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Mining industry

Ok Tedi Mine Posts Record Profit Amid Environmental Concerns

Strategic Insights

— 1 min read

The Ok Tedi mine in Papua New Guinea's Star Mountains has had a boom year, with a profit of $250.9 million on sales of $1.02 billion. The mine, owned and operated by Ok Tedi Mining Ltd, is 60% owned by BHP. Despite environmental controversies, the mine has been a significant money spinner for its owners. The profit is reflected in the company's operating profit before tax, which was $389 million, against which tax was $138 million. Preferred dividends on redeemable preference certificates paid during the year totaled $149.2 million, and cash held at the year end was $201 million.

Key Takeaways:

  • The Ok Tedi mine has achieved a record profit of $250.9 million for the year to 31 May.
  • Sales for the year reached $1.02 billion, with an operating profit before tax of $389 million.
  • Tax paid for the year was $138 million, and preferred dividends on redeemable preference certificates totaled $149.2 million.
  • A $15.22 million provision for "compensation" has been charged to profits in the May year.
  • The mine is 60% owned by BHP and has been a significant money spinner for the company.
  • The Ok Tedi mine is currently involved in a $4 billion environmental damages action launched by Slater & Gordon on behalf of 30,000 PNG villagers and landowners.
  • BHP has signed a $110 million compensation agreement with the PNG Government, which will be distributed to villagers over the lifetime of the mine.

Statistics:

  • Profit for the year: $250.9 million
  • Sales for the year: $1.02 billion
  • Operating profit before tax: $389 million
  • Tax paid: $138 million
  • Preferred dividends on redeemable preference certificates: $149.2 million
  • Cash held at the year end: $201 million
  • Provision for "compensation": $15.22 million

Sources:

  • BHP's annual report for the May year
  • Ok Tedi Mining Ltd's annual accounts for the May year
  • "BHP and OTML in $4 billion damages action" article by the Melbourne lawyers Slater & Gordon
  • Compensation agreement between BHP and the PNG Government

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