Consolidated Minerals earned a record A$25.1 million in 2003, so it was only fitting the company was honoured at the recent Diggers & Dealers conference in Kalgoorlie, Western Australia.
Consolidated Minerals was praised for its “incredible growth” and presented with the Diggers award at the gala dinner. Michael Kiernan, the company’s managing director, accepted the award only hours after announcing a A5-per-share dividend to shareholders. The dividend increases the full-year payout by 60% to A8.
Kiernan has brought the company a long way from being A$30 million in debt and in receivership in 1997, when it was known as Valiant Consolidated, to being a totally restructured moneymaker with new personnel. Since clawing back to life, the company has increased its market capitalization ten-fold to A$250 million. It now has A$40 million in the bank and zero debt.
The record profit recorded this year represents a 38% return on equity to investors and reflects the strong demand and firm commodity prices for manganese and chromite that have positioned Consolidated Minerals for a favourable period of continued growth.
Kiernan says Consolidated Minerals’ earnings also show that this is an interesting period for world carbon steel industries, driven by Chinese demand.
“The Chinese government is managing the economic situation very carefully through its recent initiatives to slow the growth rate of selected industries,” he said. “Our view is that demand has resumed without the rampant speculative buying that triggered previous steep price escalation.”
Consolidated Minerals mines high-grade manganese and chromite ores from the Pilbara region of Western Australia. The company produces 5% of the world’s manganese and 2.5% of the world’s chromite.
The company’s Woodie Woodie operation produced 611,000 tonnes of manganese in fiscal 2003-2004 year, selling 606,000 tonnes.
Chromite production has more than trebled to 243,000 tonnes, and Consolidated Minerals sold 230,000 tonnes. That’s a 100% increase over the previous year.
Kiernan predicts things will only get better for the company, given that there is a A$6.5-million expansion under way at Woodie Woodie that will increase production to 800,000 tonnes per annum.
“The strong cash generation from our operations, together with a A$25.2-million institutional financing completed earlier this year, has underpinned a number of growth initiatives,” he said. That includes a A$6-million program aimed at exploring for manganese, chromite and iron ore, and an acquisition programme that has seen interests obtained in companies with exposure to the carbon steel materials business.
— The author is a contributor to Australia’s Paydirt magazine.
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