTI-BRIBERY
AND CORRUPTION
Stakeholder Value Creation
Metric: Modern Slavery Act
implementation
In 2020, we undertook the pre-work
required in order to release in conjunction
with this report our first Modern Slavery
Statement (February 2021) as part of how
we protect and manage human rights in
our Assets and supply chains.
We seek to address the risk of Modern
Slavery in our operations and supply chains
and comply with the Modern Slavery Act
2018 (Cth). Our people are our best defence
in identifying and helping us to address any
instances of modern slavery. It is therefore
critical they understand what modern slavery
is and how to detect it. We also want them
to understand how our modern slavery
risk management fits into our broader risk
management activities. We use a variety
of different forums and tools to raise this
awareness. For example, our online modern
slavery training includes defining what
Modern Slavery is, what our responsibilities
are and how to identify instances of modern
slavery.
We continue to work with our supply chains
to meet the new reporting obligations.
The OZ Minerals public and internal facing
Anti-Bribery and Corruption material was
updated in 2020. OZ Minerals has public-
facing speak-up material, which is supported
by an internal ‘Speak Up’ Global Process
Standard, to provide people with pathways
and options to elevate concerns about
ethical and appropriate behaviour.
Case Study: CentroGold Training in Human RightsIn 2020 all employees and contractors of the CentroGold project received Human Rights and Ethics training on the UN Voluntary Principles and Human Rights on Security, and Code of Conduct. 102
ECONOMIC PERFORMANCE
AND SOCIO-ECONOMIC
CONTRIBUTIONS
Stakeholder Value Creation
Metric: Social contribution –
quantity and case studies
Our total economic contribution for
2020 was more than $1.39 billion
and included:
more than $79.2 million in wages and
benefits in Australia and Brazil
payments to Suppliers of over
$1.13 billion
$74.6 million in dividends to shareholders
$57.8 million in royalties and
$48.3 million in taxes
$2.3 million in social contributions
including ongoing partnerships, bushfire
relief and through our COVID-19
Stakeholder Support Program.
Operating a sustainable and 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,
income taxes, social investment, payment of
dividends, and payments to our workforce
and suppliers.
Prominent Hill and Carrapateena
significantly contribute to local and regional
economies. Operationally, significant
value is generated through employment
both directly and through our contracting
partners, 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. The vast majority of
the Carajás workforce are from the local
community. More details are available in
the Financial Report (page 36) and in the
socioeconomic performance tables of this
section of the report (page 112-117).
Stakeholder Value Creation
Metric: On Time Payment
By number – 15,325 paid on time, by value
– $A 426,337,697 paid on time (36%)
Stakeholder Value Metric:
Supplier value ($A) by jurisdiction
Local – $20,865,381 over 83 suppliers,
State – $282,708,135 over 746 suppliers,
National – $853,685,412 over 937 suppliers,
International – $51,674,579 over 140
suppliers, total spend $1,208,933,507
over 1,411 suppliers
Case Study: COVID-19 Stakeholder Support ProgramThe COVID-19 pandemic has had an immense global impact. To support our Stakeholders in building capability and resilience, and to protect and enhance our communities’ health and wellbeing, OZ Minerals established a $4 million Stakeholder Support Program. The COVID-19 Stakeholder Support Program is designed to support our Stakeholders to build resilience and protect and enhance community wellbeing throughout the COVID-19 period and to support their sustainability post COVID-19. The Program is continuing into 2021.The Program has been designed to actively respond to material local needs to identify support opportunities, so our resources and contributions are aligned with, and amplify, existing COVID-19 programs and initiatives.In Brazil support has included: local hygiene awareness campaigns Personal Protective Equipment (PPE) for local health care workers, employees and their families testing kits for the local municipalities. In Australia support has included: funds for the South Australian local industry association, Global Maintenance Upper Spencer Gulf, to increase member marketing capability and grow their businesses Kokatha Aboriginal Corporation support for food for people unable to return to their lands due to restrictions on movement funds for a health coordinator for the Ngaanyatjarra Council in Western Australia.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
103
COMMUNITY INVESTMENT
AND SPONSORSHIP
In 2020, we contributed to a 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
communities’ wishes. Our sponsorships
and community investment initiatives strive
to support organisations or projects to
achieve sustainable outcomes. In 2020, we
contributed $1.9 million in sponsorships and
donations. Our social contribution program,
Educating the Next Generation, provides
ongoing support to the Clontarf Foundation
which encourages Aboriginal boys to remain
in secondary school through sport and to
The Smith Family to provide educational
support to girls predominantly in the areas
near our South Australian Assets. We also
provide ongoing support to the Royal Flying
Doctor Service, which in turn provides
medical assistance to our remote mine sites
and the surrounding remote communities.
In early 2020, we donated to the Country
Fire Service and the Nature Foundation
following the bushfires in South Australia.
At the onset of the COVID-19 pandemic,
we established a Stakeholder Support Fund
which provided over $1.1 million in funds to
support communities and organisations in
the areas where we operate in Australia and
Brazil. Direct donations are complemented
by in-kind contributions and employee
volunteering.
Case Study: Royal Flying Doctor ServiceOZ Minerals has continued our partnership with RFDS — OZ Minerals is committed to promoting a culture that ensures communities close to our operations benefit from our presence.In developing sponsorships and community investment initiatives, we try to avoid creating dependency; rather support organisations or projects to achieve self-sustaining outcomes.Case Study: Brazil COVID-19 Response As the world comes together to combat the COVID-19 pandemic, supported by the OZ Minerals COVID-19 Stakeholder Support Program, the OZ Minerals Brazil team has been working with employees, suppliers and host communities in the donation of COVID-19 tests, PPE, hygiene kits and medicine to local communities. 104
TAX TRANSPARENCY
LOCAL ENTERPRISE
AND PROCUREMENT
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 law. OZ Minerals formally
registered with the Board of Taxation’s
TTC in 2020 and provides the following
information in accordance with the TTC:
Tax governance
The objectives of OZ Minerals’ tax risk
management include the prevention
of disputes with tax authorities 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
are maintained at insignificant levels for
tax exposures across our global business.
While OZ Minerals is entitled to certain
tax concessions in the ordinary course of
our business, we have no appetite to seek
concessions that are motivated by the
avoidance of tax.
Australian tax-related
contribution summary
A summary of OZ Minerals’ 2020 employee
and tax related contributions to State and
Federal tax authorities is provided in the
performance data tables on page 115-116.
Stakeholder Value Creation
Metric: Supplier value by
jurisdiction – local, state,
national, international, total
We seek to create enduring and sustainable
value for our host communities, states
and territories associated with our assets
and seek to employ local people and
engage local 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 not
competitive. We also help local businesses
understand our pre-qualification processes
and procurement standards. Local, Land
Connected and Indigenous Peoples are
encouraged to apply for positions and
tender for business opportunities with
our Assets.
OZ Minerals directly procured the following:
$20.7 million locally (Upper Spencer Gulf)
$276.7 million South Australia
$1.071 billion Australia
$51.7 million internationally (inc. Brazil)
$1.135 billion total.
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 contract 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 and Brazil.
Stakeholder Value Creation Metric: Value spent with local suppliers through supply chainsCase Study: Local content and supplier capability Since 2016, OZ Minerals has been partnering with Global Maintenance Upper Spencer Gulf (GMUSG) to co-design and facilitate local supplier capability services. During this period, GMUSG has supported contractors at Carrapateena to procure $268 million of goods and services from South Australia, of which at least $44.3 million was from and the Upper Spencer Gulf Region. In 2018, this partnership was expanded to support our Prominent Hill mine and development of the Hill to Hill (H2H) power transmission line construction.In 2020, in response to COVID-19 restrictions, GMUSG and OZ Minerals partnered as part of our COVID-19 Stakeholder Support Program to enable local business and community continuity, resilience and adaptation following the disruption of lockdowns and restrictions. The Program has helped to deliver an intensive service for small and medium enterprises across the Upper Spencer Gulf who do not have the documentation to best place them to win bids through online and competitive channels. It has increased the confidence of businesses to promote their capabilities, as well as compete and win work within and beyond their region. This reflects OZ Minerals’ commitment to developing more resilient and adaptive businesses who continue to employ and support local communities. OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 105
106
HEALTH AND
WELLBEING
OUR CONTEXT:
The criticality of health and wellbeing
were elevated for our people and their
family and friends during COVID-19.
Mental as well as physical health was a
high priority as our people adjusted to
changes in work rosters, working from
home and the effects of restrictions on
social interaction, movement and travel.
Activities that enhanced wellbeing
included the requirement for our people
to develop work–life plans, enabling
them to build their work around their
life with flexible working arrangements
encouraged.
Other activities include:
Progressing initiatives to increase
the diversity of people within the
organisation.
Supporting the employment of
local and Aboriginal people.
Approaches that improve gender
pay equity and representation.
Targeted training programs to increase
participation and retention of people
of diverse backgrounds.
OUR CHOICES:
Strategic Aspirations
We work with the best talent and capability
no matter where it resides, driving an
outcome-based organisation.
We deliberately weave personal and
professional growth into our everyday
work, enabling people to do the best
work of their lives.
We are a virtual organisation, bound by
our Purpose and Aspirations, not by
geography or physical infrastructure.
We challenge all assumptions about
how and where work needs to be done
and what’s possible.
Material topics
Performance, capability & culture, p. 6
Inclusion and diversity, p. 109
Attract and retain talent, p. 108, 110
Mental and physical health, p. 107
Our Performance: Stakeholder
Value Creation Metrics
Inclusion maturity above industry benchmark
Engagement (Peakon) Survey Results above
industry benchmark
SUPPORTING
DOCUMENTS:
PERFORMANCE STANDARDS
ozminerals.com/uploads/docs/OZ_Minerals_
Global_Performance_Standards.pdf
VALUE CREATION POLICY
ozminerals.com/uploads/docs/191024_
OZL_Value_Creation_Policies.pdf
OZ MINERALS sUstainaBiLit Y rePort
107
HEALTH AND WELLBEING
PROGRAMS
Stakeholder Value Creation
Metric: Engagement Survey
Results above industry
benchmark
In 2020, OZ Minerals’ engagement
survey score was 8.2, placing us in the
top five per cent of the industry (energy
and utilities).
Our people’s health and wellbeing is
important to us. People with a strong
sense of wellbeing are more engaged at
work and are better participants in their
communities and families. In 2020, we
implemented a number of programs to
promote and support physical, mental,
social and emotional health and wellbeing.
We also actively promoted flexible working
arrangements for our people, allowing
them to work in ways that support their
commitments outside of work. Our
fitness-for-work program includes a
wide range of activities and education in
fatigue management, employee assistance
programs, role-based assessments, fitness,
and drug and alcohol programs. We provide
our people with the necessary education
and information to self-manage their fitness-
for-work.
We value the continued development of an
inclusive culture where people can openly
talk about mental health. Mental health was
a core focus in 2020 within the COVID-19
environment with dedicated programs at
all of our Assets and our corporate office
in Adelaide. OZ Minerals continues to 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 provides access
to a network of accredited counsellors and
psychologists that can support with both
work and personal issues. Our people also
have access to corporate health plans and
income protection.
Case Study: Inclusion and WellbeingOZ Minerals has continued our cultural journey to become a modern mining company. Integral for us to build this culture was a sustainably inclusive environment. Our focus on inclusion and diversity drives systemic, long term change focused on shifting mindsets, systems and symbols rather than only targeting diversity. This gave rise to the development of activities aimed at deeply embedding inclusion and diversity into how we work so the inclusive environment created is unaffected by natural attrition of people, and is an ingrained part of the Company. Key activities include: our inclusive, bottom-up approach in evolving our HWWT behavioural framework that intentionally integrates and calls out inclusive behaviours company-wide, immersive HWWT training focused on building an inclusive culture measuring and tracking inclusion maturity leveraging learnings from COVID-19 to accelerate flexible working so our jobs are more accessible delivering annual mental and physical wellbeing programs bi-monthly anonymous employee engagement surveys, and subsequent quarterly updates to the ELT. During COVID-19 for example, we were able to track our people’s wellbeing and mental health through our existing engagement survey and respond to a number of concerns raised. In 2020, each of the Assets has implemented programs to support mental health and inclusion. This has included ‘Yarning Circles’ at Prominent Hill for Aboriginal employees; the Women’s working group and support networks at Carrapateena; transitioning participants in pre-employment and apprenticeship programs at Carrapateena focused on supporting young women and young Indigenous people; the completion of a mentoring pilot program; and providing education and support regarding mental health. 108
BUSINESS ETHICS AND
ETHICAL CONDUCT TRAINING
CODE OF CONDUCT
ozminerals.com/uploads/docs/201113_
OZ_Minerals_Code_of_Conduct.pdf
TRAINING AND DEVELOPMENT
The Code of Conduct is our highest order
of corporate governance and outlines the
importance of – and our commitment to –
maintaining an open working environment
so our employees and contractors can
report instances of unethical, unlawful
or undesirable conduct without fear of
intimidation or reprisal. We have appointed
STOPline as the disclosure line to report
unacceptable conduct confidentially
and anonymously under the ‘Speak Up’
(Whistleblower) Global Process Standard.
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. Our interactive
online induction program further reinforces
our Code of Conduct, policies and
performance standards.
We are committed to ensuring our
employees have access to career
development while working at OZ Minerals.
It is a requirement for each employee
to have a development plan in place to
support their career aspirations. This year,
employees across the company undertook
secondments to different areas of the
business, participated in mentoring and
coaching programs and attended formal
training and conferences. Secondments
between Brazil and Australia were curtailed
due to COVID-19 restrictions, but technical
engagement continued using virtual
meetings.
Our Leadership Development Programs
focus on developing exceptional leaders
who are inclusive, collaborative and
innovative. Our HWWT principles and
behaviours provide the foundation for
how we conduct our activities. This
year our workforce undertook a total of
36,032 hours of training across Prominent
Hill, Carrapateena, West Musgrave, the
Corporate office and the Carajás Hub, an
average of 12 hours per person. Training
across the company spans inductions, safety,
business ethics, role specific, technical, and
compliance training, designed to lift the
capability of our workforce.
Case Study: Adam Freeling Chemical Engineering Student Adam Freeling had the opportunity to present his Honours research, supported by OZ Minerals, at the University of Adelaide mini-Ingenuity forum. Adam’s project in partnership with Hai Huy Vo Ho unlocks value by reducing electricity usage in copper extraction during periods of higher power prices. Case Study: Exceptional Leaders Program The program’s multi-dimensional learning approach involves a four-month, iterative cycle of learning, application, and reflection so our leaders learn to: deliver value through thinking and acting differently support the building of an inclusive, psychologically safe culture at OZ Minerals lead complex change and establish resilience in periods of uncertainty grow new perspectives and a greater ability to work across difference improve decision making skills and fight ambiguity with agility improve contextual thinking and increase cognitive habits of examining behavioural root causes outside of people and within the OZ Minerals context.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
109
INCLUSION
AND DIVERSITY
Stakeholder Value Creation
Metric: Inclusion maturity
above industry benchmark
In 2020 OZ Minerals recorded an inclusion
maturity score of 8.2.
We are committed to developing an
inclusive culture where people are treated
fairly and respectfully, where they feel
valued and have a sense of belonging. This
includes creating a psychologically safe work
environment that empowers each person
to contribute and express their ideas. We
focus on, and continue to support, diversity
for under-represented groups and provide
equal access and opportunity for all people
regardless of age, gender, race, national
or ethnic origin, cultural background,
experience, social group, marital status,
religion, language, political beliefs, sexual
orientation or physical ability.
Several strategies are in place to increase
the level of inclusion, demographic diversity
and diversity of thought. The participation
of women, Indigenous Peoples and a
multi-generational workforce continues
to be measured. Women make up 23 per
cent of the workforce directly employed
by OZ Minerals, with the Board and ELT
both having more than 30 per cent female
representation. There are approximately 155
Aboriginal people working at Prominent
Hill and Carrapateena (as employees and
contractors) – representing 9 per cent of our
Australian workforce. Equal remuneration
is offered for all our employees, reflective
of the type of job, years of experience and
the period for which employees have held
their position. Annual reviews are conducted
to provide assurance that our employees’
remuneration remains equitable and in line
with market trends.
Case Study: Inclusion and Diversity This year, we saw a strong uplift in our capability to measure inclusion and diversity, through the creation of dashboards and live reporting. We ran a series of workshops embedding our company culture, of which inclusion is a key pillar.We implemented leadership programs focused on equipping our leaders with the skills to be more inclusive and continued to explore how we can support under-represented groups, with pre-employment and apprenticeship programs in place focused on increasing gender and Indigenous representation.A women’s network and support group was established at our Carrapateena mine, focused on improving working conditions and creating a network of support for women at site. We also continued our partnership with Work180, focusing on how we can better recruit and support women. Pleasingly, we also introduced new leave entitlements, effective from 1 January 2021 that support men to take more time off to step into caring roles (as an extension of secondary carers’ leave); extend primary carers’ leave to also apply in the event of a stillbirth; introduce paid superannuation while women are on unpaid maternity leave; and incorporate the option to swap public holidays and purchase additional leave.Case Study: Gabrielle Iwanow, winner of Telstra Business Women’s AwardsIn 2020, Gabrielle Iwanow, General Manager Prominent Hill, was recognised by the Telstra Business awards in the Medium and Large Business Award. Gabrielle is a member of the OZ Minerals ELT, and looks after the mining operations, processing and all associated infrastructure at site. 110
Case Study: Flexible Workforce / Work life PlanWe aspire to: be a virtual organisation, bound by our Purpose and Strategic Aspirations, not by geography or physical infrastructure challenge all assumptions about how and where work needs to be done and what’s possible work with the best talent and capability no matter where it resides, driving an outcome-based organisation.In working towards achieving these aspirations, we introduced work–life plans to break the traditional assumption (and even expectation) that all Fly In Fly Out (FIFO) jobs in mining need to be solely based onsite in a remote location for however long a single swing might be. The introduction of work–life plans demonstrates a rethink of assumptions around when, where, and how work is done. Inextricably, it also encompasses a rethink of who the work can be done by. We’re at the start of the journey with the implementation of work–life plans, with 96 per cent of our people currently having one in place. We are also navigating what a work–life plan looks like for our people who need to be onsite to complete their work. These roles are being re-conceptualised, challenging norms and assumptions around rosters, shift start and finish times, through to the development of remote operating centres. We’ve introduced additional flexibility into our FIFO roles with a 100 per cent remote work model (working from home or off-site), 100 per cent site-based model, or a hybrid model (remote and onsite combination). Including the option of working flexibly into traditionally site-based roles has made these jobs more accessible to a wider and more diverse talent pool, increasing the quality of applicants.The work–life plans are a symbol of trust and empowerment for our people. The plans must be personalised and developed in consultation with the person’s manager, and the business does not dictate that one-size-fits-all so they can be easily tailored to suit individual needs. The plans are also reviewed regularly and on an as-needs basis to make sure they still suit each person’s circumstance, in recognition that our lives change and each person’s situation is different. In 2021, we will continue supporting flexible and remote working through the development of remote operating centres and transforming our offices into collaborative spaces that foster connection, inclusion, and innovation.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 111
112
SUSTAINABILITY REPORTING DATA
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.
ENVIRONMENT
energY (1 JULY, 2019 – 30 JUne, 2020)
2020
0
0
5.29
1.32
39
2019
0
1
7.52
1.54
38
2018
0
0
7.24
0.93
63
2017
0
0
6.39
0.36
65
2016
0
0
6.80
1.07
71
Energy consumption (GJ)
Energy consumed
Energy produced
Energy consumed (net)
Prominent Hill
Carrapateena
Antas
Pedra Branca
West Musgrave*
Group office
Total
eMissions (1 JULY, 2019 – 30 JUne, 2020)
Emissions
Greehouse gas emissions Scope 1 (t CO2-e)(a)
Greehouse gas emissions Scope 2 (t CO2-e)(b)
Total of Scope 1 and Scope 2 (t CO2-e)
Sulphur hexaflouride SF6 (t CO2-e)
Oxides of nitrogen N2O (t)
Sulphur dioxide (t)
Total volatile organic compounds (VOC) (t)
Particulate matter <10um (t)
1,891,457
795,042
188,129
22,543
12,493
690
2,910,354
2019-20
85,555
192,334
277,889
16
699
0.47
50
2018-19
77,271
176,627
253,898
16
783
0.5
52
519
37,115
57
0
0
0
37,691
2017-18
85,258
167,980
253,238
11
632
0.5
35
1,890,938
757,927
188,072
22,543
12,493
690
2,872,663
2015-16
142,669
190,825
333,494
11
994
0.9
52
2016-17
105,648
177,306
282,954
11
342
1.3
108
2,771
2,316
2,180
3,310
4,488
* West Musgrave: due to COVID-19 restrictions the West Musgrave Project site was in care and maintenance for the majority of 2020. The West Musgrave Project Transitioned to OZ Minerals
Operational Control on 1 January 2020.
(a) Scope 1 refers to emissions produced directly by operation, primarily resulting from combustion of various fuels and includes CO2-equivalent values for GHGs 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.
Note: The reporting period is July 2019 to June 2020 for all Assets. 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 emissions factors are based on the NGER Act (2007) and the National Pollutant Inventory.
Note: N20, Sulphur dioxide, VOC, PM10 are not inclusive of Brazil.
Water WithdraWaL (ML)^
Water withdrawal
Prominent Hill
Carrapateena
West Musgrave
Total
Surface water
(inclusive of
rainwater)
Groundwater
(mine
dewatering)
Groundwater
(wellfield)
Municipal
water supply
Total recycled
Total recycled
%
Total withdrawal
from areas of
extreme water
stress*
%
0
0
0
10
466
624
0
1,090
4,991
1,463
0
6,454
0.0
9.0
0.3
9.3
1,199
1,236
0
2,435
22
59
0
32
0
0
0
0
* Water stress as defined by the World Resources Institute Aqueduct Water Risk Atlas
^
Exclusive of Brazil data
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
113
Water disCharge
Water discharge (ML)
Subsurface
Surface
Sewers
Land (dust
suppression)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
34
225
61
50
0
370
Land
0
384
0
0
0
384
Treatment
facilities
Groundwater
0
2
1
0
0
3
0
0
0
0
0
0
Prominent Hill
Carrapateena
Antas
Pedra Branca
West Musgrave*
Total
Waste
Mineral waste
Prominent Hill
Carrapateena
Antas
Pedra Branca
West Musgrave*
Total
non-MineraL Waste
Non-mineral waste
Prominent Hill
Carrapateena
Antas
Pedra Branca
West Musgrave*
Total
rehaBiLitation and CLosUre
Land management (ha)
Prominent Hill
Carrapateena
Antas
Pedra Branca
West Musgrave*
Total
Overburden &
waste rock (t)
Material moved
(t)
Total ore mined
(t)
Liquid fossil fuels
(kL)
Lubricants
(kL)
Explosives
(t)
3,483,354
7,373,251
3,889,897
15,471,490
1,574,528
4,265,528
2,691,000
12,251
1,779,000
2,519,090
147,199
205,125
0
0
740,608
57,926
0
918
680
0
553.9
363.6
48.6
44.3
0
1,947.5
2,270.0
1,096.0
238.9
0
6,983,205
14,362,411
7,379,724
15,485,338
1,010.4
5,552.4
Incineration
(t)
On-site storage
(t)
Hazardous
transported (t)
Solid recycled
(t)
Liquid recycled
(l)
1,763.3
38,460.0
210.0
156.3
29.6
0
109,700.0
0
0
0
Landfill
(t)
537.6
1,198.7
630.3
123.6
9.0
297.6
0
0
0
0
2,159.2
148,160.0
2,499.2
297.6
0
0
0
0
0
0
71.4
217.8
274.4
111.4
0
675.0
Total
landholding
11,401
44,144
7,291
509
245,406
308,751
Mine
footprint
2,039.0
1,860.4
132.3
30.4
0.0
4,062.1
Land
disturbed^
Land
rehabilitated^
Land disturbed
in high
biodiversity
value areas
6.2
766.2
0.0
29.8
10.0
812.2
0.6
0.0
0.0
0.0
0.0
0.6
0
0
0
0
0
0
0
0
0
^ During 2020 Calendar Year
* West Musgrave: due to COVID-19 restrictions the West Musgrave Project site was in care and maintenance for the majority of 2020.
enVironMentaL CoMPLianCe (totaL)
Total volume of significant spills (L)
Monetary value of significant fines ($A)
Number of significant environmental incidents
114
SOCIAL
soCiaL CoMPLianCe (totaL)
Number of Cultural Heritage Breaches
Number of unauthorised land disturbances
soCioeConoMiC ContriBUtion
$millions
Revenues
Operations
Employees
Payments to providers of capital
Payments to government
0
0
Economic
value retained
Revenue, other
income and
financing income
Operating
expenses
Employee
benefit
expenses
Dividend
payments to
shareholders
Providers
of funds
Income taxes
expense
Royalties
Region
South Australia
Brazil
1,263.4
79.3
Total OZ Minerals
1,342.7
oVerVieW reVenUes
Categories
Revenue
Other income
Financing income
Total
oVerVieW CoMMUnit Y inVestMent
Categories (Including COVID-19)
Community appeal
Education
Health
Industry
Political donations
Total
oVerVieW oPerating exPenses
Categories
Changes in inventories
Raw materials
Exploration and evaluation
Freight expenses
Net foreign exchange
Other expenses
Total
ProCUreMent(a)
Region
South Australia – Local
South Australia – Total
Australia – Total
Brazil – Local
Brazil – Total
International – Total
Total
(a) Direct OZ Minerals procurement.
(789.4)
(56.8)
(846.2)
(117.8)
(3.2)
(121.0)
(74.6)
0.0
(74.6)
(12.0)
0.0
(12.0)
(79.5)
(3.7)
(83.2)
(62.1)
(5.6)
(67.7)
128.0
10.0
138.0
$A millions
1,342.0
0.3
0.4
1,342.7
$A
309,811
546,769
1,360,843
126,800
–
2,344,223
$A millions
(18.9)
–
(50.6)
(50.5)
(20.7)
(705.5)
(846.2)
$A millions
20.7
276.7
1,071.4
3.6
8.4
51.7
1,131.5
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
115
tax
Australian tax-related contribution summary
Corporate income tax(a)
Government royalties
State payroll tax and other
Total
Employee PAYG
(a) Corporate Income Tax represents cash outflows in 2020 in relation to the following:
/ income tax receipt for December 2019 totalling net $0.8 million ($7.9 million instalment offset by $8.7 million refund)
/ monthly PAYG instalments paid relating to the 2020 income year totalling $43.1 million.
Reconciliation of accounting profit to income tax expense
Accounting profit before income tax expense
Tax at Australian tax rate of 30%
Variation in overseas tax
Non-deductible expenditure
Revision for prior periods
Recognition of previously unrecognised tax losses
R&D tax benefit
Other
Derecognition of overseas losses
Income tax expense
Global and Australian effective tax rate
Accounting (loss)/profit before income tax expense
Income tax expense
Effective tax rate
Reconciliation to income tax payable
Profit before income tax expense
Permanent differences
Temporary differences
Difference in accounting and tax depreciation
Provisions and accruals
Derivatives
Exploration deductions
Leases
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
Utilisation of R&D offsets
PAYG instalments for December 2020
Net income tax payable post PAYG instalments
$A millions
42.3
57.8
6.0
106.1
34.1
$A millions
295.8
(88.7)
2.9
(6.8)
(0.3)
14.3
0.4
(4.0)
(1.0)
(83.2)
Global (AUD $millions)
Australia ($A millions)
295.8
(83.2)
28.1%
286.7
(79.6)
27.8%
31 December 2020 ($A millions)
286.7
18.4
(52.2)
29.4
(12.5)
(19.4)
1.6
(6.8)
245.2
(29.9)
215.3
64.6
(1.9)
(43.1)
19.6
*
Figures exclude all foreign jurisdictions due to resulting tax losses in those jurisdictions. Amounts reflect current tax payable in Australia only for the December 2020 income year.
internationaL reLated PartY deaLings
In addition to the above disclosures, the TTC also requires disclosure of international related party dealings. For the year ended 31 December
2020, OZ Minerals had immaterial dealings with international related parties in Brazil and Peru, limited to the following:
the provision of technical services (Brazil and Peru)
intercompany loans to fund exploration and feasibility studies (Brazil and Peru).
116
HEALTH AND WELLBEING
diVersitY
Profile 2020
Full time
Part time
Fixed term
Casual
Employees
Contractors
Workforce Aboriginal
M
61
F
30
M
1
164
36
198
38
Australia –
Corporate
Australia –
Prominent Hill
Australia –
Carrapateena
Australia –
West Musgrave
13
0
Brazil – Antas
119
Brazil – Pedra
Branca
85
21
20
Total
640
145
0
0
0
0
0
1
F
2
0
0
2
0
0
4
M
8
11
11
5
0
0
F
4
5
3
0
0
0
35
12
M
1
0
4
0
0
0
5
F
1
1
0
0
0
0
2
Total
108
M
5
F
7
Total
12
Total
120
Total
0
State Based Interstate
Local
Total
N/A
217
1,023
165
1,188
1,405
109
163
1,199
254
352
64
416
670
46
20
2
1
3
140
105
257
333
17
58
274
391
23
414
496
0
0
0
844
1,972
312
2,284
3,128
155
72
1
111
44
155
New employees 2020
Age group <36
Age group 36–55
Age group >55
Total
106
485
15
414
496
Total
14
206
185
8
0
0
2,715
413
Total
100
98
Australia
Brazil
Turnover
2020
Australia
Brazil
M
37
42
F
17
17
M
33
31
Age group <36
%
Age group 36–55
%
M
4.6
0.1
F
4.7
0.2
M
7.0
0.2
F
21.1
0
F
10
4
M
5.6
0
M
2
4
F
1
0
Age group >55
%
Total
%
Voluntary turnover
%
F
22.8
0.0
7.3
14.3
4.3
9.8
Hours
36,032
12
Training Hours (2020)
Total
Individual average training hour provided by OZ Minerals (total workforce)
CoMBined eMPLoYee diVersitY at oZ MineraLs
100%
100%
Age group <30
Age group 30–50
Age group >50
Female
Aboriginal
80%
60%
40%
20%
0
81%
78%
70%
62%
61%
33%
39%
33%
19%
11%
5%
17% 16%
16% 18%
13%
25%
22%
14%
7%
1%
OZ Minerals Board
Business leadership and
Functional leadership
Department Managers
Superintendents/Senior
Specialists
Tertiary/Supervisor
Individual contributors
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
117
aUstraLia
Employee diversity
at OZ Minerals
Under 30 years old
30-50 years old
Over 50 years old
Female
Aboriginal
BraZiL
Business leadership and
Functional leadership
Department Managers
Superintendents/
Senior Specialists
Tertiary/Supervisor
Individual contributors
0
9
6
6
0
0
38
7
6
0
6
91
18
19
0
21
90
26
28
2
71
174
42
63
22
Employee diversity
at OZ Minerals
Business leadership and
Functional leadership
Department Managers
Superintendents/
Senior Specialists
Tertiary/Supervisor
Individual contributors
Under 30 years old
30-50 years old
Over 50 years old
Female
totaL
Employee diversity
at OZ Minerals
Under 30 years old
30-50 years old
Over 50 years old
Female
Aboriginal
Residing in State
0
2
1
0
0
5
3
0
0
6
3
1
1
25
1
2
6
19
1
5
OZ Minerals
Board
Business
leadership
and Functional
leadership
Department
Managers
Superintendents/
Senior Specialists
Tertiary/
Supervisor
Individual
contributors
0
0
6
2
0
2
0
11
7
6
0
15
0
43
10
6
0
45
6
97
21
20
0
115
22
115
27
30
2
137
77
193
43
68
22
287
118
INDEPENDENT
LIMITED
ASSURANCE
REPORT TO THE
DIRECTORS OF
OZ MINERALS
LTD
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 the Global
Reporting Initiative (GRI) Standards, the
Recommendations of the Taskforce on
Climate-related Financial Disclosures (TCFD)
and Oz Minerals Limited specific definitions
outlined in the 2020 Sustainability Report on
pages 70 to 117 of the Oz Minerals Limited
Annual and Sustainability Report for the year
ended 31 December 2020.
Information Subject to Assurance
The Selected Sustainability Information, as presented in the 2020 Sustainability Report on
pages 70 to 117 of the OZ Minerals Ltd (the “Company”) Annual and Sustainability Report
2020 for the year ended 31 December 2020 (the “Sustainability Report”) and available on
the Company website, comprised the following:
Selected Sustainability Information
Fatalities
Total Recordable Injury Frequency Rate (TRIFR)
Lost Time Injury Frequency Rate (LTIFR)
Greenhouse gas emissions Scope 1 (t C02-e) July 2019 – June 2020
Greenhouse gas emissions Scope 2 (t C02-e) July 2019 – June 2020
Energy consumed (GJ) July 2019 – June 2020
Energy produced (GJ) July 2019 – June 2020
Total water withdrawal – sum of Groundwater (mine dewatering)
and Groundwater (wellfield) (ML)
TCFD disclosures, strategy, risk management and the metrics and targets
sections of the Sustainability Report presented on pages 87-89
Value assured
0
5.29
1.32
85,555
192,334
2,910,354
37,691
7,544
Not applicable
Criteria Used as the Basis of Reporting
The criteria used in relation to the Selected Sustainability Information are the GRI Standards
published by the GRI, Recommendations of the TCFD and Company specific definitions
outlined in the Sustainability Report.
Basis for Conclusion
We conducted our work in accordance with Australian Standard on Assurance Engagements
ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial
Information and ASAE 3410 Assurance Engagements on Greenhouse Gas Statements (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;
remote discussions with Corporate Head Office (Adelaide), Prominent Hill, Carrapateena
and Brazil Assets;
walkthroughs of the Selected Sustainability Information to source documentation;
agreeing the Selected Sustainability Information included in the Sustainability Report
to relevant underlying sources on a sample basis;
an assessment that the Selected Sustainability Information indicators reported were
in accordance with the criteria used as the basis of reporting; and
reviewing the OZ Minerals Annual and Sustainability Report 2020 in its entirety to
ensure it is consistent with our overall knowledge of the Company.
© 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT sUstainaBiLit Y rePort
119
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 Limited.
Use of this Assurance Report
This report has been prepared for the Directors of OZ Minerals Limited 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 Limited, 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 Limited 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 2020, 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
Julia Bilyanska
Director
18 February 2021
© 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
120120
MINERAL
RESOURCES AND
ORE RESERVES
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS MineraL resoUrCes and ore reserVes
121
MINERAL
RESOURCES
AND ORE
RESERVES
OZ Minerals updates its Mineral Resources and
Ore Reserves estimates at 30 June each year, or as
necessitated by material changes to projects.
In 2020, estimated Ore Reserves increased from approximately 175 Mt to 550 Mt primarily
from the inclusion of Ore Reserves from the West Musgrave Province and the change of
the assumed mining method at Carrapateena from sub-level caving to block caving. Total
estimated Mineral Resources increased in 2020 from approximately 1,600 Mt to 1,800 Mt,
mostly due to a changed cut-off grade for the West Musgrave Project.
The information in this section is drawn from the following releases:
Deposit
Prominent Hill Mineral Resource and Ore Reserve Statement and Explanatory Notes
as at 30 June 2020
2020 Carrapateena Mineral Resources and Ore Reserves Statement and Explanatory Notes
as at 30 June 2020
Fremantle Doctor Mineral Resource Statement and Explanatory Notes
as at 12 November 2018
Maiden Succoth Resource Estimate (asx.com.au/asxpdf/20151207/pdf/433lsh4dgb91rs.pdf)
Maiden Jericho Resource and Cloncurry exploration update
(asx.com.au/asxpdf/20200716/pdf/44kkzdc6ljty34.pdf)
West Musgrave Project Nebo-Babel Deposits Mineral Resource Statement and Explanatory Notes
as at 9 December 2020
Antas North Mineral Resource and Ore Reserve Statement and Explanatory Notes
as at 30 June 2020
Pedra Branca 2019 Mineral Resource Statement and Explanatory Notes as at 25 March 2019
and 2019 Ore Reserve Statement and Explanatory Notes as at 15 November 2019
CentroGold Mineral Resource Estimate and Ore Reserve Statement as at 6 May 2019
and 24 June 2019
CentroGold Resources Increase 45% and Exceeds 1.8 Million Ounces
Release date
16-Nov-20
16-Nov-20
12-Nov-18
7-Dec-15
16-Jul-20
9-Dec-20
16-Nov-20
28-Nov-19
11-Jul-19
13-Nov-17
Note: All Mineral Resources and Ore Reserves are estimates. The OZ Minerals Mineral Resources and Ore Reserves statements and
their accompanying explanatory notes can be viewed in full at: ozminerals.com/operations/resources-reserves/
SUMMARY OF SIGNIFICANT CHANGES SINCE 2019
Prominent Hill
Prominent Hill estimated Mineral Resource tonnes increased by 8 per cent mostly due to a
change in cut-off grade and the inclusion of marginal grade stockpiles, offset by mining and
stockpile depletion.
Prominent Hill estimated Underground Ore Reserve tonnes decreased by 3 per cent mostly
due to mining depletion.
Carrapateena
In 2020 a PFS was completed on an expansion of the Carrapateena Asset and the study
identified that it was economically and technically viable to convert from a sub-level caving
method to a block cave mining methodology, resulting in an increase of estimated Ore
Reserves of 91 Mt to 220 Mt.
West Musgrave Project
In December 2020 an update to the PFS resulted in an improvement to key project
metrics relative to the PFS release on 12 February 2020, with an increase of Ore Reserve of
15 per cent, which remained at a Probable Ore Reserve classification exclusively. A reduction
in operating costs subsequent to an increase in processing throughput was the ultimate
driver for this change.
Carajás Province
An Ore Reserve estimate for Antas North was declared in 2020.
Mining at Antas North will cease in early 2021, while the Carajás Hub will continue
to process ore from Pedra Branca.
Others
There have been no changes to the Mineral Resource estimates of Fremantle Doctor,
Succoth, Pedra Branca, Cipoeiro or Chega Tudo throughout 2020.
122
2020
Mineral Resources
Measured
Indicated
Inferred
Tonnes
Mt
Cu
%
Au
g/t
Ag Tonnes
g/t
Mt
Cu
%
Au
g/t
Ag Tonnes
g/t
Mt
Cu
%
Au
g/t
Ag Tonnes
Cu
Au
g/t
Mt
% g/t
Total
Ag
g/t
Cu
kt
Au
Ag
koz Moz
46
1.3
0.6
3.6
0.4
0.3
3
1
23
0.8
1.1
–
–
–
2
–
59
1.0
0.7
–
–
–
2
–
130
1.1
0.8
3 1,400
3,100
10
3.6
0.4
0.3
1
15
38
0.2
130
0.96
0.42
3.6
500
0.62
0.26
2.9
330
0.32
0.16
2.0
950 0.57 0.25
2.7 5,400
7,600
–
–
–
0.2
2.3
180
–
–
–
1.1
1.6
1.0
–
–
–
0.5
0.5
0.5
–
–
–
–
–
3
15
0.1
0.6
0.5
–
–
–
–
–
–
–
–
15
0.1
0.6
0.5
–
–
–
0.8
11
530
–
21
8.2
29
–
–
–
0.9
1.6
0.7
–
–
–
–
–
–
–
0.3
0.4
0.3
–
1.9
1.6
1.8
Cu
%
–
–
–
–
–
3
–
–
–
–
3
–
1.6
–
–
2
–
–
–
–
104
0.7
0.5
156
0.60
9.1
0.9
4.8
660
–
7.3
3.1
10
–
0.3
0.1
0.4
0.3
–
1.8
1.5
1.7
Cu
%
1.4
0.4
1.5
0.5
–
–
–
–
Ni
%
104
0.7
0.5
156 0.60
9.1
1.9
19
1,400
1.4
0.7
1.6
0.6
–
0.3
0.2
0.4
0.3
3
–
1.6
–
–
800
943
130
12
300
2,000
–
88
15
270
2 8,900
14,000
100
15
0.1
0.6
0.5
18
310
0.2
28
11.3
–
–
55 0.03
1.9
1.6
1.5
–
–
–
–
1,700
577
–
–
0.1
18
2,600
0.2
Au Tonnes
g/t
Mt
Ni
%
Au Tonnes
g/t
Mt
79
Tonnes
Mt
–
–
–
Ni
%
–
–
–
Cu
%
–
–
–
–
–
–
260
0.30
0.34
0.06
0.32
0.37
0.06
340 0.31 0.35
0.06 1,000
1,200
52
0.36
0.32
0.04
2.3
0.32
0.33
0.04
54 0.36 0.32
0.04
190
170
310
0.31
0.34
0.06
82
0.32
0.37
0.06
390 0.31 0.34
0.06 1,200
1,300
Au Tonnes
g/t
Mt
Ni
%
Cu
%
Au
g/t
Ni
kt
Cu
Au
kt Moz
82
10
–
0.5
–
–
0.7
0.1
0.7
Ore Reserves
Proved
Probable
Tonnes
Mt
Cu
%
Au
g/t
Ag
g/t
Tonnes
Cu
Au Ag Tonnes
Cu
Au
Mt
% g/t
g/t
Mt
% g/t
Total
Ag
g/t
3
2
Cu
kt
Au
Ag
koz Moz
440
840
4
15
38
0.2
1
–
3
–
38
1.2
0.7
3.6
0.4
0.3
0.45
4.4
220
1.1 0.45
4.4 2,300
3,100
31
0.4
0.5
0.5
–
–
4
0.6
5
260
0.9
2.1
1.1
0.4
0.5
0.5
–
–
5.9
104
8.6
89
-
–
4 2,900
4,100
35
29
1.3
0.6
3.6
0.4
0.3
–
0.2
1.1
33
–
1.0
1.9
1.2
–
0.4
0.6
0.6
3
2
–
–
–
3
9
–
220
0.4
3.9
230
0.8
–
1.1
0.9
2.1
1.1
13
0.1
0.7
0.5
2.2
0.2
0.3
0.6
15
0.1
0.6
0.5
–
13
–
–
–
0.1
0.7
0.5
20
22
–
1.7
–
20
–
0.02
1.5 0.06
35 0.05
1.7
1.2
Tonnes
Mt
–
–
–
Ni
%
–
–
–
Cu
Au
Tonnes
% g/t
Mt
Ni
%
Cu Au Tonnes
% g/t
Mt
Ni
%
Cu
%
–
–
–
–
–
–
220
0.31
0.35 0.06
220 0.31 0.35
0.06
33
0.41
0.36 0.04
33 0.41 0.36
0.04
253
0.32
0.35 0.06
253 0.32 0.35
0.06
–
0.2
Au
g/t
18
–
18
Ni
kt
680
140
820
310
0.2
1,100
–
1,400
0.2
Cu
Au
kt Moz
770
0.4
120
0.05
890
0.5
Copper
Prominent Hill
underground
Prominent Hill
surface stocks
Carrapateena
Fremantle Doctor
Succoth
Jericho
Antas North
Pedra Branca
Total
Gold
Prominent Hill
surface stocks
CentroGold
Chega Tudo
Total
Nickel
Babel
Nebo
Total
Copper
Prominent Hill
underground
Prominent Hill
surface stocks
Carrapateena
Antas North
Pedra Branca
Total
Gold
Prominent Hill
surface stocks
CentroGold
Total
Nickel
Babel
Nebo
Total
Table subject to rounding errors. OZ Minerals has 80 per cent ownership of the Jericho JV, however is reported on a 100 per cent basis
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT MineraL resoUrCes and ore reserVes
123
2019
Mineral Resources
Measured
Indicated
Inferred
Tonnes
Mt
Cu
%
Au
g/t
Ag Tonnes
g/t
Mt
Cu
%
Au
g/t
Ag Tonnes
g/t
Mt
Cu
%
Au
g/t
Ag Tonnes
Cu
Au
g/t
Mt
% g/t
Total
Ag
g/t
Cu
kt
Au
Ag
koz Moz
Copper
Prominent Hill
underground
Prominent Hill
surface stocks
Carrapateena
Fremantle Doctor
Succoth
Antas North
Pedra Branca
Total
Gold
Prominent Hill
surface stocks
CentroGold
Chega Tudo
Total
Nickel
Babel
Nebo
Total
52
1.3
0.6
7.5
0.6
0.4
137
0.84
0.38
–
–
0.28
2.3
200
–
–
0.9
1.6
1.0
–
–
0.2
0.48
0.43
15
0.10
0.80
–
–
–
–
–
–
15
0.11
0.78
3
2
3
–
–
–
–
2.9
2
–
–
2
21
0.9
0.9
–
–
–
3
–
48
1.0
0.7
–
–
–
2
–
120
1.1
0.7
3 1,300
2,700
11
7.5
0.6
0.4
2
48
92
1
484
0.66
0.28
3.3
345
0.26
0.13
1.7
965 0.54 0.24
2.7 5,200
7,400
83
3
–
104
160
2.6
19
0.7
0.6
1.2
0.5
–
0.4
1.6 0.44
3
–
–
–
800
2,400
–
30
–
–
29
–
9
–
–
–
1.5
1,400
0.6 0.29
2.3 8,600
13,000
100
–
–
–
–
15
0.1
0.8
28
11.3
54
–
–
–
1.9
1.6
1.5
2
–
–
17
380
–
–
1,700
577
0.8
17
2,600
1
–
–
1
–
–
1.7
11
520
–
21
8.2
29
–
–
1.1
1.6
0.7
–
–
–
–
–
–
0.3
0.44
0.31
–
1.9
1.6
1.8
Cu
%
–
–
–
–
3.2
–
–
–
–
104
160
0.64
4.8
660
–
7.3
3.1
10
Au Tonnes
g/t
Mt
96
0.7
0.6
1.4
1.5
0.5
–
–
–
–
Ni
%
0.5
–
0.5
0.44
0.24
–
1.8
1.5
1.7
Cu
%
Au Tonnes
g/t
Mt
Ni
%
Tonnes
Mt
–
–
–
Ni
%
–
–
–
Cu
%
–
–
–
–
–
–
108
0.33
0.38
0.06
0.34
0.38
0.07
204 0.34 0.38
0.06
33
0.45
0.40
0.05
1.9
0.36
0.39
0.04
34 0.44 0.40
0.04
141
0.36
0.38
0.06
98
0.34
0.38
0.06
238 0.35 0.38
0.06
Au Tonnes
g/t
Mt
Ni
%
Cu
%
Au
g/t
Ni
kt
680
150
840
Cu
Au
kt Moz
770
140
910
0.4
0.05
0.5
Ore Reserves
Proved
Probable
Tonnes
Mt
Cu
%
Au
g/t
Ag
g/t
Tonnes
Cu
Au Ag Tonnes
Cu
Au
Mt
% g/t
g/t
Mt
% g/t
Total
Ag
g/t
Cu
kt
Au
Ag
koz Moz
Copper
Prominent Hill
underground
Prominent Hill
surface stocks
Carrapateena
Pedra Branca
Total
Gold
Prominent Hill
surface stocks
CentroGold
Total
Table subject to rounding errors.
30
1.3
0.6
7.5
0.6
0.4
–
1.1
38
–
1.9
1.2
–
0.6
0.5
15
0.1
0.8
–
15
–
–
0.1
0.8
3
2
–
–
3
2
–
2
8.9
1.0
0.9
–
–
–
3
–
39
1.3 0.60
7.5
0.6 0.40
3
2
490
770
48
92
91
3.9
100
1.6
2.1
1.6
0.67
7.6
0.5
–
91
5.0
1.6 0.67
7.6 1,500
1,900
2.1
0.5
–
104
89
0.7
6.9
140
1.5 0.60
6 2,100
2,900
–
20
20
–
–
–
–
1.7
1.7
–
–
–
15 0.10
0.8
20
–
35 0.05
1.7
1.3
2
–
1
17
–
17
380
1,100
1,400
4
1
22
–
27
1
–
1
124
MATERIAL CHANGES IN THE MINERAL RESOURCES AND ORE RESERVES ESTIMATES
OZ Minerals is not aware of anything that materially affects the information contained in any of the above listed estimates since they
were last reported, except for depletion due to mining. Depletion since the Ore Reserves were last reported to 31 December 2020 is
outlined below.
Asset
Prominent Hill
Carrapateena
Antas North
Tonnes (Mt)
Cu (%)
Au (g/t)
Ag (g/t)
4.6
1.8
0.3
0.8
1.1
1.0
0.9
0.7
0.3
2
7
–
COMPETENT PERSONS’ STATEMENTS
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 relevant Competent Person whose name appears in the same row.
Each 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, Australian Institute of Geoscientists or other Recognised Professional Organisation, and
consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.
Competent Persons may be shareholders in OZ Minerals Limited. OZ Minerals’ employees are entitled to participate in the OZ Minerals
Performance Rights Plan and may participate in an incentive scheme in which replacement of mining depletion is one of the performance
indicators.
Professional
Organisation
Membership
Number
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
222853
304944
316591
317073
109714
225331
SME
4172669RM
AusIMM
225331
SME
AIG
4172669RM
1719
319595
1719
1719
226746
226746
317702
Asset
Prominent Hill
Prominent Hill
Carrapateena
Carrapateena
Estimate
Name
Employer
Mineral Resource
Bruce Whittaker
OZ Minerals full time employee
Ore Reserve
Tom Murdock
OZ Minerals full time employee
Mineral Resource
Shaun Light
OZ Minerals full time employee
Ore Reserve
Rodney Hocking
OZ Minerals full time employee
Fremantle Doctor
Mineral Resource
Heather Pearce
Former OZ Minerals full time employee
Mineral Resource
Ore Reserve
Mineral Resource
Ore Reserve
Colin Lollo
Ruy Lacourt
Colin Lollo
Ruy Lacourt
OZ Minerals full time employee
Re Metallica Associates Consultant
OZ Minerals full time employee
Re Metallica Associates Consultant
Mineral Resource
Aaron Green
CSA Global Pty Ltd full time employee
Antas North
Antas North
Pedra Branca
Pedra Branca
CentroGold
CentroGold
Chega Tudo
Succoth
Jericho
Nebo-Babel
Nebo-Babel
Ore Reserve
Adriano Carneiro
AMBA Geology and Mining Consulting full time employee
AusIMM
Mineral Resource
Mineral Resource
Aaron Green
Aaron Green
CSA Global Pty Ltd full time employee
CSA Global Pty Ltd full time employee
Mineral Resource
Phillippa Ormond
OZ Minerals full time employee
Mineral Resource
Phillippa Ormond
OZ Minerals full time employee
Ore Reserve
Yohanes Sitorus
OZ Minerals full time employee
AIG
AIG
AusIMM
AusIMM
AusIMM
GOVERNANCE ARRANGEMENTS
OZ Minerals has established Mineral Resources and Ore Reserves estimation processes, which set 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 Resources and Ore Reserves estimates compiled during 2020 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 accordance 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 Resources and Ore Reserves estimates being subject to independent review by suitably qualified practitioners, inclusive
of the Competent Persons
review by the Mineral Resources and Ore Reserves Team
Board approval of the Mineral Resources and Ore Reserves estimates prior to release to the market.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT 125
126126
FINANCIAL
REPORT
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORTOZ MINERALS finanCiaL rePort
127
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 2020 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
18 February 2021
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.
128
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Revenue
Other income
Mining
Processing
Freight
Site administration
Royalties
Inventory movement
Corporate administration
Exploration and corporate development
Other
Foreign exchange (loss)/gain
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 gain/(loss)
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 Income Statements
Cash flow hedges change in fair value
Cash flow hedges reclassified to profit and loss
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
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes.
Notes
1
3
2
2020
$m
1,342.0
0.3
(421.6)
(215.5)
(50.5)
(113.5)
(67.7)
(18.9)
(56.0)
(50.6)
(4.4)
(20.7)
322.9
0.4
(27.5)
295.8
(83.2)
212.6
3.9
(40.8)
64.9
(36.1)
(8.1)
204.5
cents
65.2
2019
$m
1,107.0
0.2
(251.5)
(146.8)
(80.5)
(48.8)
(57.6)
(140.8)
(50.2)
(93.9)
(4.5)
0.9
233.5
5.1
(10.0)
228.6
(64.7)
163.9
(7.6)
(52.0)
23.9
8.9
(26.8)
137.1
cents
50.7
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
129
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
Notes
Balance as at 1 January 2020
Total comprehensive income for the year
Profit for the year
Other comprehensive loss
Total comprehensive income for the year
Transactions with owners, recorded directly in equity
Shares issued – acquisition of Cassini Resources Limited
Dividends
Share-based payment transactions, net of income tax
8
4
13
Total transactions with owners
Balance as at 31 December 2020
For the year ended 31 December 2019
Notes
Balance as at 1 January 2019
Effect of transition to AASB 16 Leases
Adjusted opening balance
Total comprehensive income for the year
Profit for the year
Other comprehensive loss
Total comprehensive income for the year
Transactions with owners, recorded directly in equity
Dividends
Share-based payment transactions, net of income tax
4
13
Issue of treasury shares
Total transactions with owners
Balance as at 31 December 2019
Issued
capital
$m
2,280.4
–
2,280.4
–
–
–
–
–
–
–
2,280.4
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
Issued
capital
Retained
earnings
Cash flow
hedge
reserve
Foreign
currency
translation
reserve
Total
equity
$m
2,280.4
–
–
–
89.6
1.4
–
91.0
2,371.4
$m
721.2
212.6
3.9
216.5
–
(74.6)
10.6
(64.0)
873.7
$m
(49.5)
–
24.1
24.1
–
–
–
–
$m
27.8
$m
2,979.9
–
(36.1)
(36.1)
–
–
–
–
212.6
(8.1)
204.5
89.6
(73.2)
10.6
27.0
(25.4)
(8.3)
3,211.4
Retained
earnings
Cash flow
hedge
reserve
Treasury
shares
Foreign
currency
translation
reserve
$m
638.5
(6.1)
632.4
163.9
(7.6)
156.3
(74.3)
8.0
(1.2)
(67.5)
721.2
$m
(21.4)
–
(21.4)
–
(28.1)
(28.1)
–
–
–
–
(49.5)
$m
(1.2)
–
(1.2)
–
–
–
–
–
1.2
1.2
–
Total
equity
$m
2,915.2
(6.1)
2,909.1
163.9
(26.8)
137.1
(74.3)
8.0
–
(66.3)
$m
18.9
–
18.9
–
8.9
8.9
–
–
–
–
27.8
2,979.9
130
CONSOLIDATED BALANCE SHEET
At 31 December
Current assets
Cash and cash equivalents
Trade receivables
Inventories
Prepayments
Other receivables
Total current assets
Non-current assets
Deferred tax assets
Inventories
Exploration assets
Property, plant and equipment
Right-of-use assets
Other assets
Total non-current assets
Total assets
Current liabilities
Trade payables and accruals
Other payables
Current tax provision
Employee benefits
Provisions
Derivative financial instruments
Loans and borrowings
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Employee benefits
Provisions
Derivative financial instruments
Loans and borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
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.
Notes
5
3
5
8
7
9
10
14
14
3
10
14
14
2020
$m
131.7
160.3
252.1
11.7
13.5
569.3
7.0
266.6
215.8
2,913.5
750.1
33.7
4,186.7
4,756.0
2019
$m
134.0
83.1
238.3
7.7
23.4
486.5
7.1
299.3
112.1
2,696.3
176.1
36.6
3,327.5
3,814.0
190.1
168.6
7.3
19.7
21.7
0.3
36.3
171.5
446.9
288.5
3.2
121.7
–
684.3
1,097.7
1,544.6
3,211.4
8.2
5.6
14.5
1.0
60.4
37.8
296.1
270.1
1.7
97.4
22.7
146.1
538.0
834.1
2,979.9
12
2,371.4
2,280.4
(25.4)
873.7
(8.3)
(49.5)
721.2
27.8
3,211.4
2,979.9
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December
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
Payments for property, plant and equipment
Net proceeds from sale of pre commissioning concentrates
Payments for exploration assets
Net cash outflows from investing activities
Cash flows from financing activities
Dividends paid to shareholders
Proceeds from loans and borrowings
Payments for loans and borrowings
Lease payments
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
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
6
4
14
14
14
131
2019
$m
1,139.9
(492.7)
(96.5)
(44.1)
(2.3)
6.3
510.6
(737.7)
–
(26.2)
(763.9)
(74.3)
–
–
(47.3)
(121.6)
(374.9)
505.1
3.8
134.0
2020
$m
1,253.0
(589.2)
(47.1)
(43.8)
(23.0)
0.5
550.4
(545.9)
43.0
(17.3)
(520.2)
(73.2)
225.0
(125.0)
(55.2)
(28.4)
1.8
134.0
(4.1)
131.7
132
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
INTRODUCTION
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 the development of mining projects.
The Company is incorporated and domiciled in Australia and limited by shares which are traded on the Australian Securities Exchange.
OZ Minerals’ registered office is located at 2 Hamra Drive, Adelaide Airport, South Australia 5950, Australia.
The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the year ended 31 December 2020:
are general purpose financial statements prepared 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 major operations. The controlled entities of the Company
have the functional currency of Australian dollars and US dollars. The financial statements of the Company include consolidation of its
subsidiaries referred to in Note 17
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.
Significant judgement has been applied for the commissioning of mine development projects during the year (see Note 7):
the Carrapateena mine commissioned on 1 January 2020
the Carrapateena processing plant and infrastructure commissioned on 1 March 2020
the Pedra Branca mine commissioned on 1 November 2020.
Subsequent to commissioning, revenue and associated costs of production of operating each project are recognised in the Consolidated
Statement of Comprehensive Income and depreciation of assets is commenced.
The COVID-19 pandemic impacted OZ Minerals’ stakeholders including its customers, suppliers and employees as measures were taken by
governments both locally and overseas to manage the pandemic. The pandemic did not materially impact the financial results of OZ Minerals
during the year except for minor expenditure incurred to support our stakeholders and to keep operating our Assets with the restrictions
imposed on the movement of people. The going concern assumption remains appropriate and while asset recoverability was not adversely
impacted, future long term impacts of the pandemic on commodity prices, foreign exchange rates, the well-being of people and material
movements remain uncertain and could have adverse impacts in future financial reporting periods.
Subsequent to 31 December 2020, the Board of Directors approved the Block Cave Expansion, which will unlock Carrapateena’s potential to
be a multi-generational, lowest quartile cash cost producing province, bringing long term value to our Stakeholders. The Board of Directors
has also resolved to pay a final dividend for the 2020 financial year, as discussed in Note 4. There were no other events that occurred
subsequent to the reporting date which have significantly affected or may significantly affect the Consolidated Entity’s operations or results
in future years.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
133
GROUP PERFORMANCE
1. OPERATING SEGMENTS
Segment
Principal activities
Prominent Hill
Carrapateena
Carajás
Exploration &
development
Mining and processing underground ore containing copper, gold and silver along with residual lower grade
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.
Mining and processing underground ore containing copper, gold and silver. The Carrapateena mine which
is located in the Gawler Craton of South Australia was constructed during 2019. The Carrapateena mine
generates revenue from the sale of concentrate containing copper, gold and silver to customers in Asia,
Europe and Australia.
Mining and processing ore containing copper and gold from the Antas open pit mine and the underground
Pedra Branca Mine in the Carajás Hub in Brazil. The Carajás Hub generates revenue from the sale of
concentrate containing copper and gold to customers in Europe and Asia.
Exploration and evaluation activities associated with other projects, including exploration arrangements
with Minotaur Exploration Ltd, Mithril Resources, Red Metal, Mineral Prospektering i Sverige, Inversiones
Mineras La Chalina S.A.C. and corporate development activities.
During the year, OZ Minerals acquired the residual 30 per cent interest in the West Musgrave project providing
OZ Minerals with a 100 per cent interest in the West Musgrave project. Further details are set out in Note 8.
The Company undertakes its own exploration on tenements around existing operating and development
Assets, including at the CentroGold project in the Gurupi province in Brazil.
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),
and treasury activities.
Recognition and measurement of revenue
The Consolidated Entity generates sales revenue primarily from the transfer of concentrate to buyers and in some cases, based on the
commercial terms of the contract, delivering it to customers. The performance obligation to transfer concentrate and delivery arises as
and when a shipment is agreed with customers against ongoing short and long term supply contracts. 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 a deduction from the value of metal contained within the concentrate and accordingly
are recognised as a deduction from revenue.
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, typically three months. 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 recorded in revenue when the associated instrument matures.
net reVenUe BY MetaL BY geograPhiCaL region
)
m
$
(
s
e
t
a
r
t
n
e
c
n
o
c
f
o
s
e
l
a
s
m
o
r
f
e
u
n
e
v
e
R
1000
800
600
400
200
0
18.7
373.0
601.9
9.1
149.6
548.0
3.3
121.5
159.0
4.3
60.1
245.6
2020 Asia
2019 Asia
2020 Australia
2019 Australia
Copper
Gold
Silver
18.5
2.0
44.1
2020 Europe
0.9
70.3
2019 Europe
19.1
Revenue information presented is based on the location of the customers’ operations. Three major customers (2019: three customers) who
individually accounted for more than 10 per cent of total revenue contributed approximately 78 per cent of total revenue (2019: 81 per cent).
Included within net revenue from customers in Asia was $152.2 million (2019: $105.1 million) attributable to customers in China.
134
net reVenUe BY MetaL
2020
Copper
Gold
Silver
Total
2019
Copper
Gold
Silver
Total
Prominent Hill
Carrapateena
$m
$m
Carajás
$m
541.3
396.5
12.3
950.1
808.6
218.1
14.1
1,040.8
199.1
102.4
11.1
312.6
–
–
–
–
64.6
14.1
0.6
79.3
55.3
10.7
0.2
66.2
Total
$m
805.0
513.0
24.0
1,342.0
863.9
228.8
14.3
1,107.0
Note: Prominent Hill gold revenue is presented net of realised losses on gold derivatives $92.7 million (2019: $23.9 million).
segMentaL finanCiaL inforMation
31 December 2020
Revenue
Cost of goods sold(a)
Underlying EBITDA(c)
Net depreciation and amortisation
Capital expenditure
Property, plant & equipment
31 December 2019
Revenue
Cost of goods sold(b)
Underlying EBITDA(c)
Net depreciation and amortisation
Capital expenditure
Property, plant & equipment
Prominent Hill
Carrapateena
$m
$m
Carajás
$m
950.1
(458.6)
535.7
(182.5)
127.0
751.8
1,040.8
(481.4)
587.4
(207.2)
105.8
717.8
312.6
(159.6)
126.3
(67.0)
278.3*
1,608.7
–
–
(21.1)
–
596.5
1,385.0
79.3
(46.5)
26.3
(13.2)
35.5*
208.2
66.2
(50.1)
5.0
(9.4)
9.9
219.9
Exploration &
development
Corporate
Consolidated
$m
–
–
(38.1)
–
–
317.2
–
–
(72.3)
–
–
332.0
$m
–
–
(43.9)
(20.7)
0.1
27.6
–
–
(36.6)
(12.3)
24.1
41.6
$m
1,342.0
(664.7)
606.3
(283.4)
440.9
2,913.5
1,107.0
(531.5)
462.4
(228.9)
736.3
2,696.3
* Capital expenditure is net of proceeds from sale of concentrate produced from ore mined during the development of the Carrapateena ($37.2 million) and Pedra Branca mines ($5.8 million).
(a) Cost of goods sold does not include net depreciation and amortisation, net realisable value (NRV) adjustments of $66.5 million of Prominent Hill ore, and corporate cost allocations (Prominent Hill
$11.3 million, Carrapateena $7.8 million and Brazil $1.8 million).
(b) Cost of goods sold does not include net depreciation and amortisation, net realisable value adjustments (Prominent Hill $38.3 million increase, Brazil $10 million decrease) and corporate cost
allocations (Prominent Hill $8.2 million, Brazil $2.5 million).
(c) OZ Minerals financial results are reported under IFRS. This Report and Results for Announcement to the Market include certain non-IFRS measures including underlying Earnings before interest
tax, depreciation and amortisation (EBITDA). These measures are presented to enable an understanding of the underlying performance of the Consolidated Entity and are consistent with the
information the Consolidated Entity’s chief operating decision makers use to assess the underlying performance of the business and make resource allocations.
There were no non-underlying items recorded during the year (2019: none).
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
reConCiLiation of ConsoLidated UnderLYing eBitda to Profit after tax
At 31 December
Underlying EBITDA(d)
Depreciation
Other assets amortisation
Capitalised depreciation unwind
Earnings before finance income and tax
Net finance expense
Profit before tax
Tax expense
Profit for the year attributable to equity holders of OZ Minerals Limited
135
2019
$m
462.4
(114.9)
(6.5)
(107.5)
233.5
(4.9)
228.6
(64.7)
163.9
2020
$m
606.3
(229.9)
(6.5)
(47.0)
322.9
(27.1)
295.8
(83.2)
212.6
(d) Underlying EBITDA includes net realisable value adjustments for Prominent Hill comprising a $66.5 million increase (FY 2019: $28.3 million). It also includes corporate and exploration expense
of $112.7 million (FY 2019: $140.0 million), Other income $0.3 million (FY 2019: $0.2 million), Other expense $4.4 million (FY 2019: $4.5 million) and foreign exchange loss of $20.7 million
(FY 2019: $0.9 million gain), which resulted from the movement in AUD:USD and BRL:USD currency exchange rates on translation of foreign currency transactions and foreign currency
denominated financial assets and liabilities.
net dePreCiation and aMortisation exPense for the Year
At 31 December
Mining
Processing
Site and corporate administration
Capitalised depreciation unwind
Total depreciation and amortisation expense
2. EARNINGS PER SHARE
Basic and diluted earnings per share – cents
Inputs used in calculating basic and diluted earnings per share
Profit after tax – $ millions
Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share
2020
$m
140.6
42.0
53.8
47.0
283.4
2020
65.2
2019
$m
72.5
26.0
22.9
107.5
228.9
2019
50.7
212.6
163.9
325,971,255
323,431,247
Basic earnings per share is calculated by dividing the profit attributable to equity holders of OZ Minerals Limited, by the weighted average
number of ordinary shares outstanding during the financial year. The weighted average is determined by the total number of shares on issue
less treasury shares held by the Company throughout the period.
Diluted earnings per share adjusts the amounts used in the determination of basic earnings per share to take into account dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive
potential ordinary shares.
3. INCOME TAX
Income tax expense comprises current and deferred tax of the Consolidated Entity. Current and deferred tax expenses are recognised in
other comprehensive income or directly in equity as is appropriate.
Recoverability of Deferred Tax Assets The Consolidated Entity is subject to income taxes in Australia and of the 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 probable of being accepted by the relevant tax authorities. 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. 136
Group taxation
The Consolidated Entity’s 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. No foreign operating affiliates are consolidated for tax purposes.
inCoMe tax exPense in the inCoMe stateMent
Current income tax expense
Deferred income tax expense
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%
Adjustments:
Variation in overseas tax
Non-deductible expenditure
Revision for prior periods
Recognition of previously unrecognised tax losses
R&D tax benefit
Other
Derecognition of overseas losses
Income tax expense
2020
$m
(57.3)
(25.9)
(83.2)
2020
$m
295.8
(88.7)
2.9
(6.8)
(0.3)
14.3
0.4
(4.0)
(1.0)
(83.2)
2019
$m
(54.6)
(10.1)
(64.7)
2019
$m
228.6
(68.6)
0.1
(14.1)
1.5
17.8
–
–
(1.4)
(64.7)
Unrecognised tax losses
A review of unrecognised tax losses was undertaken during the year and additional restricted tax losses of $14.3 million tax effected
(2019: $17.8 million) were recognised on the balance sheet. Restricted tax losses are subject to an available fraction, which limits the
amount of loss utilisation each year. During the financial year, $8.3 million tax losses (tax effected) were transferred to the Australian
tax consolidated group upon acquisition of Cassini Resources Limited. Australian restricted tax losses of $146.9 million tax effected
(2019: $152.9 million) remain unrecognised at 31 December 2020, inclusive of the Cassini Resources Limited transferred losses.
Capital losses of $595.9 million tax effected (2019: $595.0 million tax effected) remain unrecognised at 31 December 2020.
Deferred tax assets and liabilities
The movement in the Consolidated Entity’s recognised deferred tax balances are as follows:
31 December
2018
Recognised
in income
statement
Recognised
in equity
31 December
2019
Deferred tax assets
Unrestricted tax losses
Restricted tax losses
Lease liability
Provisions and accruals
Derivative financial instruments
Other
Total deferred tax assets
Set-off against deferred tax
liabilities
Net deferred tax assets
$m
–
34.1
–
14.2
4.6
8.1
61.0
(58.5)
2.5
$m
4.7
10.3
39.8
1.5
9.0
0.2
65.5
(60.9)
4.6
$m
–
–
15.4
–
11.3
–
26.7
(26.7)
–
$m
4.7
44.4
55.2
15.7
24.9
8.3
153.2
(146.1)
(4.3)
6.6
171.5
13.6
(3.8)
(3.9)
179.7
(179.4)
7.1
0.3
Recognised
in income
statement
Recognised
in equity
31 December
2020
$m
$m
$m
–
–
–
(0.4)
(10.3)
–
(10.7)
10.3
(0.4)
0.4
51.0
226.7
28.9
10.8
4.4
322.2
(315.2)
7.0
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
137
31 December
2018
Recognised
in income
statement
Recognised
in equity
31 December
2019
Recognised
in income
statement
Recognised
in equity
31 December
2020
$m
(4.8)
(4.8)
(309.6)
–
(3.9)
(323.1)
58.5
(264.6)
$m
$m
$m
0.2
(8.7)
(26.2)
(41.1)
0.2
(75.6)
60.9
(14.7)
–
(0.2)
(4.4)
(12.9)
–
(17.5)
26.7
9.2
(4.6)
(13.7)
(340.2)
(54.0)
(3.7)
(416.2)
146.1
(270.1)
$m
(0.4)
(5.8)
(28.3)
(171.0)
(0.1)
(205.6)
179.4
(26.2)
$m
–
2.3
15.8
–
–
18.1
(10.3)
7.8
$m
(5.0)
(17.2)
(352.7)
(225.0)
(3.8)
(603.7)
315.2
(288.5)
Deferred tax liabilities
Inventories
Exploration assets
Property plant and equipment
Right-of-use assets
Provisions and accruals
Total deferred tax liabilities
Set-off against deferred tax assets
Net deferred tax liabilities
Recognition and measurement of income taxes
Current tax
The tax 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 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.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 resolved on 18 February 2021 to pay a fully-franked dividend of 17 cents per
share. The record date for entitlement to this dividend is 12 March 2021.
OZ Minerals offers a Dividend Reinvestment Plan (DRP) and eligible shareholders may participate in the DRP in respect of all or part of their
shareholding. A discount of 1.5 per cent will apply to this allocation and there is no limit on the number of participating shares. Shares will
be allocated to shareholders under the DRP for the 2020 final dividend at an amount equal to the average of the daily volume weighted
average market price of ordinary shares of the Company traded on the ASX over the period of five trading days commencing on 11 March
2021. The last date for receipt of election notices for the DRP is 15 March 2021.
The financial impact of the dividend amounting to $56.4 million has not been recognised in the Consolidated Financial Statements for the
year ended 31 December 2020 and will be recognised in subsequent consolidated financial statements.
The details in relation to dividends announced or paid since 1 January 2019 are set out below:
Record date
Date of payment
Fully franked
Total dividends
12 March 2021
18 September 2020
12 March 2020
3 September 2019
12 March 2019
26 March 2021
5 October 2020
26 March 2020
17 September 2019
26 March 2019
cents per share
17
8
15
8
15
$m
56.4
26.0
48.6
25.9
48.4
Dividend
reinvestment
plan
Yes
Yes
No
No
No
138
5. INVENTORIES
inVentories
)
m
$
(
e
u
a
v
l
y
r
o
t
n
e
v
n
I
250
200
150
100
50
0
31 December 2020
31 December 2019
224.8
216.4
106.3
58.8
145.3
37.3
80.0
74.5
50.2
28.5
25.6
4.1
4.5
Concentrates
at cost
Concentrates
at NRV
Ore stockpile
(current) at cost
Ore stockpile
(current) at NRV
Ore stockpile
(non current) at cost
Ore stockpile
(non current) at NRV
Stores and
consumables at cost
Concentrates – at cost
Concentrates – at net realisable value
Ore stockpile – at cost
Ore stockpile – at net realisable value
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
2020
$m
106.3
–
37.3
80.0
28.5
252.1
50.2
216.4
266.6
518.7
2019
$m
58.8
4.1
145.3
4.5
25.6
238.3
74.5
224.8
299.3
537.6
An assessment of the NRV of ore stockpiles resulted in a net adjustment to increase the value of inventory by $66.5 million in 2020
(2019: $28.3 million). This increased the total ore stockpiles held at NRV to $296.4 million. The increase is mainly a reversal of previous
net realisable value write downs due to price assumptions partially offset by an ore inventory adjustment of $14.4 million following the
reassessment of the low grade gold ore stockpile quantities at Prominent Hill.
Recognition and measurement of inventories
Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs comprise direct materials, 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.
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.
Net Realisable Value of InventoriesInventories 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 calculation 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 positively or negatively.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
finanCiaL rePort
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 and amortisation
Lease amortisation
Foreign exchange loss/(gains) 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
Other provisions
Derivative financial instruments
Net current and deferred tax liability
Net cash inflow from operating activities
139
2019
$m
163.9
98.1
23.3
(3.8)
8.0
0.4
(13.4)
19.1
140.8
26.3
2.0
4.0
30.5
11.4
510.6
2020
$m
212.6
184.6
51.8
4.1
9.8
(2.1)
(67.3)
(7.7)
18.9
69.8
8.7
0.3
34.3
32.6
550.4
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.
140
7. PROPERTY, PLANT AND EQUIPMENT
Plant and
equipment
Mine property
and development
Freehold land
and buildings
Mineral rights
Capital work
in progress
$m
$m
$m
$m
$m
31 December 2020
At cost
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount at 1 January 2020
Additions and transfers
Pre-commissioning adjustment(b)
Depreciation
Foreign currency exchange differences
2,113.7
(1,030.0)
1,083.7
739.1
459.5
(21.6)
(90.6)
(2.7)
2,770.5
(1,529.0)
1,241.5
710.4
636.1(a)
(20.0)
(73.7)
(11.3)
Closing carrying amount at 31 December 2020
1,083.7
1,241.5
31 December 2019
At cost
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount at 1 January 2019
Additions and transfers
Depreciation
Foreign currency exchange differences
Closing carrying amount at 31 December 2019
1,679.0
(939.9)
739.1
360.2
425.5
(47.5)
0.9
739.1
2,165.8
(1,455.4)
710.4
316.5
424.6
(31.0)
0.3
710.4
247.6
(158.8)
88.8
102.4
0.3
(1.4)
(12.5)
–
88.8
248.7
(146.3)
102.4
56.1
59.2
(13.1)
0.2
102.4
317.2
–
317.2
479.6
(129.5)
–
–
(32.9)
317.2
479.6
–
479.6
474.4
–
–
5.2
479.6
Total
$m
5,631.3
(2,717.8)
2,913.5
2,696.3
483.9
(43.0)
(176.8)
(46.9)
2,913.5
5,237.9
(2,541.6)
2,696.3
1,999.5
781.8
(91.6)
6.6
182.3
–
182.3
664.8
(482.5)
–
–
–
182.3
664.8
–
664.8
792.3
(127.5)
–
–
664.8
2,696.3
Depreciation for the year of $176.8 million (2019: $91.6 million) increased primarily due to the commencement of depreciation of the
Carrapateena operations during 2020, following commissioning.
The mineral rights balance at 31 December 2020 of $317.2 million (net of foreign currency exchange differences) is attributable to the
Gurupi province (2019: $332.0 million). Mineral rights of $129.5 million attributable to the Carajás province have been reclassified to mine
development assets upon development of the Pedra Branca mine.
(a) During the year OZ Minerals paid US$50 million (A$62.2 million) upon meeting the production milestone of copper, gold or silver
under the original acquisition agreement of Carrapateena. This amount has been included within Mine Property and Development
in accordance with the Group’s accounting policy. The Group did not reach the milestone of production of rare earths, iron or
any other commodity which requires a milestone payment of US$25 million.
(b) Pre commissioning adjustment relates to Carrapateena and Pedra Branca mine pre production revenue of $37.2 million and
$5.8 million respectively.
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 that 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 occur 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.
Mineral rights comprise identifiable mineral resources and ore reserves which are acquired as part of a business combination and are
recognised at fair value at date of acquisition. Mineral rights are subsequently reclassified as mine property and development once mine
development commences.
Mine property and development assets include costs transferred from exploration and evaluation assets and mineral rights once technical
feasibility and commercial viability of an area of interest are demonstrated. After transfer, all subsequent expenditures to develop the mine
to the production phase and 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 the development of the asset prior
to it 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, rehabilitation, restoration and dismantling of assets after its use is included in
the cost of the respective asset if the recognition criteria for a provision is met including revision to the expected cost.
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.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
141
The recoverable amount is the higher of an asset’s fair value, less the cost 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 the 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 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 who would use the asset in its highest and best use.
Depreciation methods adopted by the Consolidated Entity
Category
Freehold land
Buildings and other infrastructure
Short term plant and equipment
Processing plant
Mine property and development
Depreciation method
Not depreciated
Straight line over life of mine
Straight line over life of asset
Units of ore extracted over mining inventory applicable to the development
Units of ore milled over mining inventory
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 date 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.
Mineral Resource and Ore Reserve 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; 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 units of ore available for extraction over which property, plant and equipment is depreciated.Recoverability of Assets 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, Carajás and Gurupi 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.When the Group reviewed impairment indicators, consideration was also 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 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. 142
8. EXPLORATION ASSETS
On 5 October 2020, OZ Minerals acquired the residual 30 per cent interest in the West Musgrave Project thereby consolidating its
ownership of the project to 100 per cent. The purchase was effected by acquiring Cassini Resources Limited (Cassini) under a Scheme of
Arrangement which included a pre-acquisition spinoff and capital return by Cassini. OZ Minerals issued 6,446,511 shares on 5 October
2020 to shareholders of Cassini, valuing the purchase at $89.6 million. The Company also incurred $9.4 million in transaction costs directly
attributable to the purchase which were capitalised resulting in the total cost of acquisition of $99.0 million.
The Scheme of Arrangement allows for contingent payments up to an aggregated cap of $20 million, which are payable in two scenarios:
$10 million (or pro-rata) if OZ Minerals sells 30 per cent or more of the West Musgrave project where the implied sale value for 30 per
cent of the project exceeds $76 million and $10 million (or pro-rata) calculated at 20 per cent of the value exceeding the implied value.
$10 million if OZ Minerals sells 30 per cent or more of the nickel stream to a mining company which produces, sells or markets base
metals.
The Company also inherited a deferred payment of:
a production milestone payment of $10 million, payable 12 months after commencement of production from the West Musgrave Project.
a 2 per cent net smelter royalty payable from future production from the tenements within the West Musgrave and Yarawindah Project.
The Contingent Payment and Deferred Payments are not recognised as liabilities as their payment remains wholly within the control
of the Group.
exPLoration assets
Opening balance at 1 January
Additions during the year(a)
Transferred from other assets
Foreign currency exchange difference
Closing balance 31 December
2020
$m
112.1
110.8
–
(7.1)
215.8
2019
$m
78.1
26.2
6.9
0.9
112.1
(a) Additions during 2020 include acquisition of the 30 per cent interest in West Musgrave Project amounting to $99.0 million.
Recognition and measurement of exploration expenditure
Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless it is expected to be recouped through
successful development and exploitation of the area of interest; or alternatively by its sale, in which case it is recognised as an asset on an
area of interest basis; or the exploration asset is acquired via an asset purchase or a business combination.
Exploration and evaluation assets are classified as tangible according to the nature of the assets. Exploration and evaluation assets are not
depreciated and are assessed for impairment when facts and circumstances suggest that the carrying amount exceeds the recoverable
amount.
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration
activity relates. A CGU is not larger than the area of interest. Once the technical feasibility and commercial viability of the extraction of
mineral reserves in an area of interest are demonstrated, exploration and evaluation assets attributable to that area of interest are first tested
for impairment and then reclassified to mine property and development assets within property, plant and equipment.
From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially
earn the right to mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Under these
agreements, OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of the tenement may possess.
Expenditure is accounted for under OZ Minerals accounting policy for exploration and evaluation expenditure.
Carrying Value of Capitalised Exploration Expenditure The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves. In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is not possible, an impairment test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure. The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or sale of the respective area of interest.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
9. RIGHT-OF-USE ASSETS
2020
Opening balance at 1 January
Transfers
Additions to right-of-use assets
Depreciation charge for the year
Closing carrying amount at 31 December
2019
Recognised upon transition to AASB 16 at 1 January
Additions to right-of-use assets
Derecognition during the year
Depreciation charge for the year
Depreciation capitalised to capital work in progress during the year
Closing carrying amount at 31 December
143
Total
$m
176.1
–
627.1
(53.1)
750.1
Total
$m
94.3
124.1
(1.6)
(23.3)
(17.4)
176.1
Powerline
infrastructure
Property
Plant &
equipment
$m
–
80.6
521.4
(16.0)
586.0
$m
6.2
–
0.3
(0.8)
5.7
$m
169.9
(80.6)
105.4
(36.3)
158.4
Property
Plant &
equipment
$m
5.1
1.8
–
(0.7)
–
6.2
$m
89.2
122.3
(1.6)
(22.6)
(17.4)
169.9
The right-of-use (ROU) assets include office space, mining equipment leases contained in mining service contracts, and powerline
infrastructure. During the year, the electricity transmission infrastructure built to transmit electricity to Carrapateena and Prominent Hill and
enable further expansion was commissioned by ElectraNet. The power transmission agreement was deemed to be a lease and accordingly, a
ROU asset of $521.4 million was recognised. Corresponding lease liabilities are recognised within ‘Loans and borrowings’ in the consolidated
balance sheet (refer to Note 14).
Recognition and measurement of ROU assets
An assessment is made, at inception or when contract terms are changed, to determine whether the contract is or contains a lease. A
contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for
consideration. The Consolidated Entity determines the consideration attributable to the lease or a lease component within a contract on
the basis of the standalone price of the assets for which a right of use is conveyed. However, for the leases of Powerline Infrastructure the
Consolidated Entity has elected not to separate non-lease components and account for the lease and non-lease components as a single
lease component.
As a lessee, the Consolidated Entity recognises a ROU asset representing its right to use the underlying asset and a lease liability representing
its obligation to make lease payments. Short term and low value leases are expensed in the consolidated statement of comprehensive
income on a straight-line basis over the life of the lease.
The Group recognises a ROU asset and a lease liability at the lease commencement date. The ROU asset is initially measured at cost (present
value of the lease liability, deemed cost of acquiring the asset and restoration or make good cost), and subsequently at cost less any
accumulated depreciation, impairment losses and adjustments for remeasurement of the lease liability. The ROU assets are depreciated over
the life of the lease. The lease liability is initially measured at the present value of the lease payments expected to be paid over the lease
term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the entity’s incremental borrowing
rate. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. The lease
liability is further remeasured if the estimated future lease payments change as a result of index or rate changes, residual value guarantees or
the likelihood of exercising purchase, extension or termination options.
The Group has estimated that the potential future lease payments, should it exercise the available extension options, would result in an
increase in the lease liability amount of $3.7 million.
Extension and Renewal of Lease The Consolidated Entity has applied judgement to determine the lease term for lease contracts that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which affects the measurement of lease liabilities and ROU assets recognised.Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group also reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control. 144
Amounts recognised in the Entity’s Consolidated financial statement for the year ended 31 December 2020
Income statement
Depreciation and amortisation
Lease interest (included in finance expense)
Expense relating to short term leases
Expense relating to leases of low-value assets, excluding short term
Cash flow statement
Lease liability payments (included in cashflows from net financing activities)
Lease interest paid (included in cashflows from operating activities)
Balance sheet
Right-of-use assets at carrying value
Addition to right-of-use assets
Lease liabilities (included in Loans and borrowings)
Current
Non-current liabilities
The variable lease payment in relation to the ROU assets for the year was immaterial.
Short term lease commitments
At 31 December 2020, the Group has short term lease commitments of $1.7 million.
10. PROVISIONS
2020
$m
51.8
12.2
0.9
0.2
55.7
12.2
750.1
627.1
(71.5)
(684.3)
2019
$m
23.3
1.5
0.5
0.2
43.6
1.5
176.1
124.1
(37.8)
(146.1)
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.
Mine Rehabilitation, Restoration & Dismantling ObligationsThe 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.OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
finanCiaL rePort
145
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.
Current
Other provisions
Total current provisions
Non-current
Other provisions
Mine rehabilitation
Total non-current provisions
Total provisions
Aggregate
Other provisions
Mine rehabilitation
Total provisions
Reconciliation of provisions
Opening carrying amount
Unwind of discount
Provisions increase
Closing carrying amount
2020
$m
0.3
0.3
10.5
111.2
121.7
122.0
10.8
111.2
122.0
2019
$m
1.0
1.0
9.6
87.8
97.4
98.4
10.6
87.8
98.4
Mine rehabilitation provision
87.8
2.2
21.2
111.2
11. COMMITMENTS
The Consolidated Entity has entered into various contracts with suppliers for the ongoing sustaining and growth development activities
at existing mines. The total capital expenditure commitment in relation to these contracts as at 31 December 2020 was $203.0 million
(2019: $707.3 million), of which $120.0 million is expected to be incurred in 2021.
146
CONTRIBUTED EQUITY
12. ISSUED CAPITAL
31 December
331,293,359 shares (2019: 323,874,831 shares)
share CaPitaL MoVeMent
31 December 2020
Opening balance at 1 January
Shares issued under employee share plans(a)
Shares issued for asset acquisition 5 October
Shares issued under DRP 5 October
Closing balance at 31 December
31 December 2019
Opening balance at 1 January
Shares issued on 16 January(a)
Closing balance at 31 December
2020
$m
2,371.4
2019
$m
2,280.4
Number of shares
Share capital
$m
323,874,831
2,280.4
872,969
6,446,511
99,048
–
89.6
1.4
331,293,359
2,371.4
322,899,831
2,280.4
975,000
–
323,874,831
2,280.4
(a) The increase in equity associated with employee share plans is accounted for as set out in Note 13. Shares granted are valued on grant date and accounted under the share-based payment
expense.
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 within 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 Company may also issue securities as consideration for asset acquisitions in lieu of cash. The fair value of assets acquired is measured
with reference to market observable prices adjusted for any matters specific to the arrangement. The value recognised as an increase in
issued capital reflects the fair value of assets acquired.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
147
13. SHARE-BASED PAYMENTS
The total expense arising from share-based payment transactions recognised during the year as part of employee benefit expenses was
$10.6 million (2019: $8.0 million). A description of OZ Minerals’ performance rights plans (PRP) and long term incentive plans (LTIP) is
provided below.
Element
Performance rights
granted under PRP
Performance rights granted under LTIP
Performance period 2020: 1 July 2020 to 1 July 2021
2020: 1 January 2020 to 31 December 2022
2019: 1 July 2019 to 1 July 2020
2019: 1 January 2019 to 31 December 2021
2018: 1 July 2018 to 1 July 2019
2018: 1 January 2018 to 31 December 2020
Service period
2020: 1 July 2020 to 1 July 2021
2020: 1 January 2020 to 31 December 2022
2019: 1 July 2019 to 1 July 2020
2019: 1 January 2019 to 31 December 2021
2018: 1 July 2018 to 1 July 2019
2018: 1 January 2018 to 31 December 2020
Vesting conditions Percentage vesting based on
1. Total shareholder return (TSR)
individual performance against
Key Performance Indicators
TSR performance measured Comparator Group
Percentage of vesting
Less than 50th percentile
50th percentile
Nil
50%
Between the 50th and 75th percentile
Straight-line vesting between 50% and 100%
75th percentile or greater
100%
2. All-In Sustaining Costs (AISC)(a)
OZ Minerals AISC over the performance period
Percentage of vesting
Above 50th percentile
50th percentile
Nil
50%
Between 50th percentile and 25th percentile (Lowest cost)
Straight-line vesting between 50% and 100%
25th percentile or below
100%
Exercise price
Nil
Nil
(a) The LTI Plan performance vesting conditions for 2018 were set on both TSR and absolute share price growth, weighted at 70 per cent and 30 per cent respectively. The 2020 and 2019 LTI Plan
(applicable to 2019 and subsequent years) was set on TSR and AISC, weighted at 70 per cent and 30 per cent respectively.
The total employee benefits expense for 2020 was $121.0 million of which $10.6 million was share-based payment (2019: $81.7 million,
share-based payment $8.0 million).
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 conditions. When issued, the shares on vesting of performance rights rank equally in all respects with previously issued, fully
paid ordinary shares.
148
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 LTIPs respectively. The models use the following inputs:
Grant date
Fair value
at grant date
Share price
at grant date
Performance rights granted under the LTIP
1 January 2020
Managing Director and CEO Tranche One (70%)
Managing Director and CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
1 January 2019
Managing Director and CEO Tranche One (70%)
Managing Director and CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
1 January 2018
Managing Director and CEO Tranche One (70%)
Managing Director and CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
Performance rights granted under the PRP
1 July 2020
1 July 2019
1 July 2018
Performance rights
$
6.0
8.4
5.7
9.0
6.2
8.6
6.2
8.6
6.4
4.5
6.7
4.5
11.1
9.9
9.3
$
9.0
9.0
9.6
9.6
9.2
9.2
9.2
9.2
9.0
9.0
8.8
8.8
11.3
10.3
9.5
the MoVeMent in the nUMBer of PerforManCe rights dUring the Year
Opening balance
Rights granted
Rights vested
Rights forfeited
Closing balance
Expected
volatility
%
31.0
31.0
29.0
29.0
31.0
31.0
31.0
31.0
45.0
45.0
45.0
45.0
33.0
28.0
45.0
Expected
dividends
Risk-free
interest rate
%
2.7
2.7
2.9
2.9
2.5
2.5
2.5
2.5
2.2
2.2
2.2
2.2
2.0
2.2
2.1
%
0.3
0.3
0.3
0.3
1.1
1.1
1.1
1.1
2.2
2.2
2.1
2.1
0.3
1.0
2.0
2020
Number
2,185,383
1,399,355
(996,820)
(34,204)
2019
Number
2,047,737
1,209,771
(955,377)
(116,748)
2,553,714
2,185,383
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 employees become unconditionally entitled to the instruments.
If the employee does not meet a non-market condition, such as a service condition or internal KPI, any cumulative previously recognised
expense is reversed.
The fair value of the share-based payment transactions granted is 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.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
149
RISK MANAGEMENT
14. FINANCIAL RISK MANAGEMENT
OZ Minerals’ Group Treasury Function (Group Treasury) evaluates and manages financial risks for the Group 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 commodity markets, financial markets, counterparty credit risk 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
counterparty credit risk
liquidity risk
interest rate 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)
Carried at fair value using level two valuation technique
(quoted market prices of copper, gold and silver adjusted
for specific settlement terms)
Investments in equity securities
Trade receivables
Derivative financial instruments
Carried at amortised cost
Cash and cash equivalents(a)
Other receivables(a)
Trade payables(a)
Other payables(a)
(a) The carrying value of each of these items approximates fair value.
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 1. Provisional
payments in relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due
within 90 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 or part of it expires or, the financial asset is transferred to another party without retaining control or substantially all risks
and rewards of the asset. On de-recognition of a financial asset, the difference between the carrying amount (measured at the date of
de-recognition) and the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain
or loss that had been recognised in equity is recognised in the income statement.
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment
as a result of one or more events having an impact on the estimated future cash flows of the asset. An impairment loss is recognised for
any expected credit loss for the lifetime of the financial asset, accounted for at amortised cost or fair value through other comprehensive
income. Credit losses are measured on the present value of all cash shortfalls between the cash flows due to the entity in accordance with
the contract and the expected cash flows.
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. Lease liabilities are recognised at net present value and
reduced by the actual payment made (refer Note 9).
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.
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 reversal is recognised in the income statement.
150
Derivative financial instruments
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 unless the derivative is designated as a hedging instrument in a hedge relationship.
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 a derivative financial instrument, which has been designated in a cashflow hedge relationship, will be recognised
in other comprehensive income to the extent the hedging relationship remains effective and the underlying hedge item has not been
recognised in the income statement, or will be 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 will be 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, gold and silver which
are priced on, or benchmarked to, open market exchanges.
Gold derivative contracts
OZ Minerals had entered into gold forward contracts to fix the price in AUD of a portion of its forecast gold sales which were designated as
cash flow hedges under AASB 9 and were assessed to be fully effective in managing the underlying risk. Accordingly, a fair value reduction
of $68.6 million was recognised in other comprehensive loss and $92.7 million was transferred out of Cash flow hedge reserve to profit and
loss during 2020. At 31 December 2020, contracts for 54,207 ounces of gold were outstanding with an average strike price of $1,782 per
ounce, as reflected in the chart below:
)
z
o
d
o
g
(
l
s
t
c
a
r
t
n
o
c
d
r
a
w
r
o
F
16,000
15,000
14,000
13,000
12,000
11,000
10,000
Forward contracts (gold oz)
Average contract forward price (A$ per gold oz)
F
o
r
w
a
r
d
P
r
i
c
e
(
A
U
D
p
e
r
g
o
d
o
z
)
l
1,860
1,840
1,820
1,800
1,780
1,760
1,740
1,720
1,700
Q1 2021
Q2 2021
Q3 2021
Q4 2021
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.
Commodity price sensitivity analysis
The analysis below reflects the impact of movements in copper and gold prices. Variations in silver prices have been deemed immaterial for
the purpose of this analysis. In accordance with Australian Accounting Standards, the sensitivity analysis is on all financial assets and liabilities
deemed material to the Consolidated Entity.
+10% movement
in copper prices
-10% movement
in copper prices
+10% movement
in gold prices
-10% movement
in gold prices
Impact on
income statement
net of tax
Impact on
income statement
net of tax
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
2020
Trade receivables
Gold hedges (FECs)
Total
2019
Trade receivables
Gold hedges (FECs)
Total
6.7
–
6.7
–
–
–
(6.7)
–
(6.7)
–
–
–
4.4
–
4.4
1.2
–
1.2
–
(13.3)
(13.3)
–
(35.5)
(35.5)
(4.4)
–
(4.4)
(1.2)
–
(1.2)
–
13.3
13.3
–
35.5
35.5
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT
finanCiaL rePort
151
A 10 per cent movement in copper and gold prices, which is based on reasonably possible changes over a financial year and reflects
the variability management applies in forecasting sensitivity, results in a $6.7 million and $4.4 million after tax impact respectively in the
income statement on the trade receivables balance of $160.3 million (2019: $83.1 million) and 10 per cent movement in gold prices also
has a $13.3 million after tax impact on the derivative financial liability of $36.2 million (2019: $70.6 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 (primarily USD and Brazilian Real).
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 and considers 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.
All exchange differences that arise on translating results and the financial position of all entities within the Consolidated Entity that have
a functional currency different from the presentation currency are recognised as a separate component of equity in the Foreign Currency
Translation Reserve. When a foreign operation is sold a proportionate share of such exchange differences is recognised in the Income
Statement as part of the gain or loss on sale where applicable.
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 their currency risk exposure at the reporting date are disclosed below.
2020
Cash and cash equivalents
Trade receivables
Trade payables
Total
2019
Cash and cash equivalents
Trade receivables
Trade payables
Derivative financial instruments
Total
exChange rates dUring the Year
AUD:USD
AUD:BRL
Denominated in US$ Other currencies
presented in A$m presented in A$m
97.5
160.3
(1.6)
256.2
25.2
82.7
(0.3)
(83.1)
24.5
7.8
–
(6.9)
0.9
6.5
–
(12.6)
–
(6.1)
Total
A$m
105.3
160.3
(8.5)
257.1
31.7
82.7
(12.9)
(83.1)
18.4
Average rate
31 December spot rate
2020
0.6910
3.5573
2019
0.6952
2.7421
2020
0.7694
3.9922
2019
0.7006
2.8239
At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the functional currency by 5 per cent and all
other variables were held constant, the Consolidated Entity’s after tax profit would have changed by $9.0 million and there would have been
no impact to the other comprehensive income (2019: $3.8 million after tax profit; $2.9 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
5 per cent change in the foreign currency rate.
Interest rate risk management and sensitivity analysis
The Consolidated Entity drew down a maximum of $150.0 million, at any one time, of the available credit facility during the year with
$100.0 million outstanding at the end of the year. The Consolidated Entity is exposed to changes in the Australian bank bill interest rate,
as the interest on the drawn amount is based on the Bank Bill Swap Bid Rate (BBSY) plus a margin. Loans and borrowings also include
lease liabilities recognised under AASB 16 which are subject to discounting.
At reporting date, if the Australian bank bill interest rates increased/(decreased) by 1 per cent, the Consolidated Entity’s after tax profit would
have not changed materially (2019: Nil). The sensitivity analysis includes impact of change in interest rates on interest bearing liabilities
such as borrowings at the reporting date and excludes lease liabilities and mine rehabilitation provisions which are non-interest bearing
liabilities.
152
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, investment of cash and derivative
financial instruments.
The credit risk on cash and cash equivalents and derivative financial instruments is managed by restricting financial transactions to
relationship banks which have Board-approved exposure limits and a minimum credit rating assigned by an internationally recognised
credit rating agency.
Credit risk in trade receivables is managed by restricting trade credit to Board-approved exposure limits with customers that have a minimum
credit rating or trade credit that is secured by a letter of credit from a bank with an acceptable credit rating.
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.
Maximum exposure to credit risk for trade receivables at the reporting date by customer geographic region
Europe
Asia
Australia
Total
2020
$m
63.7
89.7
6.9
160.3
2019
$m
0.2
73.5
9.4
83.1
Three major customers (2019: three customers) who individually accounted for more than 10 per cent of total revenue contributed
approximately 78 per cent of total revenue (2019: 81 per cent). These customers also represent 95 per cent of the trade receivables balance
as at 31 December 2020 (2019: 94 per cent). There were no instances of customer default during 2020 and there are no significant
receivables which are past due at the reporting date.
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, the maturity profiles of term deposits and maintaining committed available
bank credit 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 other obligations the
respective undiscounted cash flows for the upcoming financial years are presented.
ContraCtUaL CashfLoWs
2020
Non-derivative financial instruments
Cash and cash equivalents
Trade receivables
Other receivables
Trade payables
Other borrowings
Lease liabilities
Derivative financial instruments
Derivative financial liabilities
Total
2019
Non-derivative financial instruments
Cash and cash equivalents
Trade receivables
Other receivables
Trade payables
Lease liabilities
Derivative financial instruments
Derivative financial liabilities
Total
Carrying amount
<1 year
1-2 years
2-5 years
>5 years
Total
131.7
160.3
13.5
(190.1)
(100.0)
(755.8)
(36.3)
(776.7)
134.0
83.1
23.4
(168.6)
(183.9)
(83.1)
(195.1)
131.7
160.3
13.5
(190.1)
(100.0)
(96.8)
(37.0)
(118.4)
134.0
83.1
23.4
(168.6)
(43.0)
(60.4)
(31.5)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(94.5)
(238.5)
(528.0)
–
(94.5)
–
(238.5)
–
(528.0)
–
–
–
–
–
–
–
–
–
–
–
–
(27.5)
(68.0)
(82.8)
(22.7)
(50.2)
–
(68.0)
–
(82.8)
131.7
160.3
13.5
(190.1)
(100.0)
(957.8)
(37.0)
(979.4)
134.0
83.1
23.4
(168.6)
(221.3)
(83.1)
(232.5)
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
153
Loans and Borrowings
The Consolidated Entity recognised the draw-down of its revolving credit facility within Other borrowings for the year. Lease liabilities are
recognised for any new ROU lease contracts as they are entered. When lease contracts are terminated or altered, the unpaid lease liability
and net carrying value of ROU assets is derecognised.
Opening balance 1 January
Lease liabilities recognised on transition
to AASB 16 ‘Leases’
Debt facility drawdown
Lease recognised during the year
Accretion of interest
Lease terminations during the year
Repayment during the year
Closing balance at 31 December
31 December 2020
31 December 2019
Other borrowings
Lease liabilities
Total Other borrowings
Lease liabilities
$m
–
–
225.0
–
–
–
(125.0)
100.0
$m
183.9
–
–
627.1
12.2
–
(67.4)
755.8
$m
183.9
–
225.0
627.1
12.2
–
(192.4)
855.8
$m
–
–
3.7
–
–
–
(3.7)
–
$m
–
105.2
–
124.1
1.5
(1.8)
(45.1)
183.9
Total
$m
–
105.2
3.7
124.1
1.5
(1.8)
(48.8)
183.9
Other borrowings represent the drawn down balance of the revolving facility as at the reporting date. The Lease liabilities recognised during
the period include arrangements identified within certain mining services supply contracts of $105.5 million, the powerline infrastructure
agreement of $521.4 million, and other agreements of $0.3 million. The increase in lease liabilities corresponds to the increase in ROU assets
(refer Note 9).
Current
Other borrowings
Lease liabilities
Balance at 31 December
Non-current
Lease liabilities
Balance at 31 December
2020
$m
100.0
71.5
171.5
684.3
684.3
2019
$m
–
37.8
37.8
146.1
146.1
In the first quarter of the year, in response to the COVID-19 pandemic, the Consolidated Entity increased its unsecured revolving credit
facility by $183.0 million to $483.0 million (2019: $300.0 million), expiring 10 April 2023. The revolving credit facility is subject to
maintaining certain financial covenant ratios. The Company was not in breach of its financial covenants as at 31 December 2020.
The Consolidated Entity entered into additional bank guarantee facilities for a total credit amount of $150.0 million. At 31 December 2020
bank guarantees totalling $438.5 million had been issued to support the Consolidated Entity’s contingent obligations which primarily relate
to power infrastructure agreements and mine rehabilitation obligations, both of which are recognised as a liability as set out in the respective
notes.
15. CONTINGENCIES
Bank guarantees
OZ Minerals Group Treasury Pty Ltd has provided certain financial 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 $438.5 million as at 31 December 2020 (2019: $369.2 million) and are issued under bilateral bank facilities that are rolled
forward every twelve months.
Contingencies By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities disclosed in the financial statements requires the exercise of significant judgement regarding the outcome of future events and 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. 154
Deeds of indemnity
The Consolidated Entity has granted indemnities under deeds of indemnity with current and former executive and Non-executive Directors,
current and former officers, the former General Counsel–Special Projects, former Group Treasurers 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 entities, 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 Consolidated Entity 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, certain 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
A minor legal provision has been raised in relation to the investigation into the Company’s former Cambodian operations and the events of
2009, however the final outcome of this investigation has still not been determined.
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 Consolidated Entity’s financial position.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
155
GROUP STRUCTURE AND OTHER INFORMATION
16. PARENT ENTITY DISCLOSURES
As at, and throughout the financial year ended 31 December 2020, the parent entity of the Consolidated Entity was OZ Minerals Limited.
Net provision (increase) reversal for non-recovery of loan to subsidiary
Dividend income
Net other expense
Net (loss)/profit for the year
Other comprehensive income/(loss)
Total comprehensive (loss)/income
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
Retained earnings
Accumulated losses
Total equity
2020
$m
(5.6)
–
(22.4)
(28.0)
3.9
(24.1)
11.5
2,494.8
2,506.3
40.0
7.1
47.1
2019
$m
14.1
250.0
(10.5)
253.6
(7.6)
246.0
7.1
2,482.3
2,489.4
22.8
9.0
31.8
2,459.2
2,457.6
2,371.4
318.2
(230.4)
2,459.2
2,280.4
417.1
(239.9)
2,457.6
OZ Minerals Limited is able to manage its net current liability position by its ability to control the timing of dividends from its subsidiaries.
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure
commitment as at 31 December 2020 was nil (2019: 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 dividends paid during the year
Franking account balance at end of year
2020
$m
184.1
51.0
(8.7)
(31.9)
194.5
2019
$m
171.9
46.8
(2.7)
(31.9)
184.1
156
17. 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 any contractual arrangements with other vote
holders, rights arising from other contractual arrangements, 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.
Subsidiaries
During the year OZ Minerals Musgrave Holdings Pty Ltd (ACN: 640 209 392) and OZ Minerals Musgrave Operations Pty Ltd (ACN: 640 213
341) were incorporated as wholly owned subsidiaries on 8 April 2020. Cassini Resources Pty Ltd (ACN: 149 789 337) and its subsidiaries
Crossbow Resources Pty Ltd (ACN: 161 472 788) and Wirraway Metals & Mining Pty Ltd (ACN: 142 690 346) were acquired under the
Scheme of Arrangement to acquire the West Musgrave exploration and evaluation assets (refer Note 8). The above mentioned entities all
have Australian dollar functional currency.
The wholly-owned controlled entities of OZ Minerals Limited are listed below:
Entity
Country of incorporation
Entity
OZ Minerals Brazil (Holdings) Pty Ltd
Avanco Resources Pty Ltd
Avanco Holdings Pty Ltd
Estrela Metals Pty Ltd
AVB Copper Pty Ltd
AVB Brazil Pty Ltd
AVB Carajás Holdings Pty Ltd
AVB Minerals Pty Ltd
Mineração Águas Boas Ltda
AVB Mineração Ltda
Avanco Resources Mineração Ltda
SLM – Santa Lúcia Mineração Eireli
MCT Mineração Ltda
ACG Mineração Ltda
Australia
Avanco Lux I S.C.S
Australia
Carrapateena Pty Ltd
Australia
CTP Assets Pty Ltd
Australia
CTP Operations Pty Ltd
Australia Minotaur Resources Holdings Pty Ltd
Australia
OZ Exploration Pty Ltd
Australia
OZ Minerals Equity Pty Ltd
Australia
OZ Minerals Group Treasury Pty Ltd
Brazil
OZ Minerals Holdings Pty Ltd
Brazil
OZ Minerals Insurance Pte Ltd
Brazil
OZ Minerals International (Holdings) Pty Ltd
Brazil
OZ Minerals Investments Pty Ltd
Brazil
OZ Minerals Jamaica Limited
Brazil
OZ Minerals Prominent Hill Operations Pty Ltd
ARL South America Exploration Ltd
Bermuda
OZ Minerals Prominent Hill Pty Ltd
ARL Holdings Ltd
Avanco Lux S.a.r.l.
OZ Minerals Carrapateena Pty Ltd
OZM Carrapateena Pty Ltd
OZ Minerals Musgrave Holdings Pty Ltd
OZ Minerals Musgrave Operations Pty Ltd
Cassini Resources Pty Ltd
Bermuda
OZ Minerals Services Pty Ltd
Luxembourg
OZ Minerals Zinifex Holdings Pty Ltd
Australia
Crossbow Resources Pty Ltd
Australia Wirraway Metals & Mining Pty Ltd
Australia
OZ Minerals Peru S.A.C
Australia
OZ Exploration (USA) LLC
Australia
ZRUS Holdings Pty Ltd
Country of incorporation
Luxembourg
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
Jamaica
Australia
Australia
Australia
Australia
Australia
Australia
Peru
USA
Australia
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
157
18. DEED OF CROSS GUARANTEE
The Company and all its Australian domiciled subsidiaries listed in Note 17 to the Consolidated Financial Statements, except for,
OZ Minerals International (Holdings) Pty Ltd and ZRUS Holdings Pty Ltd, are party to a Deed of Cross Guarantee (‘Deed’).
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of the 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.
During the year OZ Minerals Musgrave Holdings Pty Ltd and OZ Minerals Musgrave Operations Pty Ltd were added into the Deed of Cross
Guarantee.
Set out below is the Consolidated Statement of Comprehensive Income and Consolidated Balance Sheet of the entities within the Deed.
ConsoLidated stateMent of CoMPrehensiVe inCoMe of the entities Within the deed of Cross gUarantee
Revenue
Other income
Mining
Processing
Freight
Site administration
Royalties
Inventory movement
Corporate administration
Exploration and corporate development
Other expenses
Foreign exchange loss
Profit before interest and income tax
Finance income
Finance expense
Profit before income tax
Income tax
Profit for the year
Other comprehensive gain/(loss)
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 Income Statements
Cash flow hedges reserve change in fair value
Cash flow hedges reclassified to profit and loss
Other comprehensive gain/(loss) for the year, net of tax
Total comprehensive income for the year
2020
$m
1,262.7
0.2
(394.5)
(203.0)
(43.3)
(103.0)
(62.1)
(22.1)
(54.0)
(45.0)
(4.0)
(18.4)
313.5
0.3
(26.5)
287.3
(79.5)
207.8
2019
$m
1,040.8
–
(218.2)
(135.0)
(73.9)
(39.2)
(57.5)
(136.2)
(47.2)
(55.0)
(4.5)
(1.2)
272.9
4.5
(8.4)
269.0
(65.2)
203.8
3.9
(7.6)
(40.8)
64.9
28.0
235.8
(52.0)
23.9
(35.7)
168.1
158
ConsoLidated BaLanCe sheet of the entities Within the deed of Cross gUarantee
Current assets
Cash and cash equivalents
Trade receivables
Inventories
Prepayments
Other receivables
Total current assets
Non-current assets
Inventories
Exploration assets
Property, plant and equipment
Right-of-use assets
Investment in subsidiaries which are not party to the Deed
Other assets
Total non-current assets
Total assets
Current liabilities
Trade payables and accruals
Other payables
Current tax provision
Employee benefits
Provisions
Derivative financial instruments
Loans and borrowings
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Employee benefits
Provisions
Derivative financial instruments
Loans and borrowing
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
Total equity
2020
$m
98.2
157.3
236.4
8.5
193.6
694.0
266.6
144.0
2,392.4
750.1
346.0
32.2
3,931.3
4,625.3
2019
$m
114.2
79.2
225.8
4.6
180.8
604.6
299.3
33.1
2,181.2
176.1
304.1
30.0
3,023.8
3,628.4
172.2
144.7
3.8
19.6
21.1
0.3
36.3
171.5
424.8
124.2
3.2
102.3
–
684.3
914.0
1,338.8
3,286.5
2,371.4
(25.4)
940.5
3,286.5
2.9
8.5
13.3
0.2
60.4
37.8
267.8
88.0
1.7
78.1
22.7
146.1
336.6
604.4
3,024.0
2,280.4
(49.4)
793.0
3,024.0
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
159
19. KEY MANAGEMENT PERSONNEL
Key management personnel remuneration
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
Share-based payments
Total
2020
$
2019
$
4,591,323
4,105,168
66,080
125,602
1,970,172
6,753,177
51,590
140,028
1,574,624
5,871,410
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 high availability corporate
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
20. RELATED PARTY TRANSACTIONS
A number of KMP, or their related parties, may 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.
During the year the Group did not enter into any related party transactions (2019: None).
21. REMUNERATION OF AUDITORS
Audit and review services
Audit and review of financial statements – Group
Audit and review of financial statements – controlled entities
Total fee for audit and review services
Assurance services
Sustainability and NGERS assurance
Other assurance services
Total fee for audit, review and assurance services
Other services
Taxation advice and tax compliance services
Other services
Total fee for other services
Total fees
2020
$
525,000
–
525,000
82,900
2,500
610,400
20,500
5,000
25,500
2019
$
530,000
45,000
575,000
101,400
–
676,400
31,310
40,000
71,310
635,900
747,710
In addition to the amounts disclosed above, Cassini Resources Pty Ltd incurred $216,816 in relation to the tax compliance and advisory services provided by KMPG prior to the acquisition
by OZ Minerals.
160
22. NEW ACCOUNTING STANDARDS
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 and Sustainability Report for the year ended 31 December 2019. A number of new standards were
effective from 1 January 2020 and they did not have a material effect on the Group’s financial statements for the year.
Issued Standards and Pronouncements not early adopted
A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2021 and earlier
application is permitted; however, the Group has not early adopted any of the forthcoming new or amended standards in preparing these
Consolidated Financial Statements for the year.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
161
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 128 to 160
and the remuneration disclosures that are contained in the Remuneration Report
on pages 50 to 69, 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 2020 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 132 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 18, 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 2020.
Signed in accordance with a resolution of the directors.
Rebecca McGrath
Chairman
18 February 2021
Andrew Cole
Managing Director and CEO
18 February 2021
162
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 Group’s financial position as at 31 December 2020 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:
Consolidated balance sheet as at 31 December 2020;
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 Group consists of OZ Minerals Limited (the Company) and the entities it controlled at
the year end or 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 Group 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 (including Independence Standards)
(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
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.
This matter was 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 this
matter.
© 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
163
Valuation of Low Grade Gold Ore Stockpiles ($296.4m)
Refer to Note 5 to the Financial report
The key audit matter
How the matter was addressed in our audit
Significant judgment is exercised by the
Group in their determination of the value of
low grade gold ore. The low grade gold ore
will be combined with copper ore to produce
concentrate. The valuation of low grade gold
ore stockpiles is a key audit matter due to:
The significant judgment required by us
to assess the key assumptions used in the
Group’s valuation model.
The size of low grade gold ore stockpiles
as a proportion of total assets (6.2%).
The Group’s valuation model estimates
future proceeds 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 focused on the significant forward-
looking assumptions the Group applied in
their valuation model, including:
Future metal production levels (ore blend
rates), 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
planned to be processed and sold.
The timing of production, which depends
on the available capacity of the processing
mill.
Assumptions are forward looking and / or not
based on observable data and are therefore
inherently judgmental to audit.
Our procedures included:
We tested the Group’s key controls
relevant to:
The valuation of low grade gold ore
stockpiles, including board review and
approval of key assumptions used in the
Group’s model such as commodity prices
and foreign exchange rates; and
The process for recording and
monitoring volumes and grades of
stockpiled low grade gold ore, such as
the 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 the accounting standards.
We attended the Group’s internal stockpile
survey and compared the results of the
quantity surveyors to the volume of low
grade gold ore stockpiles recorded in the
Group’s model at 31 December 2020.
We compared grades of stockpiled low
grade gold ore recorded in the model to
the grades recorded in previous periods
and to the Group’s internal surveyor’s 31
December 2020 measurement of grades.
We assessed the scope, competence
and objectivity of the Group’s internal
surveyors, to grade the low grade gold
ore stockpiles.
We challenged the Group’s key
assumptions used in the model to
determine the value of low grade gold
ore stockpiles by:
Comparing future processing costs of
low grade gold ore to historical actual
processing costs.
Assessing future selling costs against
current costs, by comparing to a sample
of existing customer sales contracts.
Assessing future commodity prices and
foreign exchange rates applied by the
Group against published analyst and
broker data.
Comparing forecast production of
low grade gold ore to be processed to
publicly disclosed mill capacity.
164
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. 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, defined sustainability information within the
Sustainability Report and our related assurance opinions.
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 Group and Company’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 Group and Company or to cease
operations, or have no realistic alternative but to do so.
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.
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.
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: auasb.gov.au/admin/file/
content102/c3/ar1_2020.pdf.
This description forms part of our Auditor’s Report.
OZ MINERALS2020 ANNUAL & SUSTAINABILITY REPORT finanCiaL rePort
165
REPORT ON THE REMUNERATION REPORT
Opinion
In our opinion, the Remuneration Report of OZ Minerals Limited for the year ended
31 December 2020, 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 in pages 50 to 69 of the Directors’
Report for the year ended 31 December 2020.
Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
KPMG
Paul Cenko
Partner
18 February 2021
166166
SHAREHOLDER
INFORMATION
CAPITAL
Share capital comprised 331,763,505 fully paid ordinary shares on 8 February 2021.
SHAREHOLDER DETAILS
At 8 February 2021, OZ Minerals had 39,995 shareholders. There were 410 shareholdings
with less than a marketable parcel of $500 worth of ordinary shares.
toP 20 inVestors at 8 feBrUarY 2021
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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