Cash-rich miner OZ mulling its future

By Sarah-Jane Tasker


OZ Minerals is sitting on $1 billion in cash as it decides how to move forward, and is determined not to repeat past mistakes that forced it to sell most of its assets to China.

New chief executive Terry Burgess said OZ Minerals, which escaped being placed into administration when it sold the bulk of its assets to China Minmetals, was developing a strategy over the next few months that would take the company forward.

He said decisions would be made about what commodities and regions to operate in, The Australian reports.

Its only current assets are the Prominent Hill copper-gold mine in South Australia and exploration ground in Cambodia.
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"What we have is a new company in a very unusual position in as much as there is a project that has recently gone through commissioning and is progressing well, but there is no debt and we have $1bn of cash we have to ensure we spend in the most prudent way," he said.

"Importantly for us, we want to make sure we make the right decisions.

"We don't want to make any repeat mistakes made by us or anybody in the past."

Mr Burgess made the comments as the Melbourne-based miner reported a net loss in the first half of fiscal 2009 of $585.6 million, compared to a loss of $500,000 a year earlier.

OZ said the first-half result was affected by lower commodity prices and a one-off loss of $553.9m on the sale of assets to Minmetals.

Revenue was $854.5m, compared with $529.3m in the first half of fiscal 2008, while revenue from its only surviving operation from the asset sale was $89.6m.

The miner had a cash balance at June 30 of $1bn and debt in the form of convertible bonds with a face value of $US105m ($127m).