THE next 12 months will see Papua New Guinea's Ok Tedi Mining Ltd (OTLM) complete the transition from current lower grade ore to high grade ore sources, according to the company.
Commenting on OTML’s annual review 2021 report, managing director and chief executive officer Musje Werror and board chairman Roger Higgins said they had hoped the transition would start to be evident by the final quarter of 2022 but the impact of the Coronavirus (Covid-19) on material movement in the mine over the last 15 months had pushed this into 2023.
According to OTML, copper production was 21 per cent lower than the previous year primarily due to a 26 per cent fall in the copper grade of ore processed.
Gold production was similarly lower than the previous year with a 25 per cent fall attributable to a 32 per cent reduction in gold grade and impacts associated with the process plant fire and the Covid-19.
However, according to the report, despite the lower production, revenue was within six per cent of the previous year.
“This was primarily due to the copper price strengthening in 2021,” Werror said.
“The gold price was largely unchanged.
“Total operating costs in 2021 were K190 million or seven per cent higher than the previous year.
“As a result, the 2021 profit after tax was K376 million, generating K331 million of free cash flow.
“This enabled the company to pay a K450 million dividend, retain K251 million of cash reserves and have no debt at year end.
“In addition, OTML contributed US$675 million (about K2.3 billion) in foreign reserves to the domestic market.”
Meanwhile, as part of local and regional suppliers programme to maximise value for PNG, OTML made progress following the establishment of umbrella companies representing the interests of mine villages, impacted communities, and the province.
“The intent is to develop companies with an operational capability and financial resilience that will exist beyond Ok Tedi,” Werror said.
“We are also looking to support initiatives that broaden the industry base beyond mining.”
Statement