Investor Centre / 2021 Annual Report
Managing Director’s Review
Thank you for your continued support and investment in Newcrest through what has been another year of strong operational and financial performance.
In April 2021, Newcrest celebrated its 30 year anniversary which was a significant milestone for the Company. Over our 30 year history we have established a strong track record of discovering and commercialising major deposits all over the world, including our world-class Cadia asset. Today, Cadia is one of the world’s largest and lowest cost gold and copper producers, with an expected multi‑decade future.
Earlier this year we announced our Forging an even stronger Newcrest plan which outlined our aspirations across five key pillars of Safety and Sustainability, People, Operating Performance, Technology and Innovation and Profitable Growth that we hope to achieve by the end of calendar year 2025.
A key component of this plan was defining what we are here to do, which culminated in the creation of our new Company Purpose: Creating a brighter future for people through safe and responsible mining. We found the common motivation that permeates through our company is that we all want to create a brighter future for people.
At Newcrest, safety and sustainability is core to how we run our business. Our unwavering focus is ensuring that everyone goes home safe and healthy each day and we strive to ensure that our local communities trust us because of our environmental and social performance.
Newcrest’s overarching objective remains the safety and health of our people. We have made excellent progress across our safety objectives during the year and are now nearly six years free of fatalities. We have also achieved industry-leading low injury rates of 2.3 injuries per million hours, which is a 12% improvement compared to the prior year1.
It has now been more than 18 months since the start of the COVID-19 pandemic and we are still witnessing its devastating impacts across the world. Our operations were able to continue producing without any material impacts to production, which is largely due to the commitment and personal sacrifice of our people. I extend my personal gratitude to those who have endured extended periods away from their families to ensure that our business was able to continue without material disruption.
My proudest achievement for the year has been our safety transformation at Red Chris. When we acquired our 70% interest in August 2019, Red Chris’ injury rates and their severity were significantly higher than our other operations. We immediately implemented our NewSafe program which, together with our investments to improve working conditions, has helped to transform on-site safety behaviours and safety performance. Our significant investment in safety has translated to a 48% reduction in injury rates at Red Chris when compared to this time last year.
In FY21, we continued our memberships with the International Council on Mining and Metals (ICMM), the World Gold Council (WGC) and the Minerals Council of Australia (MCA) and have now incorporated the ICMM’s 10 Principles for Sustainable Development and the WGC’s Responsible Gold Mining Principles into our Sustainability Framework. We also made great progress implementing our flagship sustainability-related policies of Climate Change, Water Stewardship, Biodiversity and Communities throughout our business.
A key part of Forging an even stronger Newcrest is our commitment to developing our people. We recognise that building capabilities and creating career opportunities across our business is not only important for our people but is critical to our success now and into the future.
Over the past year we have focused on building an inclusive and psychologically‑safe work environment where our people feel heard, empowered and able to speak up. We believe that this is the foundation for increasing collaboration and innovation in the workplace and is also key to attracting the best talent in the mining sector, regardless of their background or experience.
We delivered another strong operational and financial performance for FY21, producing 2.1 million ounces of gold at an All-In Sustaining Cost (AISC) of $911 per ounce. Our strong operating performance, combined with the benefit of higher gold and copper prices, underpinned a record free cash flow of $1.1 billion and a record statutory and underlying profit of $1.2 billion, 80% and 55% higher than the prior year respectively.