Annual Report 2012

24 Apr 2013
All figures in accordance with IFRS and in United States Dollars, unless otherwise stated

Consmin, a leading manganese ore producer with mining operations in Australia and Ghana, announces its annual results for the year ended 31 December 2012.

Key highlights

  • During 2012, prices for benchmark manganese lump CIF China 45.5% grade material began at $4.75/dmtu before recovering to $5.35/dmtu in July 2012, remaining at this level during Q3 before declining to $5.20/ dmtu from October for the remainder of the year. The benchmark price began 2013 at $5.30/dmtu for January shipments and gradually increased to $5.90/dmtu for April shipments.
  • Manganese sales tonnes were down 15% in 2012, primarily as a result of lower sales of Ghana ore due to weakness in the EMM market and lower Australian sales due to increased sales of chromite ore. In conjunction with lower prices achieved this resulted in revenue decreasing by 22% from 2011.
  • In line with the mine plans, Ghana manganese ore production in tonnes decreased 13% as a result of the stripping programme during Q4 2012. Australian manganese ore production increased 2% compared to 2011. Overall, total manganese ore produced in 2012 was 6% lower in tonnes compared to 2011.
  • Manganese C1 cash costs improved from $3.60/dmtu in 2011 to $3.28/dmtu in 2012. The C1 cash costs had shown a continuing quarter on quarter reduction from a peak of $3.78 in Q2 2011 to $2.93 in Q3 2012. C1 costs however increased in Q4 2012 to $4.37 largely as a result of the stripping programme in Ghana.
  • Total Australian resources have increased 22% and reserves have increased 8% compared to the June 2011 resources and reserves statement. Total Ghanaian resources have increased 9%; however reserves have decreased 11% compared to the June 2011 resources and reserves statement.
  • Significant long term sales offtake agreement with China’s leading EMM producer for a significant proportion of Ghana production.
  • The Group recorded a loss for the year of $44.2 million driven in part by a non-cash impairment expense of $16.2 million, primarily related to the nickel business.

Key Performance Indicators

  Year Ended
  31 December 2012 31 December 2011 % change
Manganese ore produced (dry kt) 2,971.5 3,165.8 (6.1 %)
Manganese ore sales (dry kt) 2,943.1 3,475.1 (15.3%)
Average C1 manganese unit cash cost ($/dmtu)¹ 3.28 3.60 (8.9%)
Average manganese FOB Sales price ($/dmtu) 4.23 4.98 (15.1%)
Chromite ore produced (kt) 452.3 323.8 39.7%
Chromite sales (kt) 483.1 289.0 67.2%
Average C1 chromite unit cash cost ($/t)¹ 205 233 (12.0%)
Average chromite FOB sales price ($/t) 217 247 (12.1%)
Revenue ($ million) 554.1 706.6 (21.6%)
Adjusted EBITDA ($ million)² 14.1 126.7 (88.9%)
‘Cash’ EBITDA ($ million)4 77.7 167.5 (53.6%)
Loss for the period (44.2) (491.3) (91.0%)


  At 31 December 2012 31 December 2011 % change
Cash and cash equivalents ($ million) 86.3 155.2 (44.4%)
Gross debt ($ million) (385.6) (417.4) (7.6%)
Gross debt excluding high yield bonds ($ million) (31.0) (44.0) (29.5%)
Net debt/(cash) ($ million) (299.3) (262.2) 14.1%
  1. 1Average C1 manganese or chromite unit cash cost represents the cash cost incurred at each processing stage from mining through to shiploading, over the total manganese dmtus or chromite tonnes produced. Included within the C1 manganese and chromite unit cash costs are an allocation of offsite, non-corporate and support services. Depreciation, government royalty payments, deferred stripping adjustments and stockpile movements are not included in the calculation.
  2. 2“Adjusted EBITDA” is defined as operating profit before depreciation and amortisation, impairment write-back/expense, net foreign exchange gain/loss, non-cash inventory write-downs and exceptional items3. This is the key profitability measure used across the whole business and reflects the performance in a consistent manner and in line with how the business is managed and measured on a day to day basis. Adjusted EBITDA is not a uniformly or legally defined measure and is not recognised under IFRS or any other generally accepted accounting principles. Other companies in the mining industry may calculate this measure differently and consequently, our presentation of Adjusted EBITDA items may not be readily comparable to other companies’ figures.
  3. 3Exceptional items are material and non-recurring items excluded from management’s assessment of profits because by their nature they could distort the Group’s underlying quality of earnings. These are excluded to reflect performance in a consistent manner and in line with how the business is managed and measured on a day to day basis.
  4. 4‘Cash’ EBITDA is defined as Adjusted EBITDA after removing the impact of the non-cash items of deferred stripping and net movement in inventories.

Commenting on the results, Jackie Callaway (CFO of Consmin) said:

“Consmin has produced a solid operational performance in the year. Total volumes produced were broadly flat compared to the prior year with volumes of manganese ore produced declining 6% in response to weakness in the EMM market, offset by a 40% increase in the volume of chromite ore produced.

Manganese C1 cash costs have reduced a further 9% compared to the prior year despite an increase in C1 cash costs in Q4 as a result of a planned stripping programme in Ghana. Prior to Q4 C1 cash costs had continued to reduce each quarter from a peak of $3.78 in Q2 2011 to $2.93 in Q3 2012 as a result of the successful implementation of cost reduction initiatives. C1 cash costs are expected to continue to reduce in 2013 from overall 2012 levels.

2012 was a challenging year from a market perspective; however Consmin is encouraged by transpiring market developments to date in 2013. The recent increase in the alloy tender price was sparked by an upturn in sentiment in the Chinese market after the Chinese government transition which led to an increase in demand for manganese ore. This was evidenced by increases in the benchmark price at the start of 2013 from $5.30/dmtu in December to $5.90/dmtu at the end of March.

The Company signed an important long term sales offtake agreement with China’s leading EMM producer, representing the culmination of 18 months of intense contract negotiation and discussion. Contract pricing is linked to the benchmark manganese ore price and will account for a significant proportion of production in Ghana. The completion of the contract is a significant development for the Company and will underpin the Ghana sales and production strategy going forward.

Both Australian and Ghanaian operations have issued an updated resources and reserves statement during the year. Total Australian resources have increased 22% and reserves have increased 8% compared to the June 2011 resources and reserves statement. Total Ghanaian resources have increased 9% and reserves have decreased 11% compared to the June 2011 resources and reserves statement.”

Download the full financial results for the year ending 31 December 2012 (PDF – 1.1MB)

About Consolidated Minerals Limited

Consmin is a leading manganese ore producer within mining operations in Australia and Ghana. The principal activities of the Company and its subsidiaries (the “Group”) are the exploration, mining, processing and sale of manganese products. The Group’s operations are primarily conducted through four major operating/trading subsidiaries; Consolidated Minerals Pty Limited (Australia), Ghana Manganese Company Limited (Ghana), Manganese Trading Limited (Jersey) and Pilbara Trading Limited (Jersey).

Consolidated Minerals Limited is headquartered in Jersey and the address of its office is Commercial House, 3 Commercial Street, St Helier, Jersey, Channel Islands, JE2 3RU.

Company Information

For further information, please visit our website or contact:


+44(0)1534 513 300

Jackie Callaway, Chief Financial Officer
Peter Allen, Managing Director, Marketing
Paul Muller, Managing Director, Australia
Jurgen Eijgendaal, Managing Director, Ghana

Conference Call

There will be a conference call for analysts and bondholders on 24 April 2013 at 1pm BST (British Summer Time).

To access the results conference call, you must first register in advance on:

The results conference call, conference ID 28586170, can then be accessed by dialling:
UK: +44 (0) 1452 322 716

Market, Economic and Industry

Market, economic and industry data used throughout this report has been derived from various industry and other independent sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed and such industry forecasts may not have been updated. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward looking statements contained in this report.

Forward looking statements

This report includes “forward-looking statements” that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words ‘plans,’ ‘expects,’ ‘anticipates,’ ‘believes,’ ‘intends,’ ‘estimates’ and other similar expressions.

All forward-looking statements involve a number of risks, uncertainties and other factors. Although Consmin’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Consmin, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements contained in this report. Factors that could cause or contribute to differences between the actual results, performance and achievements of Consmin include, but are not limited to, political, economic and business conditions, industry trends, competition, commodity prices, changes in regulation, currency fluctuations (including the Australian dollar and US dollar exchange rates), Consmin’s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to timely and successfully process its mineral reserves which may or may not occur. Consmin is also exposed to the risk of trespass, theft and vandalism, changes in its business strategy, as well as risks and hazards associated with the business of mineral exploration, development, mining and production. Accordingly, investors should not place reliance on forward looking statements contained in this report.

The forward-looking statements in this report reflect information available at the time of preparing this report. Subject to the requirements of the applicable law, Consmin explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward- looking statements in this report that may occur due to any change in Consmin’s expectations or to reflect events or circumstances after the date of this report. No statements made in this report regarding expectations of future profits are profit forecasts or estimates, and no statements made in this report should be interpreted to mean that Consmin’s profits for any future period will necessarily match or exceed the historical published profits of Consmin or any other level.