Portman scraps dividends

IRON ore miner Portman has confirmed it will scrap dividend payments to pay for its expansion projects, which have been affected by substantial cost increases. Managing director Richard Mehan, who took the position after US company Cleveland-Cliffs acquired 80 per cent of Portman, said the board decided at its last meeting against paying an interim dividend. “My expectation is that there will not be a (final) dividend for 2005 given the expansion of Koolyanobbing and also our desire to become more active in business development,” he said. Like many other companies, Portman said its current operations and future expansion have been affected by skills shortages and higher mining and haulage costs. Mr Mehan said the cost of the Koolyanobbing expansion had increased from $55 million to the “mid 60s” partly because of design changes but mainly because of higher costs. His comments follow the recent announcement of a big increase in half-year net profit to $46.4 million from $17 million in the previous corresponding period. This was attributed to higher iron ore prices and higher tonnages.