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Peter Ker May 28, 2012

WHEN his knee started giving him grief, Terry Burgess knew it was time to cut down on his running.

After years spent jogging between work and home – kitted out with a fluro vest and a flashing headlamp for extra visibility – the OZ Minerals boss recently turned to the Pilates mat to improve his flexibilty and strengthen his knee. ”It’s really good, but it’s hard,” he said. ”Half the people in our office are going to these sessions, I just need to get some more of the men to come along.” Yoga-inspired feats of balance and flexibility might not be the way most mining bosses spend their lunch break, but Burgess is a man who has never cared much for the macho mining stereotype.

He refuses to own a car, preferring to commute to his home – deep within the electorate that made Adam Bandt the first Greens MP to sit in the House of Representatives – by public transport or on foot. He’s set gender and indigenous participation targets across his company, and branded it as a ”modern” mining company through ads that glorify the urbane, cafe lifestyle workers can enjoy through fly-in, fly-out jobs.

He laments the industry’s failure to rid itself of its rough and tumble image, and unlike some mining bosses, he has a considerable environmental conscience. ”I’ve travelled enough places to see a lot of things we do are not right. You fly into Los Angeles and you go through that yellow cloud. You go into Hong Kong and you can’t see across the harbour for most the year,” he said. ”Those are the sorts of things you just know are wrong, like the brown coal burning – it has got to be wrong. ”There’s a lot of evidence I think that mankind is not benefiting the environment in its activities.”

While that might sound like personal views and eccentricities, Burgess insists they are also good business. ”We employ a lot of good people who are young and they come into the industry and they don’t accept these things that are wrong. They say they are not going to work for a company that does the wrong thing,” he said. ”They could be voting Green and having the same views as environmentalists, but they work for mining companies and they can make a difference. ”It all makes good business sense because if you’ve got a workforce who are happy working there, and it mirrors the normal society, then people are going to stay and if people stay, you don’t have to keep retraining and you don’t have to recruit.” Burgess points to workforce turnover rates at OZ that have more than halved from 30 per cent to 12 per cent.

 Unfortunately, turnover rates are not the only thing at OZ to have halved. Burgess will front shareholders at the company’s AGM today knowing the share price is 44 per cent lower than at last year’s AGM. While similar falls have hit other miners, there’s little explanation for OZ suffering such a decline given prices for copper have only fallen a tad, while prices for its secondary commodity (gold) have strengthened over the past year. Burgess blames general market pessimism for some of the decline, but concedes that investor impatience with OZ’s acquisition process has also been a factor.

 The company has been lugging around a billion-dollar war chest for much of the past three years and despite last year’s purchase of Rudy Gomez’s Carrapateena deposit, $750 million of remains unspent. Gomez remembers a polite and measured negotiator who largely left his acquisition staff to conduct the process, yet wasn’t afraid to step in during pivotal moments. ”I was making a presentation to his group at the Port Augusta Motel about the metallurgy at Carrapateena and he understood it more than some of his guys did. He answered one of the questions for me,” Gomez recalled this week. ”He is on the ball, you can’t put anything over him.”

While such a tribute might give some OZ shareholders confidence that the acquisition process is in good hands, Burgess admits others are frustrated by the long wait. ”Some shareholders have expressed an impatience, but I think equally they wouldn’t want us to do the wrong thing,” he said. ”If we suddenly got impatient and said we’ve got to do a deal simply because we haven’t done one yet, then that’s the time we will make mistakes. ”In the end it’s better not to do something, than do something that is going to destroy value.”

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