OZ Minerals gives green light to mine expansion

A $1.75bn expansion of its newly opened Carrapateena mine will eventually more than double the mine’s production capacity.

Oz Minerals CEO Andrew Cole at the head office, Adelaide. Kelly Barnes/The Australian

OZ Minerals has ticked off on a $1.75bn expansion of its newly opened Carrapateena mine, saying it will push ahead with the construction of a block cave ­operation that will eventually more than double the mine’s production capacity.

The South Australian copper miner pulled the trigger on the block cave expansion on Friday, saying its success in ramping up production at Carrapateena early had given it the confidence to push ahead with the next stage of the mine’s development.

Carrapateena is set to produce about 70,000 tonnes of copper a year over the next four years, along with 85,000 ounces of gold. The block cave development, when it is completed, is tipped to lift production to 110,000-120,000 tonnes of copper and 110,000-120,000 ounces of gold.

OZ released its December quarter production report on Friday, saying its mines produced 20,231 tonnes of copper in the period, taking its total to 97,620 tonnes for the full year — well within its guidance range of 88,000-105,000 tonnes.

Its copper was produced at an average all-in-sustaining cost of US49.8c a pound.

The company booked revenue of $1.3bn for 2020, closing the year in a net cash position of $32m.

OZ Minerals CEO Andrew Cole said the company was well positioned to take advantage of the growing demand for copper over the coming decade, with the company also looking to expand the capacity of its Prominent Hill operations and move closer to a final investment decision on its West Musgrave base metals project in Western Australia.

Mr Cole said the strength of its operations and the copper price would help the company pay for its growth projects from its own cashflow. Despite ongoing pressure across the sector for shareholder returns, he said OZ Minerals was firmly focused on its growth prospects.

“We do pay a consistent dividend to shareholders to recognise their support on an ongoing basis and I think that’s symbolic and important,” he said. “But primarily we’re a growth-oriented company, and that’s partly because we have some really good projects within our organic pipeline that will create more value than returning that money to shareholders will.”

OZ Mineral shares closed up 15c at $18.65 on Friday.