RE: AFR article18 Feb 2022 18:46
Mr Biswas told investors he was determined to drive cultural change at the gold miner, after apologising earlier this week to anyone who felt bullied during their time at Newcrest and conceding that his leadership style had to change for Newcrest to achieve its potential.
Management of “people” had a 5 per cent weighting on Mr Biswas’ short-term incentive payment in fiscal 2021 and the Newcrest remuneration committee felt his performance on that metric was below target in the year.
Mr Biswas said he would not be surprised to see “people” take on a bigger weighting in future remuneration outcomes.
“I would expect to see more emphasis going forward on culture, particularly in the personal metrics because some of these things are particular to the individual,” he said.
The lower profit reported by Newcrest on Thursday was mostly driven by weaker production; gold and copper output was 20 per cent and 27 per cent lower than the prior period respectively.
The weaker production reflects both the ageing nature of Newcrest’s flagship Cadia mine but also the fact the mine was disrupted while an important piece of machinery underwent maintenance.
The weaker production combined with higher labour and transport costs to ensure Newcrest’s unit costs of production were 23 per cent higher than the prior period.
The cost of managing the pandemic has also surged, with Newcrest now expecting to spend between $US50 million and $US60 million in the year to June, rather than its original forecast for spending to be between $US35 million and $US45 million.
The majority of the higher pandemic costs relate to the Lihir mine in Papua New Guinea.
Mr Biswas said Lihir was now managing COVID-19 as if it were in an endemic stage, rather than a pandemic stage, which means the company will only isolate symptomatic people.
The extra pandemic costs come after the company spent $US53 million on similar measures in the year to June 2021.
Mr Biswas said it was “unlikely” that Newcrest would be awarded a special mining licence for the long-stalled Wafi-Golpu copper and gold project in Papua New Guinea before parliamentary elections are held in the developing nation in June.
Despite the low expectations, Mr Biswas said there had been a revival in talks with the PNG government in the past few weeks.
Gold prices have rallied over the past three weeks on the threat of war in Ukraine, with the yellow metal fetching $US1879 per ounce on Thursday.
Mr Biswas said he was surprised that gold prices had not rallied sooner given the stimulus packages announced by governments over the past two years, and he said the looming era of inflation should be good for gold prices.
Sign In
Follow the stocks
