Newcrest says record loss not leading to mass job cuts in PNG | Pacific Beat

Newcrest says record loss not leading to mass job cuts in PNG

Newcrest says record loss not leading to mass job cuts in PNG

Updated 13 August 2013, 16:48 AEST

Australia's biggest mining company, Newcrest, has reported a record loss of $5.

8 billion dollars.

More than half of the asset write down behind that loss took place in Papua New Guinea, a country of just 7 million people that is much more dependent on mining than Australia.

Three thousand nine hundred jobs will be lost to company staff and contractors before the end of next year and Managing Director, Greg Robinson, has warned more jobs could go if conditions require it.

Newcrest's PNG Country Manager, Peter Aitsi, says job losses in PNG, particularly at the Lihir mine, have not been as bad as most people think.

Presenter: Jemima Garrett

Speaker: Newcrest's PNG Country Manager, Peter Aitsi

AITSI: In terms of Lihir there are 150 positions affected as a result of the changes so that is what we are dealing with at the moment and those changes are now in place and our focus is really in having Lihir ramp up its production and allowing the simplified operations to start to deliver the kind of results that are expecting.

GARRETT: The final figure for the write down came in at over $6billion. That was higher than had been forecast. What are you looking at in terms of the total number of jobs lost in paua New Guinea?

AITSI: Look, I think those numbers have been communicated already in June and you know our anticipation is that the changes are now in place in Lihir and the focus is now on maximising the output there. You know the plant has had a considerable amount of money put into it over the years, sorry since our acquisition, and that is really the challenge for us is to make sure that the plant is allowed to function at its maximum capacity.

GARRETT: Resources provide the PNG government's major income stream. Just what sort of drop in revenue will the PNG government suffer?

AITSI: Look the treasurer has put out an update, and at this stage, although they have indicated some impact in terms of low commodity prices, not only gold but also copper, he is fairly upbeat saying in other areas of their tax collection they have been able to make some ground. So from a PNG point of view i think he has indicated that if anything there will be an impact of around 70 million Kina based on their forecasts.

GARRETT: So 35 million Australian dollars?

AITSI: That is correct. That is in relation to the expected tax collection from the government's internal revenue commission. So at this stage he is fairly buoyant about the PNG economy but, obviously from our point of view, we just need to ensure we continue to work with the government to work through this current commodity cycle.

GARRETT: Just how much of a drop in revenue has the PNG government seen from Newcrest?

AITSI: Look those figures I am not wanting to sort of make any specific numbers as such, but they will come out in the fullness of time, as we declare our contributions to PNG through the course of this year but we are still very much committed to Lihir and you still see that in the kind of announcements that have been made in relation to the ongoing investments into the plant.

GARRETT: Papua New Guinea's Prime minister, Peter O'Neill expressed concern about the impact of Newcrests woes on the PNG economy and you held talks with him. What came out of the talks?

AITSI: Our CEO, Greg Robinson, wrote a letter to the Prime Minister just providing him with an update and we continue to meet with key government ministers and the relative agencies that are responsible for our industry keeping them updated of our activities. Look, in essence, Newcrest is not looking for any special treatment here but what we want to do is just to ensure that the government fully understands the actions that we have taken and the kind of global market that we are operating in and just to ensure that we are able to be provided a stable, and in a sense, predictable operating environment that can see us continue to make the kind if investment decisions that we need to.

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