The year to end-June 2012 was one of significant investment in growth for Newcrest, with total capital expenditure in the year of A$2,556 million. Significant progress was made on advancing the company’s two major growth projects: as at June 30, 2012 the $1.3 billion Lihir Million Ounce Plant Upgrade (MOPU) was approximately 91% complete and the A$1.9 billion Cadia East project was approximately 80% complete.
The company stated that the successful delivery of these two projects “underpins Newcrest’s future production growth profile” and that “both projects remain on schedule for completion (Lihir MOPU) and first commercial production (Cadia East) in the December 2012 quarter.” In addition, the Wafi-Golpu pre-feasibility study in PNG is nearing completion and, subject to joint venture partner approval, an updated ore reserve estimate is likely to be provided on 29 August 2012.
Interestingly, the company detailed that corporate administration costs of A$140 million were A$47 million higher than the prior year and stated that a key driver of this increase was “higher expenditure on innovation and technology targeting the future generation of significant step change improvements in production.” The company also highlighted centralisation of operational control areas into designated hubs, an elevated spend on safety and health initiatives including major hazard management and higher IT system support costs following the investment in standard systems across the business, and increased investment in training and the group graduate programme.
