The introduction of Company-wide safety management standards and beliefs, as well as a self evaluation and audit process, were important developments in Pasminco’s continuing drive to ensure the Company achieves its goal of providing a safe and healthy work environment and achieving an incident free workplace. This work has significantly raised the awareness of safety issues across the Group and greatly assisted in identifying areas that require attention. Further work is required at all sites to reinforce and implement agreed safety behaviours as an integral part of the Company’s operations.
The past year has been one of the most eventful in Pasminco’s brief history. Record production levels were achieved; the Company returned to profitability with a strong turn-around in performance and the Century Mine was succesfully commissioned.
Pasminco recorded a profit after tax and abnormal items of $23.4 million for the 2000 year. This included an abnormal loss of $11.6 million relating to the impact of the change in Australia’s corporate tax rate from 36% to 30%. This represents an increase of $31.7 million from 1999`s result, which was an $8.3 million loss. There were no abnormal items in 1999. After considering Pasminco`s results for the year, Directors have decided not to declare a final dividend in respect of the 2000 year.
Results were significantly impacted by a higher price for zinc and the stronger Australian dollar/Dutch guilder exchange rate offset by a lower lead price. Benefits were also gained from tax credits arising from start up of the Century mine. The Australian/US dollar exchange rate was virtually unchanged year on year.
Higher production and sales volumes were achieved, including record production levels at the Hobart, Port Pirie and Clarksville smelters, and costs were lower overall. However, the favourable impact of higher volumes and lower costs was partly offset by lower sales premiums, mainly on lead sales into Asia.
Unfortunately, the Pasminco share price remains depressed along with other Australian companies in the resources sector. The Company is the target of unresolved litigation related to the environmental performance of the Port Pirie and Cockle Creek smelters, which has also impacted the share price. As a result of the capital investment programs improving performance at major sites, the commissioning of Century, as well as improvements in metal prices and market conditions, the business is in a sound condition and the outlook more certain. The Company recognises the need to deliver consistently higher levels of profitability to provide an adequate return to shareholders.
The commissioning of Pasminco Century Mine and the shipment of concentrates from the port facility at Karumba marks the end of an outstanding development project and the beginning of the next phase in the Company’s growth. With Century, Pasminco has secured a long term resource base. It was completed ahead of schedule and $100 million under budget. The 304 km pipeline to Karumba operates effectively and the storage shed and port facility are fully operational.
The final stages of a project of this scale can be the most difficult and the result is a credit to the determination and attention to detail of the many employees, on site contractors, Local State and Federal Government officers, local communities and the many others who contributed to the project.
In the short term, the Century financing costs may overshadow strong operating performance at our other sites. However, as the year progresses, the earnings and cash generated by Century will deliver a strongly improved result during the current year.
Allied to the commissioning of Century was the work at Budel to meet Dutch Government regulations which required Pasminco to cease production of jarosite by 30 June 2000. The project was completed successfully. This ensures the long term viability of the smelter as a processor of Century concentrates and significantly improves environmental performance.
Access to the deep northern areas of the Rosebery mine was improved with the commissioning of the Northern Upcast Ventilation project. At Cockle Creek, new tail gas scrubbing equipment was installed to reduce sulphur dioxide emissions. These projects were highlights at each site, where efforts were focused on maximising benefits and improving production resulting from capital investment in previous years.
Pasminco’s market distribution system in Asia met improved demand for metal across the region. Demand in Europe continued to be strong while continuing economic growth in the United States kept demand high. Demand for Pasminco zinc and lead in key markets is expected to continue to grow during the current financial year.
During the year, the Company’s organisational structure was reviewed and its’ divisional structure re-inforced to ensure that the full benefits of the integrated business systems project are achieved. The new systems will enable Pasminco to rationalise activities across the Group and provide the opportunity to take advantage of electronic commerce and business to business opportunities.
This time last year, Pasminco people across the world were in the final stages of preparations for the Year 2000 transition. It is pleasing to report that the event passed without any impact on operations. The Company recognises the dedication and hard work of many individuals who ensured a smooth entry to 2000.
A strategic approach for working with indigenous communities was launched during the year. This provides the blueprint for the Company’s relationships with indigenous communities whereever it operates across the world. Pasminco was very pleased to be the first Australian company to pledge support to Corroboree 2000 in Sydney and remains committed to the process of reconciliation.
Environmental performance remained a critical aspect of Pasminco operations with progress being made on the Environmental Management System, greenhouse issues and the production of the second annual Pasminco Environment Report. Following the Company’s announcement last year to cease mining operations at Broken Hill in 2006 when the orebody is exhausted, considerable work has been undertaken within the local community and with State and Federal Governments, to assist in the development of plans to ensure a smooth transition for the town as closure approaches.
A great deal of market and public attention has been given to the litigation relating to the smelters at Cockle Creek and Port Pirie. The Company remains committed to the view that a class action is not the appropriate way to address individual matters. Individuals who have any concern about Pasminco operations are encouraged to contact the company directly. Shareholders will be informed of significant developments in the case, and news and information is available either directly from Pasminco or the Company web site.
The external environment remains favourable for Pasminco. Zinc and lead stocks declining and prices currently trading above the average levels achieved over the 1999 year. With strong performances at each site and the increasing contribution from Century, the company expects to look forward to a period of improved financial results in the year ahead.
Once again, Pasminco employees were challenged daily to improve the business. The Board and executive are grateful for the dedication and commitment from every person to improve on last year’s performance, build a strong future and embrace Pasminco’s vision of being the best from mine to market through performance, quality and respect.
Mark Rayner
Chairman
David Stewart
Managing Director and Chief Executive
Click here to download PDF files of:
- 2000 Pasminco Annual Report indexable pdf (4.8Mb)
- Notice of Annual General Meeting 2000 (96Kb)
- Financial Summary (110Kb)
- Operations at a Glance (19Kb)
(excerpt from Annual Report 2000)
- Production 5-Year Summary (13Kb)
(excerpt from Annual Report 2000)
- Performance 10-Year Summary (10Kb)
(excerpt from Annual Report 2000)
The financial information presented on this web site represents extracts from the audited financial report of Pasminco Limited for the financial year ended 30 June 2000 issued on 22 September 2000. These extracts cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the entity as a reading of the complete financial report.
The complete financial report, and the audit report thereon, can be obtained, free of charge, on request to the entity
annualreport@Pasminco.com.au
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