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Oz Minerals profits double, taking full advantage of robust copper prices

Mon 21 Feb 22, 3:07pm (AEST)
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Key Points

  • Oz Minerals copper and gold production was in-line with 2021 guidance
  • Expect a slow start to 2022 production due to extreme rain events in South Australia
  • In 2021, copper prices averaged US$9,318 a tonne, up 51% compared to the 2020 average

Operational excellence and higher commodity prices has helped Oz Minerals (ASX: OZL) deliver an upbeat financial performance for the year ended 31 December. 

Financials at a glance 

  • Record revenue of $2.1bn, up 56%

  • Operating margin of 55% compared to 45% a year ago

  • Net profit of $531m, up 150% 

The net profit figure was slightly below Bloomberg estimates of $548m and Bell Potter forecasts of $541m. 

“Higher production volumes, with Carrapateena now fully contributing and gold stockpiles complementing Prominent Hill production, combined with effective cost control, allowed us to take full advantage of robust copper prices during the year,” said Managing Director and CEO Andrew Cole. 

In 2021, copper prices averaged US$9,318 a tonne, up 51% compared to the 2020 average. 

2022 guidance

For the year ahead, Oz Minerals expects to deliver: 

  • Copper production: 127,000 - 149,000 tonnes (versus FY21: 125,486) 

  • Copper costs: US$85-95/lb 

  • Gold production: 208,000 - 230,000 oz (versus FY21: 237,263)

  • All-in sustaining costs: US$135-155 lb 

Oz Minerals said that the industry is experiencing a general uplift in costs, attributable to inflationary increases in consumable costs, freight charges and higher royalty payments.

Copper prices outlook

The Australian Government's commodity forecaster, the Office of the Chief Economist, expects higher copper prices to be supported in 2022 through the continued economic recovery and growing use of copper in low-emissions technology.

Prices are forecast to ease to US$8,500/t by 2023 as new mines and additional supply comes online.

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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