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Oz Minerals hopes to strike BHP rail deal

 

Oz Minerals hopes to team up with mining giant BHP Billiton to build a rail line to service its assets in South Australia.

The copper and gold miner, which has returned to profit thanks to improved production at its Prominent Hill mine, says the South Australian government should involve BHP in any joint venture talks on the rail proposal.

Oz Minerals is undertaking a pre-feasibility study into building a rail line between its Carrapateena and Prominent Hill projects and evaluating the potential of a third party to become involved to reduce costs.

The study is expected to be completed this year.

Chief executive Andrew Cole said it would make sense to talk to Oz Minerals' largest neighbour, BHP Billiton which has operations at nearby Olympic Dam.

"If BHP was to come into this in some way, shape or form in the future then that would be beneficial," Mr Cole told reporters in a teleconference on Wednesday.

"We're seeing if it stands on its own two feet."

Oz Minerals recently agreed to work with the South Australian government on the rail plan.

"You'd be silly if you're the South Australian government not to think `let's see if we can talk to BHP as well'. I can't say whether that's happened or not," he said.

Oz Minerals currently has a power supply agreement with BHP Billiton's substation near Roxby Downs.

The company has also relocated its corporate office from Melbourne to Adelaide as part of a $10 million deal with the South Australian government.

On Wednesday it reported a $48.5 million full year profit, compared to a $294.4 million annual loss the previous year.

Improved efficiencies in the open pit at Prominent Hill had delivered higher-than-expected material movement and copper production.

But the company did not declare a final dividend and said it's temporarily suspended plans to sell an interest in its key Carrapateena copper and gold growth project.

Mr Cole said Oz Minerals had decided to put plans for the Carrapateena joint venture on hold to maximise the medium-to long-term value of its copper assets as it evaluated all other options.

The company said the strategic review was still underway and the dividend policy would be assessed by the board after its completion.

OZ MINERALS TURNS LOSS INTO PROFIT

* Net profit of $41.6m, up from a loss of $294.4m in 2013

* Revenue of $831m, up 29 per cent from $644m

* No dividend. (Interim dividend of 10 cents was paid in September 2014).