Newcrest not considering exiting Lihir

NEWCREST Mining CEO Sandeep Biswas says the sale or closure of the troubled Lihir mine in Papua New Guinea are not options under consideration as the company advances a review of the asset.
Newcrest not considering exiting Lihir
Newcrest not considering exiting Lihir
Newcrest not considering exiting Lihir
Newcrest not considering exiting Lihir
Newcrest not considering exiting Lihir

Newcrest wrote down Lihir's carrying value to $A5.4 billion from $7.6 billion, which contributed to the company's full-year loss of $2.2 billion.

Biswas, who took over as CEO on July 4, said despite some improvements at Lihir, it was a "very unsatisfactory" result and he wasn't satisfied.

He said improving the performance at Lihir was critical to realising the full potential of Newcrest.

The company implemented a review at the site and Biswas said Newcrest would act immediately on any recommendations throughout the process.

"There is no silver bullet - it's about hard work and detailed work by the team," he told journalists on a teleconference today.

Biswas said Lihir was a complex operation but he was confident the company could turn it around.

"My experience is in difficult operations - some more difficult than Lihir, to be perfectly honest," he said.

The focus is on upgrading skills, motivating the workforce and changing the culture at Lihir and other assets.

Biswas is pushing a culture of "accountability and personal ownership" among Newcrest's workforce.

"Cultural change is an integral part of the improvement process," Biswas said.

Biswas hasn't set a timeline for the Lihir review.

"The reason for that is I want this to be a sustainable change in the way the company thinks," he said.

However, he expects to be able to give an update on Lihir when the company holds its investor day in October.

But Biswas ruled out the sale of the asset, which was acquired through the $9.5 billion takeover of Lihir Gold in 2010.

"I see Lihir as very much a long-term asset and a material contributor to our bottom line," he said.

Shares in Newcrest dropped 1.1% to $11.07.

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