Ok Tedi mine posts K1.2 billion profit

By MALUM NALU
 

Ok Tedi Mining Ltd, now 100% owned by the people of PNG through the PNG Sustainable Development Program (63.4%) and PNG government (36.6%), made a net profit of K1.2 billion in 2011 from total sales revenue of K4.5 billion, The National reports.

This was a drop from the 2010 profit of K2 billion from sales revenue of K5 billion, managing director and chief executive officer Nigel Parker announced at yesterday’s PNGSDP annual report meeting at the Crowne Plaza in Port Moresby.

Parker…OTML now 100% PNG-owned.-Nationalpic by MALUM NALU

He said dividends totaling K1.65 billion were paid out to: PNG government (K141 million), Mineral Resources Ok Tedi (K23.6 million, equity representing Fly River provincial government), Mineral Resources Star Mountains (K23.6 million, landowners)  community mine continuation agreement villages (K47.2 million), non CMCA villages (K47.2 million), Inmet Mining (K877 million), and PNGSDP (K490.4 million).

The PNG government holds the people’s investment in OTML as direct account to the nation via Treasury (18.3%), Fly River provincial government (3.05%), landowners (3.05%), CMCA region (6.1%), and non-CMCA region (6.1%).

The PNGSDP holds 63.4% for the people of PNG.

Parker said OTML was now in a strong financial position with a strong balance sheet positioned for the future, no financial borrowings, no lease commitments, a small specific hedge programme, and shareholders’ funds totaling K2.4 billion.

“2011 was a difficult operating year due to failure of the pyrite concentrate pipeline that closed production down for four weeks, one week for a fatality in the mill and other plant reliability issues,” he told the meeting.

“Copper and gold prices remained strong in 2011, but Kina expenditures were impacted by the weak US Dollar.

“The cash operating cost were well within reasonable limits of the 2011 budget.”

Parker stressed that all Papua New Guineans should be proud because OTML was now 100% PNG-owned.

“OTML is now a PNG national asset arguably worth US$ 3 billion-plus on a commercial basis,” he said.

 “However, if valued from the perspective of the total cash return to the state, the value is far more substantial.”

Parker said 2011 heralded the beginning of a new era, as at the exit of BHP, the mine was expected to close in 2010.

“Subsequent years have seen significant growth in revenues driven by consistent concentrate production and metal prices,” he said,

“In January 2011, OTML bought back the Inmet Mining Corporation’s 18% shareholding for US$ 335 million and those shares were cancelled.

“The surviving shareholders equity increased proportionately as result of the cancellation of the Inmet shares: PNGSDP 63.40%, and the People of PNG 36.60% 

“The current mine life has been reassessed and is expected to close during 2015.”