Logistics and Supply Chain Activities for Newcrest Mining Limited

This study aims to develop a vivid understanding of the logistics and supply chain activities for Newcrest Mining Limited. It includes the discussion of its business nature, type of products, major customers, number of employees, management style, organizational structure, financial position and types of facilities.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
Name of Student:
Name of University:
Author’s Note:

1SUPPLY CHAIN MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Background information of the chosen company............................................................................3
Discussing the nature of business................................................................................................3
Types of product..........................................................................................................................4
Major customers of Newcrest Mining.........................................................................................4
Discussion on employees.............................................................................................................4
Management style........................................................................................................................5
Organizational structure...............................................................................................................5
Financial position.........................................................................................................................6
Number and types of facilities...................................................................................................13
Discussion on the supply chain structure of the chosen company.................................................14
Distribution chain map..............................................................................................................14
Contract......................................................................................................................................15
Discussion on sourcing of materials and services, producing goods/services...............................16
Discussing the existing system..................................................................................................16
Suggesting improvement...........................................................................................................16
Discussing the demand management and inventory system involved...........................................17
Existing system..........................................................................................................................17
Suggesting improvement...........................................................................................................17
Conclusion.....................................................................................................................................17
References......................................................................................................................................19

2SUPPLY CHAIN MANAGEMENT
Introduction
The discourse of the study aims to develop a vivid understanding of the logistics and
supply chain activities for “Newcrest Mining Limited”. The background information of the
company will include the discussion of its business nature, type of products, major customers,
number of employees, management style, organizational structure, financial position and types of
facilities. The next section of the study will include the supply-chain structure for “Newcrest
Mining Limited” which will be able to demonstrate the map for its distribution chain. The third
section of the discourse will include discussion on the sourcing materials, services and producing
goods. The subsections will comprise of the discussion on the existing system and suggest
improvement at the same time. The various types of demonic management and inventory
management system will evaluate the existing inventory system involved and suggest
improvement accordingly.
Background information of the chosen company
Discussing the nature of business
Newcrest headquartered in Melbourne considered as the largest gold producer which is
listed on the: Australian Securities Exchange” and one of the “world's largest gold mining
companies”. The main mission of the company to deliver superior returns from findings,
operations and developing of gold/copper mines. The company owns its portfolio of
predominantly low-cost, long life mines along with a strong pipeline of “brownfield and
greenfield exploration projects”. The reserve and the resources are considerably strong with
more than 25 years of production experience at current rates. The asset portfolio of the company
uses a variety of efficient method of mining for the large ore bodies, selected together with
various types of underground mining methods for optimizing of high-grade epithermal deposits.
The mines are mostly located in “Australia, Papua New Guinea (PNG), Indonesia, and Côte
d’Ivoire”. The present operations of the company include “Cadia Valley Operations (New South
Wales, Australia)”, “Telfer (Western Australia)”, “Gosowong (Halmahera Island, Indonesia)”,
“Lihir (New Ireland Province, PNG)” and “Bonikro (Côte d’Ivoire)”. The discovery of the new
ore bodies is identified as the most significant aspect of Newcrest’s strategy. In addition to this,
the company has been successful in maintaining a strong and successful exploration track record.

3SUPPLY CHAIN MANAGEMENT
The key objective of the exploration strategy includes, securing large mineral districts/provinces
for establishing the scope for future operations and enhancing the future discoveries.
Types of product
The company’s main produce includes gold and copper in Australia situated at the
“Ridgeway (Cadia Valley Operations)”. It has been further discerned that the second most
important Australia operation is considered with “Telfer Mine in the Pilbara region of Western
Australia”. Some of the other production zones include two mines situated in “Papua New
Guinea, Lihir and Hidden Valley” and one each in “Ivory Coast (Bonikro) and Indonesia
(Gosowong)”. Based on the financial statement published in 2017, the total mine production is
depicted to be 18853 thousand tonnes in Cadia, Located in central west “New South Wales,
Australia”. Some of the other significant quantities of production is observed with Lihir Located
on the island of Niolam with a total mine production of 30069 thousand tonnes. Furthermore,
Telfer gold-copper mine located in the “Great Sandy Desert in Western Australia” has a total
mine production of 34144 thousand tonnes.
Major customers of Newcrest Mining
The main revenue from the contracts is depicted to be arising from contracts with the
customers. The main customers of the company have been identified with major companies
require copper for construction works. In addition to this, the electronics making companies in
Australia such as ASKO, Electrolux and Fisher & Paykel how considered are some of the most
significant customers of Newcrest. Some the various types of other customer profile include
Australia Pacific electric cables. In addition to this some of the other cable companies such as
Bambach Wires & Cables, Tycab Australia, NAN cables and Nexans Olex are some of the most
significant customers of Newcrest for buying copper and refurbishing it to their cables.
Customers of gold production is recognized with companies such as Shiels Jewellers, Michael
Hill Colonnades, Tiffany & Co., Zamels Jewellery Australia and Wallace Bishop Jewellers
(Newcrest.com.au, 2018).
Discussion on employees
As per the report published by Forbes Global 2000 List Newcrest Mining Limited is
recognized with a total market capital of $ 14 Billion and an employee strength of 1,544
employees. It has been discerned that during the financial year 2017 Newcrest introduced new

4SUPPLY CHAIN MANAGEMENT
“Healthy Living program at Lihir designed to help Lihir’s 4,500 strong workforce take charge of
their personal health, with more than 3,400 of the workforce already receiving a personal health
consultation”. The main intention of launching the program was to make aware of the existing
employees about the importance of Healthy Living program. The main standards incorporated by
the company has encouraged diversity and included addressing specific barriers to the
employees. The flexible work practices standards have allowed the employees to adopt flexible
working practices for supporting a wide variety of professional and personal circumstances.
Moreover, the work place behavior standard always looks forward to ensure that the workplace
is free from “discrimination, harassment, bullying and victimization”. This allows the employees
to understand appropriate workplace behavior thereby building a productive workplace
environment (Newcrest.com.au, 2018).
Management style
The management style for Newcrest Mining is identified to be democratic in nature. The
rationale for such a style is seen with the different types of long-term decisions which are
particularly well suited to gaining employee buy-in. This is further identified as a collaborative
process where the employees and the management work together to create a vision. Some of the
most vivid democratic evidences are found with conducting open forums among various levels in
the organization. It is further discerned that the board takes an active role in governance and
oversight of remuneration policies and responsible for making sure the company’s remuneration
strategy aligns with the short and long-term business objectives of Newcrest. The democracy
aspect in the remuneration strategy is identified with attracting and retaining “high performing
Executives (including by providing sign-on grants where appropriate to attract key talent)”. It is
for the scene with providing appropriate levels of “at risk” performance for encouraging,
recognizing and rewarding high-performance. It is further discerned that the incorporation of the
business performance measures aligns with the performance incentives with long-term interest of
the shareholders.
Organizational structure
The organization structure includes Sandeep Biswas as the “Managing Director and Chief
Executive Officer” of the company along with Peter Hay and Philip Aiken Am as the
independent nonexecutive Chairman and director. It has been further noted that Gerard Bond is

5SUPPLY CHAIN MANAGEMENT
the “Finance Director and Chief Financial Officer”. Some of the other hierarchies of the
organizational structure includes Roger Higgins, Lady Winifred Kamit and Rick Lee Am as the
Independent Non-Executive Director. Some of the other board of director includes Xiaoling Liu,
Vickki Mcfadden and John Spark as some of the other independent non-Executive Director
(Titman et al., 2017).
Financial position
Comparison of Consolidated Income Statements
Particulars
Newcrest
Mining
2017
Newcrest
Mining
2016
Percentage of
the total
income
Revenues 3477 3295 106%
Profit for the
Period 319 335 95%
Comparison of Statement of Financial Position
Particulars
Newcrest
Mining
2017
Newcrest
Mining
2016
Percentage of
the total
income
Total Assets 11583 11191 104%
Capital
Expenditure 7534 7120 106%

6SUPPLY CHAIN MANAGEMENT
Newcrest Mining
2017
Newcrest Mining
2016
Percentage of the
total income
0
500
1000
1500
2000
2500
3000
3500
4000
3477 3295
1.0552352048558
4
319 335 0.9522388059701
49
Comparison of Income Statements
Revenues Profit for the Period
Newcrest Mining
2017
Newcrest Mining
2016
Percentage of the
total income
0
2000
4000
6000
8000
10000
12000
14000
11583 11191
1.03502814761
862
7534 7120
1.05814606741
573
Comparison of Statement of Financial Position
Total Assets Capital Expenditure
Profitability Ratio Analysis: -
Newcrest Mining
Particulars 2017 2016
Revenue (A) 3477 3295
Net Profit/Loss after Tax (D) 319 335

7SUPPLY CHAIN MANAGEMENT
Ordinary Equity(H) 7534 7120
Total Assets (G) 11583 11191
Net Profit Margin (D/A) 9.17% 10.17%
Return on Equity (A/H)) 4.23% 4.71%
Return on Assets (G/D) 2.75% 2.99%
2017 2016
3.90%
4.00%
4.10%
4.20%
4.30%
4.40%
4.50%
4.60%
4.70%
4.80%
4.23%
4.71%
Return on Equity
Newcrest Mining
2017 2016
8.60%
8.80%
9.00%
9.20%
9.40%
9.60%
9.80%
10.00%
10.20%
10.40%
9.17%
10.17%
Net Profit Margin
Newcrest Mining

8SUPPLY CHAIN MANAGEMENT
2017 2016
2.60%
2.65%
2.70%
2.75%
2.80%
2.85%
2.90%
2.95%
3.00%
3.05%
2.75%
2.99%
Return on Assets
Newcrest Mining
Efficiency Ratios Analysis
Newcrest Mining
Particulars 2017 2016
Cost of Goods
Sold(A) 2609 2601
Inventory (H) 1125 1170
Revenue (A) 3477 3295
Total Assets
(G) 11583 11191
Inventory
Turnover
Ratio (A/H)) 2.32 2.22
Total Asset
Turnover
Ratio (A/G) 0.30 0.29

9SUPPLY CHAIN MANAGEMENT
2017 2016
0.29
0.30
0.31
0.30
0.29
Total Asset Turnover Ratio
Newcrest Mining
2017 2016
2.16
2.18
2.20
2.22
2.24
2.26
2.28
2.30
2.32
2.34 2.32
2.22
Inventory Turnover Ratio
Newcrest Mining
Short-Term Liquidity Ratio Analysis: -
Newcrest Mining
2017 2016
Total Current Assets (A) 1249 803
Receivables (D) 88 134
Cash and equivalents (B) 492 53
Total Current Liabilities (F) 664 670
Current Ratio (A/F) 1.88 1.20

10SUPPLY CHAIN MANAGEMENT
Quick Ratio [(B+D)/F) 0.87 0.28
2017 2016
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00 1.88
1.20
Current Ratio
Newcrest Mining
2017 2016
0.00
0.20
0.40
0.60
0.80
1.00 0.87
0.28
Quick Ratio
Newcrest Mining
Debt Equity Ratio
Newcrest Mining
2017 2016

11SUPPLY CHAIN MANAGEMENT
Total Liabilities (A) 4049 4071
Total Assets (B) 11583 11191
Total Equity (C ) 7534 7120
Debt-to-total Assets Ratio (A/B) 0.35 0.36
Debt to Equity Ratio (A/C) 0.54 0.57
2017 2016
0.52
0.53
0.54
0.55
0.56
0.57
0.58
0.54
0.57
Debt Equity Ratio
Newcrest Mining

12SUPPLY CHAIN MANAGEMENT
2017 2016
0.34
0.35
0.36
0.37
0.35
0.36
Debt-to-total Assets Ratio
Newcrest Mining
Number and types of facilities
Based on the depictions made from annual report publishing on 2017, there are seven
major mining facilities which are currently operational in nature. Firstly, Cadia is identified as an
underground mining facility situated in “central west New South Wales, Australia”, 25
kilometres “south-west of Orange and 250 kilometres west of Sydney”, C”adia has one of the
deepest panel caves in the world and is 100 percent owned by Newcrest”. The second mining
source is identified with Lihir is an open pit mine and known as world’s one of the largest gold
deposits fully owned by the company and located near “Niolam which is part of the Lihir group
of islands, 900 kilometres north-east of Port Moresby in the New Ireland Province of Papua New
Guinea (PNG)”. In addition to this, Telfer is recognized as an open pit and underground mine
operating since 1977 and hundred percent owned by Newcrest. This gold-copper mine is situated
in "Great Sandy Desert in Western Australia, approximately 400 kilometres south-east of Port
Hedland". The fourth facility of the company is recognized with Gosowong is an underground
mine situated in “Halmahera Island, Indonesia, Gosowong is operated by PT Nusa Halmahera
Minerals”. The fourth mine Bonkiro is an open pit facility which is located approximately 150
km not first “250 kilometres north west of Abidjan in Côte d’Ivoire, Bonikro is a gold mine
89.89 percent owned by Newcrest”. The sixth and the seventh facility is recognized with Wafi-

13SUPPLY CHAIN MANAGEMENT
Golpu and Namosi which are still being studied with the research team of Newcrest (Hazen et
al., 2014).
Discussion on the supply chain structure of the chosen company
Distribution chain map
The distribution chain of the company has been segregated into three categories namely
operation, advanced project and exploration project. The mines have been identified to be
located in “Australia, Papua New Guinea, Indonesia, and in Cote d’Ivoire, West Africa”. It has
been further discerned that the operation mines are situated in Gosowong, Hidden Valley, Telfer,
Lihir and Bonkiro. The advanced project is discerned with Wafi- Golpu and Namosi region. In
addition to this, the exploration project is located in Wailevu West region.
Figure: Distributing chain for Newcrest Mining
(Source: Newcrest.com.au, 2018)

14SUPPLY CHAIN MANAGEMENT
Contract
The purchase of a contract consists of the necessity policies for contract formation,
interpretations, agreement to supply goods, packaging, product information, dispatch and
delivery of goods and variations in services.
Figure: Newcrest Supplier Contract
(Source: Newcrest.com.au, 2018)

15SUPPLY CHAIN MANAGEMENT
Discussion on sourcing of materials and services, producing goods/services
Discussing the existing system
“Newcrest’s Supply and Logistics function” is accountable for procurement and sourcing.
The main goal of the companies to ensure that the supply chain transactions adhere to the
company policies and standards. It aims to establish relationships to the “mutual benefit of all
parties and establishment of “business dealings and agreements that are satisfactory to both
Newcrest and the supplier” (Wisner, Tan & Leong, 2014).
The existing system of the company for sourcing of materials is seen with conducting the
mining operations on its own. It needs to be further discerned that the existing system includes of
efficient method of mining for the large ore bodies, selected together with various types of
underground mining methods for optimizing of high-grade epithermal deposits. The mines are
mostly located in “Australia, Papua New Guinea (PNG), Indonesia, and Côte d’Ivoire”. The
present operations of the company include “Cadia Valley Operations (New South Wales,
Australia)”, “Telfer (Western Australia)”, “Gosowong (Halmahera Island, Indonesia)”, “Lihir
(New Ireland Province, PNG)” and “Bonikro (Côte d’Ivoire)”.
Suggesting improvement
Being involved in mining operation the company has to deal with several issues
associated to pollution, environmental degradation, health hazards and depletion of natural
resources. The main areas of improvement in terms of the supply chain is seen with following a
policy of green supplies and management which will take into consideration “delivering products
and services from suppliers, manufacturers to end customers through material flow, information
flow and cash flow in the context of environment” (Fahimnia, Sarkis & Davarzani, 2015). The
process design of the supply chain needs to follow lean principles that will ensure that the
companies able to keep the waste to the minimum extent possible and at the same time improve
efficiency and delivery of the products (Monczka et al., 2015).

16SUPPLY CHAIN MANAGEMENT
Discussing the demand management and inventory system involved
Existing system
As per the present inventory system the changes in metal prices will create significant
deviations in Newcrest’s gold and copper inventory. In worst cases, “Newcrest curtailing or
suspending its exploration activities, with the result that depleted Ore Reserves may not be
replaced and/or unmined Ore Reserves or Mineral Resources may not be mined” (Brandenburg
et al., 2014).
Suggesting improvement
Some of the major suggestions to improve the present situation would involve proposing
changes to the project development are acceleration or abandonment of the current or future
project development. The changes should also take place in terms of the estimation of
recoverable amount of assets of the company while assessment of potential accounting
impairment for those assets. Different types of the improvement activities need to be brought in
as per improving the forecast of daily demand and supply of the materials for the customer such
as ASKO, Electrolux and Fisher & Paykel (Christopher, 2016).
Conclusion
The main business activities of the company is recognized with maintaining a portfolio of
low-cost, long life mines along with a strong pipeline of “brownfield and greenfield exploration
projects”. The reserve and the resources are considerably strong with more than 25 years of
production experience at current rates. . Some the various types of other customer profile include
Australia Pacific electric cables. In addition to this some of the other cable companies such as
Bambach Wires & Cables, Tycab Australia, NAN cables and Nexans Olex are some of the most
significant customers of Newcrest for buying copper and refurbishing it to their cables. The
management style for Newcrest Mining is identified to be democratic in nature. The rationale for
such a style is seen with the different types of long-term decisions which are particularly well
suited to gaining employee buy-in. The financial analysis has depicted that the company has
been able to position itself in a better way in compared to the previous year. distribution chain of
the company has been segregated into three categories namely operation, advanced project and
exploration project. The mines have been identified to be located in “Australia, Papua New

17SUPPLY CHAIN MANAGEMENT
Guinea, Indonesia, and in Cote d’Ivoire, West Africa”. It has been further discerned that the
operation mines are situated in Gosowong, Hidden Valley, Telfer, Lihir and Bonkiro. It has been
also noted that the main areas of improvement in terms of the supply chain is seen with
following a policy of green supplies and management which will take into consideration
“delivering products and services from suppliers, manufacturers to end customers through
material flow, information flow and cash flow in the context of environment”.

18SUPPLY CHAIN MANAGEMENT
References
Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for
sustainable supply chain management: Developments and directions. European Journal
of Operational Research, 233(2), 299-312.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Fahimnia, B., Sarkis, J., & Davarzani, H. (2015). Green supply chain management: A review and
bibliometric analysis. International Journal of Production Economics, 162, 101-114.
Hazen, B. T., Boone, C. A., Ezell, J. D., & Jones-Farmer, L. A. (2014). Data quality for data
science, predictive analytics, and big data in supply chain management: An introduction
to the problem and suggestions for research and applications. International Journal of
Production Economics, 154, 72-80.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and
supply chain management. Cengage Learning.
Newcrest.com.au. (2018) http://www.adenergy.com.au/, A. (2018). Our business | Newcrest
Mining Limited . Newcrest.com.au. Retrieved 1 May 2018, from
http://www.newcrest.com.au/our-business
Newcrest.com.au. (2018) http://www.adenergy.com.au/, A. Company policies | Newcrest Mining
Limited . [online] Newcrest.com.au. Available at: http://www.newcrest.com.au/about-
us/company-policies [Accessed 1 May 2018].
Newcrest.com.au. (2018). http://www.adenergy.com.au/, A Suppliers | Newcrest Mining
Limited . [online] Newcrest.com.au. Available at: http://www.newcrest.com.au/suppliers
[Accessed 1 May 2018].
Newcrest.com.au. (2018). Retrieved 1 May 2018, from
http://www.newcrest.com.au/media/our_business/Maps/asia_pac_map.jpg

19SUPPLY CHAIN MANAGEMENT
Newcrest.com.au. (2018). Retrieved 1 May 2018, from
http://www.newcrest.com.au/media/suppliers/Purchase_Order_Standard_Terms_and_Co
nditions.pdf
Titman, S., Keown, A. J., & Martin, J. D. (2017). Financial management: Principles and
applications. Pearson.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A
balanced approach. Cengage Learning.