Minmetals Resources Limited 2011 Sustainability Report (PDF)

Our approachWe aim to grow and develop our upstream, diversifiedbase metals operations through exploration and discovery,organic growth and acquisition. Our growth strategy aimsto meet the following objectives:» Commit to leading practices in corporate governance,production standards, safety, operational excellence andenvironmental protection;» Continue strong commitment to local economies andcommunities to support our social licence to operateensuring that local economies continue to receivetangible benefits from our operations;» Continue to leverage on the expertise and experienceof China Minmetals Corporation;» Pursue available organic growth opportunities throughour project pipeline and exploration strategy; and» Target value-focused acquisitions.Minmetals Resources Limited, the entity listed on the HongKong Stock Exchange (HKSE) that operates the MMG assets,reported its financial performance for the full year 2011with total net profit after tax attributable to equity holdersof US$540.9 million, up 32% from the full year 2010, asshown in the table below.Performance2011 financial results for Minmetals Resources LimitedFinancial Highlights (US$ million) 2011 2010 %Continuing operations:Revenue 2,228.3 1,919.9 16%EBITDA 1,063.8 820.9 30%Operating profit (EBIT) 755.3 521.3 45%Net profit after tax attributable to:Equity holders of the Company Capacity buildingCapacity building540.9 409.4 32%CompensationNon-controlling Compensation interests 33.6 21.0 60%Profit Donations attributable to equity holders of the Company:SponsorshipsEducation and trainingLocal business development initiativesCommunity development initiativesThis result was driven by significant one-off benefits,including the gain realised on the investment inEquinox Minerals Limited (“Equinox”) and the saleof non-core assets.Earnings Before Interest and Tax (EBIT) from continuingoperations was US$755.3 million, up 45% from the fullyear 2010. Underlying Earnings Before Interest, Taxes,Depreciation and Amortisation (EBITDA) for the company’scontinuing operations, excluding one-off items, wereUS$887.8 million, a 2.2% decrease on 2010.Operating costs remain a focus across our business withindustry-wide cost pressures remaining evident. Costmanagement will remain a challenge and focus for theBoard and management in 2012.The majority of the company’s revenue was receivedfrom sales of copper and zinc, accounting for 82%of sales revenue.Our largest customer, by revenue, continues to beAustralia, followed by Asia (namely Thailand and Vietnam,with sales of copper cathode from Sepon), as shown inthe chart below. Sales to China continue to account forapproximately 24% of our revenue. Of this, approximately6% of sales were to MMR’s ultimate majority shareholderChina Minmetals Corporation, on arms-length agreementswith commercial terms.Continuing operations 454.1 335.8 35%Discontinued operationsLocal business development86.8initiatives73.6 18%Earnings per share – fully dilutedContinuing operations 8.99 cents 7.41 cents 21%Discontinued operations 1.72 cents 1.63 cents 6%Total earnings per share 10.71 cents 9.04 cents 18%2011 REVENUE BY METALSILVER5%GOLD8%LEAD5%COPPER40%ZINC42%DonationsSponsorshipsEducation and trainingCommunity development initiatives2011 REVENUE BY destinationOTHER ASIA29%CHINA24%JAPAN AND KOREA2%AUSTRALIA34%EUROPE11%SUSTAINING OUR ECONOMIC PERFORMANCE RESPECTING OUR ENVIRONMENT WORKING WITH OUR STAKEHOLDERS HEALTH AND SAFETY OUR PEOPLE67