OZ Minerals aims to be carbon free by 2030 after bumper profit
OZ Minerals has joined Fortescue Metals Group in setting an ambitious new goal of making its operations carbon-free by 2030.
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OZ Minerals has joined Fortescue Metals Group in adopting an aggressive target of eliminating its operational carbon footprint by 2030, outlining a new strategy to reduce emissions as it delivered its best half-year profit in a decade on Monday.
OZ Minerals will pay an 18c a share dividend after booking a $531m net profit for 2021, up 150 per cent on the rising copper price and the entry of its Carrapateena mine into the market.
The Australian copper major booked $1.16bn in earnings before interest, tax, depreciation and amortisation, on record revenue of $2.1bn.
Increased volumes of copper sold added $291.7m to OZ Minerals’ underlying results, with the copper price – up an average 42 per cent compared to 2020 – delivering another $471.8m.
However, managing director Andrew Cole warned that disruptions to its South Australian operations in the December quarter caused by the spread of the Omicron variant were still an issue for the company, and heavy weather had hit this year’s production.
“These results were delivered notwithstanding a more difficult final quarter impacted by Covid-related absenteeism which has continued into 2022,” he said. “When combined with an extreme rain event that affected our South Australian logistics, we are likely to see a slower start to 2022 production, building back in line with full-year guidance as the year progresses.”
The company emerges from 2021 debt-free and with $215.4m cash in the bank as it looks to make a final investment decision on a giant new base metals mine in remote Western Australia in 2022.
OZ will also need to spend to accelerate its carbon strategy, matching Fortescue’s target of eliminating net carbon emissions by 2030.
The company said on Monday it hoped to halve its scope 1 and 2 emissions by 2027, and to be effectively carbon-neutral three years after that date.
A large portion of that will be achieved through the South Australian grid, which already gets 66 per cent of its power from renewable sources and is likely to be fully renewable by 2030.
But, while the copper producer’s operations are far smaller than those of Fortescue, the company faces similar challenges as the iron ore major in excising diesel from its Australian and Brazilian mines.
The company has already committed to install an electric hoisting shaft at its Prominent Hill operations and is looking to extend electrified underground haulage at its Carrapateena mine.
OZ Minerals says it will begin commercial trials of other forms of electric haulage by next year, and then progressively displace its haulage and other heavy mechanised fleet by 2027.
The company said it would use carbon offsets only to “address residual emissions” where the technology was not yet available for full decarbonisation.
“Our priority remains to directly reduce our emissions,” the company said.
The company will also embed its carbon emission targets into the short and long-term bonus structures offered to its senior executives.
OZ Minerals shares closed down 12c at $26.03 on Monday.
Originally published as OZ Minerals aims to be carbon free by 2030 after bumper profit
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