Vedanta Resources PLC
12 April 2005
12th April 2005
Vedanta Resources plc
Production report for the twelve months ended
31 March 2005
Set out below is the production data for the financial year ended 31 March 2005.
Financial results for this period will be released on 2 June.
Existing operations produced well in the second half with a strong fourth
quarter in several areas, notably aluminium. High input costs, mentioned at the
interim results, have continued to be a feature. Production from the Zambian
operations is included for the first time. There is a lot of opportunity at
Konkola but there is also much work to be done on improving output and costs.
The projects remain on track with zinc likely to be commissioned shortly.
Unaudited Production summary
Twelve Months Change 2nd Half Change
('000 t) % ('000 t) %
------------------- ------- ------------------- --------
2004-05 2003-04 2004-05 2003-04
Alumina 278,599 269,778 4% 148,524 136,600 9%
Aluminium 135,949 129,317 5% 70,159 64,317 9%
Copper - Cathode 171,992 178,654 -4% 94,590 85,754 10%
Copper - Rod 125,295 122,703 2% 72,041 63,503 13%
Copper - Cathode 67,547 - 67,547
Zinc - mined
metal content 354,629 330,555 7% 187,447 178,596 5%
Zinc - refined 212,279 220,664 -4% 108,721 111,264 -2%
Both BALCO and MALCO saw higher output in the fourth quarter, with production in
the second half almost 7% above the first half, leading to a 5% increase over
the year. This was the result of improved management of the smelter process and
more stable power production.
Cathode production in the second half was at peak capacity, evenly spread over
the third and fourth quarters, with an increase of 22% over the first half. The
production benefited from an improvement in operational efficiencies and higher
plant availability, which had been affected in the first half of the year by the
planned maintenance shut down and flooding at the refinery during the monsoon.
Cathode production finished the year just 4% below 2004.
The data for Konkola Copper Mines is based on 5 months of production, from the
date of acquisition. Initial assessments indicate issues concerning plant
availability, process management and maintenance. These are being addressed by a
series of actions, following the appointment of a new CEO for our Zambian
operations. The immediate focus is to bring about stability and consistency in
operations. We are taking all necessary measures to improve these operations and
remain positive about the potential to reduce costs and improve production.
The mining output has improved considerably and all the mines have performed
well. Rampura Agucha in particular did better than the previous year due to
de-bottlenecking. This is reflected in an increase in mined metal content of 7%
over the year. The smelter production at Chanderiya is 4% lower than the
previous year due to inconsistent qualities of metcoke, caused by short supply,
which impacted the production process.
Sales of zinc metal at about 290,000 MT will be about 12% higher than 2003-4,
and well above the production number shown here, due to the availability of
additional tonnage from tolling activities and stock reduction.
Pricing & Costs
Prices for aluminium, zinc and copper have continued to be firm. TC/RC's have
also improved and some impact of the increasing TC/RCs have come into the second
half results though their influence will be more pronounced in the financial
year 2005-6. As reported, tariffs on metal prices were reduced by the Government
of India in July 2004 and again in February 2005, and now stand at 10% for
aluminium, copper and zinc. These cuts have reduced the prices realised on metal
sales. Input prices, particularly for energy products, have remained a pressure
throughout the year.
Update on expansions
Vedanta is progressing well on its expansion programme to increase production
of all metals. Over $1bn of the anticipated $2.2bn has been spent to date.
The work on the new 250,000 tpa aluminium smelter and power plant at Korba is
progressing well. Trials on a few smelter pots have started, using third party
alumina and power to stabilize the process and to accelerate use of the
technology. The commissioning of the project will start, in phases, from the
second quarter of this financial year, and remains on track for full
commissioning in March 2006.
Vedanta is building a new 1mtpa alumina refinery in the State of Orissa. The
refinery is due to complete in March 2007 and remains on track and within
budget. Public interest submissions regarding environmental clearances are
currently being addressed.
The expanded facilities at Tuticorin, to take production from capacity of
180,000 tpa to 300,000 tpa, are still awaiting permission.
The expansion at Rampura Agucha mine is complete and commissioning trials are
going on at present. At the captive power plant, both the machines have been
synchronised and we are already producing power to meet the current needs. The
roaster at Chanderiya smelter has been commissioned and other sections of the
plant are under testing.
For further information, please contact:
John Smelt, Head of Investor Relations
Peter Sydney-Smith, Finance Director
Vedanta Resources plc
www.vedantaresources.com Tel: +44 207 659 4734
+44 787 964 2675
Finsbury Tel: +44 207 251 3801
This information is provided by RNS
The company news service from the London Stock Exchange