Palabora shells out on dividend

[] — COPPER miner Palabora Mining declared a substantial interim dividend on Tuesday following an increase of cash in hand but a 70% drop in net earnings.

The company declared an interim dividend of R1,50 a share. “Any final dividend in respect of the full-financial year will depend on the global market conditions,’ Palabora said in its interim results for the period ended 30 June 2009.

Palabora ended the first half of 2009 with net earnings of R141m, a 70% drop from R464m in the comparable period. This can be attributed to lower prices and lower sales of copper, the weakening of the rand, hedging losses, increased coal and electricity prices, and a plethora of other factors contributing to the high cost of sales.

The company sold a record amount of magnetite in the period of 1.1 million tonnes, an increase of 47%.

Palabora spent R60m on capex, primarily spent on upgrading its operations which includes its underground mine.

Net cash increased to R783m from R381 on June 2008 as a result of cash preservation and cash flow management.

Palabora has made the final R80m repayment of the senior term facility and as a result has no outstanding debt.

Palabora is a producer of copper, magnetite and vermiculite and is 57%-controlled by Rio Tinto and 17%-owned by Anglo American.