OTML profits fall A$500m

Business, Normal

The National, Monday March 10th, 2014

 OK TEDI Mining has reported a drop in profits – from A$519 million (K1.1 billion)  in 2012 to A$19 million (K41 million) last year, The Australian reports.

The company has blamed its performance on a fall in world metal prices, a failure in the processing plant, unusually high rainfall causing a pit to be flooded, sporadic dry weather lowering river levels and affecting shipments, a typhoon hitting facilities owned by Ok Tedi’s biggest customer in the Philippines, a crusher failure, high fluorine levels in the copper concentrate and the need for repair work on the processing plant. 

However, it reported a 47% improvement in its safety performance.

An extension of the mine life is presumed, but has not yet been formally concluded.

As a result of the 2013 slump in earnings, shareholders – led by the national government, with 87.8 % – will not receive any dividends.

This constitutes a major blow to the 2014 national budget, which is 13.8% above 2013 and for which a high deficit, 5.9 % of gross domestic product, was already planned.

In 2011, the government received 16 % of its entire income from Ok Tedi taxes of A$543 million (K1.1 billion).

The mine also faces this year a challenge from several South Fly River communities, which six weeks ago obtained a National Court order to stop waste being dumped in the river system.

Justice Gibbs Salika ordered a preliminary report into environmental and health impacts of dumping mine waste in the river to be provided in three months.

Prime Minister Peter O’Neill, announcing a government-sponsored appeal against the court order, warned of “massive and unintended consequences” – with lawyers likely to emerge as “the only winners”. –