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2016 revenue and earnings up on strong Las Bambas ramp-up

Full year 2016 highlights:

  • Revenue up 28% to US$2,489 million and EBITDA up 126% to US$949 million, driven by a six month contribution from Las Bambas after commercial production was achieved on 1 July 2016.
  • Las Bambas ramp-up was ahead of schedule, with 330,227 tonnes of copper in copper concentrate produced in 2016, against guidance of 250,000 to 300,000 tonnes. 
  • Las Bambas revenue of US$1,224 million and EBITDA of US$655.0 million in 2H2016.
  • Total copper sales volumes were 139% higher than 2015 due to Las Bambas and continued strong production at Kinsevere. Zinc sales volumes were 71% lower than 2015 due to Century processing final ore at the start of 2016.
  • A focus on operating efficiencies and cost reductions drove operating costs 17%, or US$58 million, lower for the Australian operations compared with 2015. 
  • Excluding write-downs of low grade stockpiled ore at Sepon (US$52 million) and Kinsevere (US$35 million), there was a significant reduction in cash operating expenses and solid productivity gains.
  • Net loss (after tax) of US$98.7 million, including a one-off write-down of deferred tax assets of US$63 million in the current year and write-downs of low grade stockpiled ore. 
  • Profit Before Tax US$65.8 million in 2H2016, compared to Loss Before Tax of US$114.1 million in 1H2016.
  • Net operating cash flow of US$722.3 million, including US$664.6 million generated in 2H2016.
  • A successful Rights Issue of US$511 million was approximately six times oversubscribed.  The proceeds have and will be used to pay down debt facilities and partially fund the Dugald River project.
  • Dugald River zinc project is on track for first production in 1H2018.  At an estimated annual production rate of 170,000 tonnes, this will be a world top 10 zinc mine at a time of declining global supply.
  • Portfolio optimisation – transactions for the sale of Golden Grove for US$210 million and for Century assets and infrastructure were completed on 28 February 2017.

Year ended 31 December

US$ million

US$ million

change %










Loss after tax



EBITDA margin

Net cash generated from operating activities



Dividend per share

Basic and diluted loss per share

(US 2.5 cents)

(US 17.0 cents)

Commentary from Jerry Jiao, Chief Executive Officer:

“The outstanding ramp-up and commencement of commercial production at Las Bambas in July 2016 was a key driver of a solid 2016 production performance and financial results.

“Across all operations we continued to focus on extracting more value from our assets through efficiencies and reductions in corporate and site costs.


“Safety underpins our culture and remains our most important value. While we made significant progress in reducing our Total Recordable Injury Frequency Rate (TRIF) in 2016, two of our colleagues tragically lost their lives in separate accidents at Las Bambas. In July Felipe Leon Chavez, who was employed through our logistics contractor Transaltisa died following a road incident in Peru’s Cotabambas province. In December Henri Aldana Chanca who was employed through our contractor Serpetbol was fatally injured by an uncontrolled release of water under pressure while working in the tailings thickener area of the concentrator plant.

“MMG operations ended 2016 with a TRIF of 1.90 for the full year which represents an average 9.6% year-on-year reduction in injury rates since the end of 2012. The Lost Time Injury Frequency was 0.52 for the full year 2016.  This result is encouraging however, we will continue with our resolve to make our workplaces safer.

Financial performance and production

“Revenue for 2016 was up 28% to US$2,489 million and EBITDA up 126% to US$949 million, driven by a six month contribution from Las Bambas.

“While market conditions continued to be challenging, the price of our key commodities copper and zinc began to show signs of improvement toward the end of 2016. Throughout the year we continued to focus on improving efficiency and reducing costs across the organisation. This enabled us to achieve a 17% reduction ($US58 million) in operating costs in Australian operations.

“We produced a Profit Before Tax of US$65.8 million and operating cash flows of US$664.6 million in the second half of 2016.

“We produced 503,510 tonnes of copper in 2016, exceeding our guidance range of 415,000-477,000 tonnes. Las Bambas contributed to the outstanding copper result by producing 330,227 tonnes of copper in copper concentrate for the full year 2016, representing two consecutive quarters of production above design capacity. In addition to Las Bambas, our Kinsevere operation delivered its third consecutive annual production record by producing 80,650 tonnes of copper cathode.

“2017 annual guidance for the Group is 560,000-615,000 tonnes of copper and 65,000-72,000 tonnes of zinc.


“In these first results I present as CEO, I acknowledge the strong operating base and business discipline established by Andrew Michelmore and his team.

“With Las Bambas performing well and Dugald River likely to be producing in early 2018, we are delivering growth.

“We remain committed to our strategy of growing our business organically, and through acquisitions, toward our objective of being valued as one of the world’s top mid-tier miners by 2020.”