Oz Minerals Impairment Reversal, Profits

Diversified mining company, Oz Minerals (ASX:OZL) have announced that it will reverse an impairment charge of $201.1 million which does not form part of operating earnings and is a non-cash adjustment. The action will increase net profit after tax for the upcoming half year net profit after tax reports due for release on August 25.

The reversal, on plant, equipment and buildings at the company's Prominent Hill mine in South Australia, will boost the company's half year net profit by $141.1 million, although the accounting move will have no effect on earnings or the company’s cash position.

In a statement, the company said: "This impairment reversal is in respect of a $251.0 million impairment recognised by the company in its financial statements for the year ended 31 December 2008. The key factors contributing to the impairment in 2008 were significant global economic uncertainty, a then current copper price of approximately $1.50/lb, the very early stage of commissioning of the Prominent Hill project and the fact that the asset was classified for accounting purposes as 'held for sale' at that time."