 |
November 27, 2007 |
|
|
|
 |
ZINIFEX: Sees Lower Operating Profit for 2008 Due to High Costs Zinifex Limited (ZFX) said that lower zinc prices, a stronger Australian dollar and higher costs are expected to result in a lower operating profit for FY08, Egoli News notes. According to the report, Zinifex said that cost pressures continue, with high commodity prices and shortages of skilled mining personnel and supplies expected to increase operating costs by 10% from last year. Egoli says that Zinifex's acting chief executive officer, Tony Barnes, said during the company's annual general meeting that it would not be reasonable to expect a repeat of the record operating profit in 2006. “However, if prices and exchange rates continue at today's level our net profit should exceed that of last year when we take into account the profit earned on the sale of our shares in Nyrstar,” Mr. Barnes advised. Zinifex, in conjunction with its joint venture partner, Belgium's Umicore, recorded a gain of AU$1.6 billion on completion of the initial public offering of its smelting business, Nyrstar, on the Euronext, Egoli points out. In spite of rising costs, Mr. Barnes advised, production was ahead compared to the same period last year. The company reported that zinc output from its Century mine was 16% higher following a quarter of production without any stoppages, the report notes. Egoli cites Chairman Peter Mansell as saying that although the company's revenues are currently generated in Australia, Zinifex would look overseas for future opportunities. He said that while they have ruled out some places where the country risk is too great, they believe that opportunities still exist in northern Canada and Alaska, Europe, parts of Africa, China, Mexico and parts of South America. Egoli recounts that the company reported it would spend approximately AU$100 million in 2007 on exploration and development, a three-fold increase over last year's result. The group also said it planned to invest around AU$500 million into the business next year, with the largest budget item being the overburden removal at its flagship Century zinc mine. About Zinifex Zinifex Limited, one of the world's largest integrated zinc and lead companies -- http://www.zinifex.com/ -- is headquartered in Melbourne, Australia. The company owns and operates two mines and four smelters. The mines and two of the smelters are located in Australia and supply the growing industrial markets of the Asian-Pacific region, including China. The company also has a zinc smelter in the Netherlands and the United States. The company sells a range of zinc metal, lead metal, and associated alloys in 20 countries. More than 80% of the company's products are distributed outside Australia, particularly in Asia, which is experiencing significant growth in construction activity and vehicle production. Zinc is used for steel galvanizing and die-casting and lead for lead acid batteries used mainly in cars and other vehicles. On March 21, 2007, Fitch Ratings affirmed Zinifex Limited's 'BB+' Issuer Default rating with a Stable Outlook, following its offer to buy Wolfden Resources Inc for approximately CDN$360 million (approximately AU$385m). Wolfden's board has unanimously recommended that shareholders accept Zinifex's offer. |
|
|
||
|
Today's Top Stories have been selected from the Troubled Company Reporter - Asia Pacific. To receive the Full TCR-AP please CLICK HERE.
