- ACCI and employer association
- ACTU and unions
- Australian Building and Construction Commission
- BHP Billiton
- business restructuring
- Corporate psychopaths
- Dealing with the GFC
- defence industry
- Demographic change
- Diversity in the workplace
- Economic recovery
- employee entitlements during redundancy
- employer associations
- employer branding
- employer responses to GFC
- ETS and Carbon trading
- executive pay
- exit interviews
- Fair Work Act
- Fair Work bill – employer responses
- Fair Work bill in the Senate
- family friendly workplaces
- Government responses
- graduate recruitment
- hours of work
- HR's role in the organisation
- immigration policies
- international students
- job fear
- Job growth in Adelaide
- job satisfaction
- job search
- job security
- liquidity crisis
- mature workers
- Measurement of HR value
- minimum wage rates and awards
- modern awards
- new and expanding industries
- New technology
- not for profit
- Olympic Dam
- paid maternity leave
- Pandemics and epidemics
- pay equity
- personal effectiveness
- post GFC job losses
- renewable energy
- retention management
- salary and penalty rates
- Sick Sad World
- signs of recovery
- skill shortage
- South Australia
- Stand down provisions
- stimulus packages
- time management
- unfair dismissal laws
- Union – Labor government relations
- uranium and nuclear power
- web 2.0
- work/life balance
- workforce planning
- workplace bullying
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Monthly Archives: March 2009
March 31, 2009
BHP BILLITON is today expected to outline a range of new safety measures for its West Australian iron ore operations following a string of five deaths in eight months, amid calls for more detailed information on its safety record to be released to the public.
The top management of BHP’s iron ore division has met the WA Mines Minister, Norman Moore, twice this month. Mr Moore has called the company’s recent safety performance “alarming and unacceptable”.
Sources said the minister and the company were likely to make an announcement about the new measures today, following their meeting on Friday.
After the first three deaths in its iron ore division last year, the WA Government compelled BHP to hire an independent expert to compile a so-called “Section 45″ report into its safety practices in the Pilbara.
The report is due to be presented to WA’s state mining engineer at the end of next month, but it is possible it will not be made public, even to the families of the workers killed this financial year.
Three of the workers were contractors employed by various arms of Leighton Holdings, while the other two were BHP employees.
BHP was forced to hand over a Section 45 report in 2004, following the deaths of three workers in the Pilbara in 2004, including one at its disastrous hot-briquetted iron plant in Port Hedland.
The Section 45 report, said to be far more detailed than the 534-page Ritter Inquiry report into BHP’s safety practices produced in 2004, has never been released publicly.
BusinessDay believes various freedom of information requests to obtain the Section 45 report have been denied. The report had led to the WA Government charging BHP with breaches to the Mines Safety and Inspection Act. The miner pleaded guilty to negligence and was fined $200,000 in 2006.
A BHP spokesman, Peter Ogden, would not say whether the Section 45 report due to be completed next month would ever be made available to the public or at least to the families of the five men killed this financial year.
“We are not in a position to comment on whether the report … will be released publicly,” he said. “The department will determine whether the report will be released.”
31 March 2009 8:28am
As talent-sourcing gets easier, employers should consider breathing new life into their organisations by “top grading” their workforce and shedding poor performers, says Taleo senior vice president Al Campa.
Over the past few years, he says, employers perceived “it was better to have poor performers than no performers”, but there are now opportunities to bring in better talent to replace under-performing staff, often without paying a higher salary.
“There’s more managing out now than there was in the past because people aren’t as hard to replace,” he says, and it’s happening at all levels of organisations, “executive levels, all the way down the line”.
Campa says top grading must be handled with sensitivity if an organisation has recently announced redundancies, and it must be clear that replaced staff are being managed out for performance reasons.
While some organisations, such as GE, have a policy of top grading a set proportion of their staff every year, Campa doesn’t advocate such an approach. “Most companies don’t have that… it can lead to less loyalty from the workforce because you’re wondering when your number’s going to come up.
“So that’s not something we would encourage, unless a new leader comes in and wants to re-make the company by, for example, letting the bottom 10 per cent go, and bringing in fresh blood. It can be difficult for an ongoing company.”
Redundancies poorly handled
The majority of employers handle the redundancy process poorly, Campa told HR Daily.
They don’t leave themselves enough time to figure out who to cut – “they do it very quickly, for example, ‘we’re firing 10 per cent on Friday’ and that leaves you two days” – and they don’t have a strong process to ensure those let go are the poorest-performers, he says.
Many companies simply look at who got the worst reviews in the last review cycle, but without thinking about why, he notes.
“Sometimes it might be because the person just got promoted and they’re in a new position where they haven’t figured it out yet, so you’ve just let go one of your top performers who’s just in a new job and is getting their feet wet. Maybe they’ve had a series of good years and just had a bad year for a variety of reasons… or maybe they’ve got personal issues that are going to go away in a few months.”
Employers must look further than the last performance review, he says. If an employee has performed strongly over a number of years before having a poor review, that should be “a red flag”.
Skill sets are also an important consideration, because the people in a department that is the focus of downsizing might have valuable skills that will help the company through the downturn.
“Very few companies put enough work into looking at the details to figure out, ‘if we have to cut 10 per cent, who are they going to be?’”
Clients to share talent pools
Campa told HR Daily that Taleo is currently developing the technology to allow its clients to be part of a global HR community.
Using “cloud computing”, it plans to launch three exchanges within the next three-to-six months: the “knowledge exchange” will provide a forum for HR professionals to share their ideas and experiences; the “solution exchange” will allow third party software providers to promote their solutions, with members able to rate and review them, similar to the way iPhone applications are shared; and the “talent exchange” will take the form of a shared talent pool containing the details of candidates who have applied for jobs with Taleo’s clients (dependent on the consent of both jobseekers and employers).
Campa says about 10 million jobseekers apply for jobs through Taleo every quarter, so sharing them is a “more efficient way to match candidates looking for jobs with the jobs that are available”. Employers will be able to specify the amount of time they “own” a candidate – for example, 90 days from receiving a job application – before releasing them into the pool.
He says the feedback from clients so far is overwhelmingly positive, as “people always want talent”.
Article from: Sunday Herald Sun
March 29, 2009 12:25pm
THE Australian Fair Pay Commission needs to think about the effect a minimum wage boost would have on employment, Julia Gillard says.
Ms Gillard, who is also the Employment and Workplace Relations Minister, says the global financial crisis needs to be considered with any wages decision.
“We’ve said the biggest thing that we think should be on the Fair Pay Commission’s agenda at this difficult time is the question of jobs,” Ms Gillard told ABC TV on Sunday.
“There is obviously a relationship between minimum wages and employment.
“But the point that we have made is that in a slowing economy there is more reason to be concerned about the nexus between wages and employment.
“We’ve put that point squarely before the Fair Pay Commission.”
The ACTU wants a $21 per week pay increase for low-paid workers to cope with cost of living pressures, but business wants something sharply below that or even nothing.
The government wants the Australian Fair Pay Commission to take into account cash handouts paid to low-income workers from its two economic stimulus packages.
Ms Gillard acknowledged that low-income earners were doing it tough.
“For low-income Australians, obviously people who work on minimum wages are people who are under financial pressure,” she said.
The commission is due to announce its decision in July.
David Uren, Economics correspondent | March 31, 2009
Article from: The Australian
THERE could be one person of working age on welfare for every three people with a job by the time the recession ends, according to one of Australia’s leading economists, Bob Gregory.
The welfare blowout, with more than a million more people likely to be relying on benefits, will far exceed the threat posed by an increasing aged population and has so far been overlooked by federal Government and Treasury. Professor Gregory has modelled the changes in the welfare population following the 1990-92 recession, and says the rise in unemployment is likely to be followed by increases in the number of people on disability, carer and sole-parent pensions.
A paper to be presented by Professor Gregory to a Victoria University conference next month shows the full-time male workforce never recovered from the 1990-92 downturn, when it dropped from a historic average of about 62 per cent to 54 per cent of the male working-age population.
“What happens is that male unemployment goes up, and then, as time goes by, the unemployment rate comes down, not because there are more jobs but because the unemployed gradually seep into disability payments,” he says.
Professor Gregory says that a year or two after a recession, half the men on disability benefits have come from the unemployment pool, where they have been in and out of jobs for some time. It is usually men aged over 55 years.
The rise in the number of women on welfare during a recession is more likely to be an indirect result of male unemployment.
“For women, because the men didn’t have jobs, they took up welfare as partners, carers or as lone parents,” he says in the paper.
He says the Government and Treasury have not yet started to calculate the effect of what could prove to be an additional million people on welfare, sustained for six or seven years.
“The only budgetary implication that the Government has consciously faced has been around what to do about old-age pensioners, where they seem to have taken a gulp and decided to go ahead anyway.”
Any decision to raise the age pension is likely to spill over to the disability, carers and sole parent pensions, which are all based on the same formula.
The paper says the worst outcome for men during recessions partly reflects their employment in sectors such as manufacturing, which is subject to structural change, and construction, where the cyclical reversal when conditions improve takes a long time to filter through.
It was only in the last two or three years of the boom that men did well because of construction, much of it related to mining.
“Just before the end of the boom, construction was very big, but it was also state specific, focused on Western Australia and Queensland, also at the lower end of the skill spectrum,” Professor Gregory says.
Women, by contrast, have done better in the services sector of the economy, which is not as severely affected by recessions as manufacturing.
“The women’s labour market was not adversely affected in a permanent way by the 1992 recession,” Professor Gregory writes in the paper.
“They lost some full-time positions, but clawed them back quickly.”
Barry Cohen | March 31, 2009
HE was living proof that some mothers do ‘ave ‘em. The Frank Spencer of eco-tourism. Everything he touched, walked past or looked at broke, exploded, cracked or gave up the ghost. Accident-prone would not even begin to describe the trail of devastation that followed him around our wildlife sanctuary.
The water pump had to be switched on daily. He burned it out. Every sprinkler he looked at broke. Snakes in his care escaped and scared the wits out of visitors. I won’t even begin to describe his efforts in the kitchen. A delightful young lad, but a one-man wrecking ball.
Did I sack him? No way! With the unfair dismissal law hanging over our heads, I couldn’t afford the thousands of dollars I might have to pay him in “go away” money.
Fortunately I was able to arrange for his departure while he was still in his trial period, avoiding a nervous breakdown and halving my insurance premiums.
Then there was the young guide, unquestionably good at her job but prone to arrive at work the worse for wear, boasting about how she had got smashed the night before. That was her business. Our point of departure occurred when her bacchanalian excesses resulted in her phoning in sick just when we were expecting a large tour group. The background music and raucous laughter gave her away.
Her enforced departure landed us in the Industrial Relations Commission where the beak informed me that “she hadn’t a leg to stand on”, then told me to make her an offer.
Further back, when I was in the fashion business, our ladies’ wear manager took us, in today’s prices, for more than $100,000. When we discovered the shortfall, she stormed out and returned that week to her homeland, South Africa. We were to hear later that three other stores had suffered a similar fate.
I could go on and on and on. During 50 years of running small businesses, the untold stories would fill an encyclopedia. Most employees were honest, loyal and hardworking, and no sane employer would sack them. Then there were the others.
Few will be surprised to learn that I am not an admirer of the unfair dismissal clauses in the recently passed Fair Work Bill. In fact, I detest them. The Government places great stress on the rights of employees while ignoring those of employers.
The Government says the electorate gave it a mandate at the last election to repeal Work Choices legislation and the unfair dismissal clause in particular, which defined a small business as one with fewer than 100 employees. It is now 15.
The Government undoubtedly has a mandate but that is hardly surprising when 85 per cent of the workforce consists of employees.
Being popular, however, doesn’t make it right. No one favours unfair dismissal but fairness is in the eye of the beholder. Show me a sacked employee who believes they were fairly dismissed.
Some will argue that there are provisions in the act for them to be dismissed fairly. That is true, but it is rare because there is no way to legislate for the thousands of incidents in the workplace that can lead to dismissal. It’s like legislating for disputes in marriage. Then try catching a thief. It’s nigh on impossible.
Leaving aside misdemeanours and criminal behaviour, what if you just don’t get on? What if staff members are doing their job but you can find someone who can do it better?
Unfair? Unlucky? Definitely, and it’s difficult for most employers, who hate dismissing anyone, but for a business to survive sometimes it is unavoidable. Provided the person laid off receives their entitlements, the employer has fulfilled their responsibilities to the employee and the business.
Reverse the situation. What happens when an employee of many years, who has been well paid and well treated, gives notice for any number of reasons: better pay, fewer hours, promotion? Should they be stopped and forced to pay the boss for their unfair departure? The idea is absurd.
The depressing part about this debate is that the Coalition, while opposing unfair dismissal, has argued about numbers, not the principle: theright of employers to choose their staff.
What sort of person becomes a small-business person? Usually someone who, after a number of years as an employee, decides to strike out on their own. Making money is important but not the sole factor. They invest their life savings, mortgage their home and double their workload to be their own boss.
What can go wrong usually does: 70 per cent don’t make it through the early years. Forget the 38-hour week, it’s 60, 80 or more.
When the wheels fall off, as they do periodically, it’s sleepless nights trying to work out how to pay the interest, wages and rent, and handle government red tape.
Most wonder what possessed them to leave the safety of permanent employment and the benefits that go with it: regular wages, holidays, sick leave. Those are long gone.
Their leisure time is now taken up filling out forms for the GST or worrying what governments will impose next.
There are 1.88 million small businesses in Australia with 3.75 million employees. They are the backbone of our free enterprise system, which, despite all its failings, is light years ahead of the alternative.
I’m amazed the Government doesn’t recognise the burden it is placing on small business by not allowing them to employ whoever they wish.
It claims unfair dismissal laws will not increase unemployment. It is deluding itself. Any employer with close to 15 employees will think long and hard before employing new staff.
The reason for this blind spot is not difficult to discern.
Increasingly, those who make up the Labor caucus have less and less business experience. Each successive parliament in recent years has Labor members and senators with the same background: teachers, lawyers, public servants, party apparatchiks and trade union officials.
Noble occupations all, but a vastly different mix from when I came to Canberra 40 years ago. We had all the above but we also had farmers, policemen, doctors, chemists, journalists, accountants, small-business people and more. Unfair dismissal legislation would never have passed caucus, let alone cabinet.
It’s never too late for a government to recognise it is in error. Let’s hope it has the courage to do so.
Michael Stutchbury, Economics editor | March 31, 2009
Article from: The Australian
AFTER returning from the G20 summit in London, Kevin Rudd should hit the pause button on Julia Gillard’s second round of workplace re-regulation. Otherwise, the Rudds will not want to get sick outside standard business hours. Their local chemist could be shut because of punishing new penalty rates imposed by Gillard’s award “modernisation”.
Before he left for overseas, Rudd was pinned down on the ABC’s AM program on how pushing up the cost of labour through the new workplace legislation and the separate award modernisation would protect jobs. The Prime Minister had no answer.
Gillard since has conceded that “there is a negative relationship between minimum wage increases and employment” and that “there is more reason to be concerned” about this as the economy slides into recession. The “biggest thing” on the Fair Pay Commission’s agenda should be jobs, she says.
Until now, the FPC set up by John Howard has lifted the minimum wage in line with price inflation. Gillard’s call for a “considered increase” from the FPC’s scheduled July decision appears to mean a real cut to the minimum wage, possibly compensated by tax offsets for low income earners in the May budget.
Gillard talks of the FPC’s decision as being important for “low-income Australians”. But most of the 140,000 workers on the $543.87 federal minimum weekly wage are not in low-income households.
They’re typically students or second income earners. And most of the 1.3million working Australians on allminimum wages adjusted by theFPC decisions are paid considerably more than the $14.31 an hour federal minimum. They’re onaward pay scales that stretch beyond $40 an hour and even into annual six figures.
This is the award system that Gillard has ordered the Industrial Relations Commission to modernise as it morphs into Fair Work Australia and as Howard’s FPC bites the dust come July.
Unique to Australia, the award system is a sediment of compromises over countless industrial disputes stretching back more than a century. By one reckoning, there are 4053 different awards, containing 4000 pay scales and 105,000 job classifications, along with all sorts of detailed rules about penalty rates, meal breaks, overtime and loadings.
The Striptease Industry Conditions Award provides a $20 loading for employees required to expose “nipples, buttocks or genitalia” in any “parade representing the employer’s business”.
But rather than relax the grip of the shambolic old award system and pay-scale structure, which the Fair Pay Commission planned to do, Gillard’s exercise will tighten it.
The new simpler to manage grid of pay scales, loadings and sundry conditions on Australian businesses and the 10.8 million people they employ will be reinforced into something more solid and more downwardly inflexible.
The exercise aims to structure awards around industries, largely reflecting the history of coverage disputes between the monopolistic trade unions that pay most of Labor’s bills. But there will still be occupational awards across industries when occupational unions are institutionally strong enough, such as for metal maintenance workers, nurses and clerks. Emerging new industries such as call centres, web design and biotechnology will be more easily roped in through “common rule” and a catch-all award.
Rather than fashion flexible working arrangements around evolving business dynamics, the exercise inevitably reflects the mindset of the old system. So-called hard-won gains – such as the peculiar Australian award condition that workers must be paid 17.5 per cent more when they take annual leave – cannot be surrendered when times change. Instead, a union beachhead of higher pay and conditions wrung out of one vulnerable business or industry through collectively bargaining must be consolidated so it can be spread to the rest of the award system. And the new Fair Work Australia will run award test cases every few years, perhaps on maternity pay or sex “discrimination”, which will insert new minimum award conditions to be obeyed by collective bargains.
Gillard’s impossible decree that modernisation cannot cut employee conditions or push up employer costs predictably is producing the default position of levelling up. Casual employment has been the great escape from the system, particularly for service industries. Levelling up to the metal trades standard will impose a higher economy-wide casual loading of 25 per cent, which prices a lot of casual work out of business.
Two weeks ago, this column explained how the restaurant trade would be forced to operate under the “modernised” award designed for the more unionised hotel or pub industry, including penalty rates of up to 275 per cent for serving food on public holidays.
The IRC relented on its first bid to rope the pharmacy industry into the modern retail award based on the conditions won in big department stores. But the levelling up for the new Pharmacy Industry Award 2010 will mean an end to the modest penalty rates that until now have applied for casual pharmacy assistants and that have allowed many chemists to remain open outside standard business hours.
First, the new award will impose the new standard 25 per cent casual loading on top of full-time wages, which themselves will increase by up to 250 per cent for public holidays. For casuals, Saturday work after 9pm will attract a 150 per cent casual loading; Sunday work 200 per cent and public holidays 312.5 per cent.
Much of the pharmacy price structure is set by government regulation, reducing the scope to pass on such labour-cost increases. This will increase the pressure on chemists not to open at night, weekends and public holidays.
Gillard’s department lamely claims that “the flexibilities and simplifications available through modern awards and the institutional framework should have a positive effect on business costs”, whatever that means. But the new pharmacy award requires any “emergency” changes to a part-time pharmacy assistant’s roster be made in writing 48 hours in advance. And it requires that any work done in excess of part-time rostered hours be at least time and a half.
Just as it has done for executive pay and maternity pay, the Government should put the Productivity Commission on to assessing what this award modernisation exercise and the in-the-bag Fair Work legislation will do for job creation and unemployment. That may give Rudd some answers.
31 March 2009 6:49am
Top-performing salespeople all ensure that “personal energising time” becomes one of their habits, says sales expert Ian Stephens.
“Show me a person who is organised and in control,” he says, “and I’ll show you a person engaging in some form of personal energising time (PET).”
All “tall poppy performers” engage in some thinking time, Stephens says in a recent newsletter. Most nominate the PET principle as the one which would have the most impact or benefit in their life, “and yet fail to implement PET sessions because it takes discipline and commitment”.
To make PET a regular part of your life, he recommends:
Book PET sessions in your diary – treat them like a normal client appointment. “In other words, block it out in the diary and don’t let anything get in the way of you doing it.
“This is the most important meeting you could attend all week – preparation time for you regarding your life planning. Treat it with utmost respect.
“Tall Poppies engage in PET sessions three times a week, minimum of 20 minutes per session. They have their diary and a pen handy, and think about the activities coming up in their life – personal or professional. They listen to the quiet whisperings from the mind and creatively start to proactively manage the event, instead of reacting.”
Enlist a support partner. “Nothing increases motivation and commitment to doing something like the knowledge that another person is going to be checking up on you,” Stephens says.
“Enlist someone you can trust to contact you at an agreed time after each planned PET session. During this telephone conversation, their aim is to ask you how the session went, and what you achieved from it. This way you will start to verbalise the benefits of doing the PET session. After two weeks of this, you will have created a new habit and will start to realise that 20 minutes of PET time actually creates more time in the day because you are focused and energised.”
This is on top of the benefit of actually implementing the inspirational ideas you had during the PET session, he notes.
Pick the time best suited to you. Choose a PET according to your body clock and your lifestyle, Stephens says. For some people this might be early in the morning before others begin to make demands on your time, for example.
If you try to do PET when you are tired, or constantly interrupted, you won’t get the results it can produce and you’ll give up on it, he says.
March 29, 2009
PEOPLE are not paying their bills. Worse still, they are not paying the bills that matter. A survey from credit ratings agency Dun and Bradstreet shows people are less likely to pay their mortgage than their Foxtel bill.
At first glance it looks as if people have got their financial priorities wrong, but Christine Christian, Dun and Bradstreet chief executive, says the results are a wake-up call as to just how bad things are getting for many consumers. They pay what they can and the mortgage bill is just too big.
It’s the oddest thing: there’s the stockmarket enjoying a “bear market rally” and heading for its best monthly performance since 1988. At the same time the Reserve Bank of Australia is saying we will be insulated from the worst of the global downturn. But behind the scenes consumers are struggling and the banks are falling over each other to send in the debt collectors.
Since January the number of referrals from lenders to debt collectors is up a shocking 42 per cent, compared with the same period in 2008: It’s one of those signals that tells you what is happening.
Moreover, people closest to the situation such as Christian are concerned that the level of bill defaults is going to get worse, not better, with the success of the first home buyers’ grant. The new grant package, which triples the subsidies for first home buyers, is due to terminate on June 30. “We’re seeing artificial demand for new homes, a rush before the grants run out, but will these people be able to pay their bills?” Christian asks.
Though the reduction in interest rates has eased the fear of bad debts in the banking system, history shows that rising unemployment is a key motivator of financial stress. Personal insolvency, for example, goes up directly in proportion to unemployment levels. Our unemployment rate is rising — it’s 5 per cent and with job lay-offs being announced daily many economists expect it will hit 8 per cent before reaching a peak.
A second new survey — from the University of Melbourne — says unemployment is the biggest cause of bankruptcy. Once upon a time bankrupts were often business people who had somehow seen their enterprises go off the rails. Today the level of “non-business bankruptcy” is rising: the statistics are populated with people closer to the Isla Fisher character in Confessions of a Shopaholic, that is someone between 25 and 34 who simply spends too much. The difference between life and the movies is that being chased by credit card companies and debt collectors is not funny.
We’ve recently seen some notable bankruptcies, including that of Mimi Macpherson, sister of former supermodel Elle, who declared herself bankrupt at Christmas, owing $300,000.
And then there’s Matthew Perrin, the former supremo of surf gear company Billabong, who is bankrupt following failed ventures in China for $28 million (including $1.6 million owed to the bookmakers!).
But forget the celebrity bankrupts: you may not believe this but one in 20 bankrupts go under with “unsecured debts” of less than $2000.
What on earth will happen now that we are officially entering a recession?
March 30, 2009
CHINA MINMETALS put a proposal to OZ Minerals last night to acquire the bulk of the company, excluding the Prominent Hill copper-gold mine, in a move that could help save the miner from administration.
The Herald understands an offer was given to OZ after a weekend of frantic work by advisers from both sides who hoped to agree on a restructured deal after the Department of Defence’s decision on Friday to bar the state-owned Chinese company from buying Prominent Hill.
“We would respond to any proposal we receive as soon as we evaluated it,” OZ’s executive manager of business support, Bruce Loveday, said last night.
OZ could resume trading as early as today if it agrees to the revised proposal from Minmetals, although it is understood no strict deadline had been set under which OZ needed to reply to the proposal lodged last night.
OZ has $1.3 billion of debt due to be repaid to its banking syndicate tomorrow, which has left it on the brink of administration. That means it is not in a particularly strong bargaining position over any offer from Minmetals.
The Prominent Hill copper-gold mine is OZ’s most valuable asset. The Federal Government has allowed Minmetals to proceed with a bid for the remainder of the company, but it remains subject to Foreign
Investment Review Board approval.
A Deutsche Bank analyst, Paul Young, said he thought the banking syndicate would be willing to grant a 30-day extension on OZ’s debt if the company could strike a revised deal with Minmetals by tomorrow.
He said OZ could be worth 50c a share, compared with the previous Minmetals offer of 82.5c a share, if Prominent Hill was excluded from the mix.
“If Minmetals decide to not revise their offer, then we see no alternative for OZ than administration,” Mr Young said, adding he valued OZ at 33c a share under a liquidation scenario.
It could take months for OZ’s banking syndicate to recover their funds if the company enters voluntary administration or receivership.
OZ and Minmetals spent the weekend working as fast as possible to come up with a new deal, which would include assets such as the Century zinc mine in Queensland, the Sepon copper-gold operation in Laos and the Rosebery zinc mine in Tasmania.
“There are a lot of issues to be sorted through,” Mr Loveday said. “Tuesday is an interesting day for two reasons. That is when the trading halt is over and it is the bank day. It would be great to resolve it before then, but it is about doing the right deal, not just any deal.”
OZ is unable to solicit offers for Prominent Hill under its existing deal with Minmetals, but it is open to considering approaches from potential acquirers such as BHP Billiton and Canadian miner Barrick Gold. BHP owns the Olympic Dam mine located about 150 kilometres from Prominent Hill and has already purchased copper concentrate from the OZ mine.
Mr Young said Prominent Hill could fetch $941 million, but that figure would include $600 million of associated project debt. The mine is not expected to be cash-flow positive until the June quarter.