Newcrest Profits US$1.2 billion

by PNG Business News - October 11, 2021

Photo credit: The West Australian - Newcrest Managing Director and Chief Executive Officer Sandeep Biswas

In the financial year 2021, Newcrest Mining Limited made a statutory and underlying profit of US$1.2 billion.

In the 2021 annual report, Managing Director and Chief Executive Officer Sandeep Biswas stated, "It has been more than 18 months since the onset of the COVID-19 epidemic, and we are still experiencing its catastrophic effects throughout the world."

Newcrest's operations were able to continue operating without any major disruptions, according to Biswas, because of the devotion and personal sacrifice of its employees.

“I extend my personal gratitude to those who have endured extended periods away from their families to ensure that our business was able to continue without material disruption,” he said.

As a result, Biswas said that the firm produced 2.1 million ounces of gold at an All-In Sustaining Cost (AISC) of $911 per ounce in FY21, resulting in another outstanding operational and financial performance.

“Our strong operating performance, combined with the benefit of higher gold and copper prices, underpinned a record free cash flow of $1.1 billion and a record statutory and underlying profit of $1.2 billion, 80 per cent and 55 per cent higher than the prior-year respectively.

We expect that the contribution of copper will continue to increase, with the relative proportion of copper to Cadia’s revenue expected to increase over the coming years in line with the estimated grade profile of gold and copper,” he said.

“We also have significant copper potential at Red Chris, Havieron, Wafi-Golpu and Namosi.

I have always seen copper as an excellent complement to our gold portfolio as it provides us with good earnings diversification and makes us more resilient and profitable in the longer term.

Both gold and copper are metals of the future, with copper, in particular, being key to a low carbon world. It is a very exciting time at Newcrest as we progress our multitude of organic growth options.”

 

Reference: Post-Courier (6 October 2021). “Newcrest Records K351b Profit”. 



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PNG Business News - September 06, 2021

Newcrest Posts K4.07B Profit

Newcrest Mining, Papua New Guinea's largest gold miner, has posted a profit of K4.07 billion (US$1.164 billion) for the 12 months ending 30 June, a new high. Due to greater gold and copper prices as well as decreased operating costs, this is 55 per cent higher than the previous financial year. Newcrest's gold revenue increased by 9% despite somewhat lower gold production, while its copper revenue increased by 46% and its silver revenue increased by 63%. However, its operating costs decreased by 11%. “Newcrest has delivered a strong operational and financial performance for the 2021 financial year, producing 2.1 million ounces of gold at an AISC [All-In Sustaining Cost] of US$911 per ounce. “Together with the benefit of higher gold and copper prices, this translated into a record statutory and underlying profit of US$1.2 billion and a record free cash flow of US$1.1 billion,’ said Newcrest’s Managing Director and Chief Executive Officer, Sandeep Biswas.  The company's shareholders will benefit from the windfall, with a payout per share of US$0.40 (K1.40) — a 129 per cent increase over last year's dividend. During this time, Newcrest's gold mine on Lihir Island in New Ireland Province produced 737,000 ounces of gold and 38,000 ounces of silver, accounting for about 35% of the PNGX and ASX-listed company's global production for the year. The mine brought in US$1.425 billion (K5.02 billion) in sales, accounting for around 31% of the company's total revenue for the year. While the firm claims incidences of COVID-19 on Lihir Island are at "low levels," it is maintaining "extensive contact tracing and isolation protocols," and charter flights to the island are limited.   Reference: Pacific Mining Watch (31 August 2021). “Newcrest Records K4.07 Billion in Profit”.


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PNG Business News - October 26, 2021

Australia buys Digicel, PNG’s mobile monopoly

Photo credit: Devpolicy by Stephen Howes Yesterday, Telstra announced that it was buying Digicel Pacific. Telstra itself is only paying $270 million, and the Australian government $1.33 billion. Yet, Telstra is obtaining 100% ownership. The deal is certainly an attractive one for Telstra. But does it make sense for Australia, and for the Pacific? Digicel has had a transformational impact in the Pacific, but now has too much market power. As the Telstra release explains, it holds the dominant position in all the Pacific countries in which it operates, except for Fiji, where it is in second place. In Papua New Guinea, which I know best, and which is by far Digicel's biggest market, the company  has a 92% share of the mobile phone market. That makes Digicel effectively a monopoly in PNG. And that is why it is so profitable: like any monopolist, it exploits its market power. Australian and PNG researchers have been tracking mobile internet prices in PNG since Australia gifted it a new underwater cable . Their conclusion is that since the completion of that cable in December 2019 to today there has been no decrease in mobile internet prices. The reason is simple: the lack of retail competition. Michelle Nayahamui Rooney, Martin Davies and I last year exposed Digicel PNG’s predatory loan scheme. Digicel lends phone credit to its customers. They pay it back when they next top up. Our estimate is that Digicel made a 17% return from such loans every week, which is equivalent to an unbelievable 351200% a year. Is this really the way in which Australia want to engages in the Pacific – owning an enterprise that keeps prices high for consumers, and rips them off when they are desperate to make a call? Any monopolist is necessarily engaged in a battle between the consumer and their profits. At some point, Telstra will end up going toe-to-toe with the PNG telecom regulator, NICTA, as Digicel has done several times. It’s going to be awkward for both Telstra and the Australian government. Many will welcome the investment as a sign of Australian commitment to the Pacific. However, if we want to invest in the telecom sector in the Pacific, we should be backing alternatives to Digicel, to push prices down and improve services, not buying out the dominant player. Amalgamated Telecom Holdings based in Fiji is the Pacific’s second biggest telecom provider. It is currently planning to enter the PNG mobile market with support from the Asian Development Bank. This is the sort of investment we should be financing. That Australia has bought Digicel shows the extent to which the Pacific is now viewed through a China lens. That’s unfortunate. China is a massive economic power. Its companies will have increasing stakes in economies around the world. That is a fact we have to accept. The Australian government also needs to decide if its only goal is to counter China or if it is still seeks to promote Pacific development. When I was AusAID's Chief Economist, Digicel was the new kid on the block in the Pacific, and it was successfully challenging state-owned telcos that until then had been dominant. In 2006, in Foreign Minister Alexander Downer's flagship Pacific 2020 report, we wrote glowingly about the competition that various Pacific countries had recently started allowing in the mobile phone sector. Our analysis was right then, and remains relevant today. Yet here we are, in 2021, doing the opposite: rather than supporting greater competition in the telecom sector, subsidising the purchase of the incumbent monopolist. The decision to buy Digicel Pacific should be reversed. If it is too late for that, the Australian government should at least – in return for all its cheap and risk-reducing finance – oblige Telstra to operate Digicel for the benefit of the people of the Pacific rather than solely for its shareholders through an agreement that makes it clear that the Australian company is not only expected to return the cheap loan it has been given, but also reduce prices, and end rip-offs.   This article appeared first on Devpolicy Blog (devpolicy.org), from the Development Policy Centre at The Australian National University. Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School.

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PNG Business News - October 26, 2021

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Business

PNG Business News - October 26, 2021

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