Vedanta Resources PLC
10 October 2006
10 October 2006
Vedanta Resources plc
Production Report for the Second Quarter and
Six Months Ended 30 September 2006
• Higher aluminium, zinc and Indian copper production volumes
• Full commissioning of BALCO new smelter back on track
• Ongoing exploration at Hindustan Zinc increases reserves
• Acquisition of Sterlite Gold Ltd completed
Production volumes for aluminium, zinc and Copper - India during the six months
ended 30 September 2006 ('H1') were higher than in the corresponding six months
of the previous year due to the progressive commissioning of the new Korba II
smelter and the ramp up of the new Tuticorin and Chanderiya smelters in the
second half of the last financial year.
The de-bottlenecking project at our Tuticorin copper smelter to enhance capacity
to 400,000 tpa is progressing well and will be completed by December 2006. Our
Phase II expansion projects are progressing on schedule with orders for critical
equipment and packages placed. The alumina refinery at Lanjigarh is in the final
run up for commissioning.
Mined metal production at KCM improved as compared to the preceding two
quarters. Refined copper production was lower primarily due to a planned
shutdown of our Nkana smelter.
The inventory build up at the end of the last quarter has been largely sold down
during the current quarter.
On 30 September 2006, we completed the acquisition of 80.8% of Sterlite Gold
The existing plants at BALCO and MALCO continue to operate as per plan and at
their rated capacity. The new Korba smelter produced 44,000 tonnes during this
quarter, taking its total production in H1 to 86,000 tonnes. The impact of the
tripping of the power plant in Korba in May 2006 has been overcome in a very
short span of time due to the sustained and focused work done by our team. A
total of 130 pots that were affected have now been readied and are being
commissioned progressively. As of 30 September 2006, a total of 265 pots were
commissioned and the remaining 23 pots are expected to be commissioned during
October 2006. The performance of the pot room has been improving steadily and we
expect to reach our rated capacity towards the end of this financial year.
The inventory build-up of 13,000 tonnes of metal at the end of the last quarter
has been largely sold down with higher sales during this quarter.
The 1-1.4 mtpa alumina refinery at Lanjigarh is progressing well. We are now in
the final run up for commissioning and expect to charge the bauxite by
January 2007. As previously stated, in respect of the bauxite mine permits, the
matter is still pending with the Central Ministry of Environment and Forests,
which is yet to file their response in the Indian Supreme Court.
Preparatory work for the new 500,000 tpa aluminium smelter at Jharsuguda, Orissa
is progressing well and over two-third of the orders have been awarded. The
first phase of 250,000 tpa is likely to be commissioned by the second half of
2009, as scheduled.
The World Environment Foundation, in association with the Institute of
Directors, India awarded the prestigious Golden Peacock Special Commendation
Award 2006 for Environment Management to BALCO in recognition of its world-class
environment practices. BALCO also won the Greentech Environment Excellence Gold
Award 2006 for the second consecutive year. This award is instituted by the
Greentech Foundation towards outstanding environmental performance, efforts and
commitment to environmental management.
Copper - India and Australia
The copper smelter at Tuticorin performed well with cathode production at 80,000
tonnes during the quarter and 137,000 tonnes in H1. De-bottlenecking of this
smelter to improve rated capacity to 400,000 tpa is on track and we expect this
to be completed on schedule by December 2006. Mined metal production at our
Australian mine was 7,000 tonnes, marginally lower than the corresponding
quarter in FY 2006, due to the planned closure of Thalanga Copper Mines in the
second quarter of last year.
During the quarter, Sterlite's copper operations won the prestigious 'Excellent
Energy Efficient Unit' award instituted by Confederation of Indian Industry for
the sixth time in a row. The copper operations also won the 'Greentech
Environment Excellence Award' instituted by the Greentech Foundation.
Copper - Zambia
Mined metal production during this quarter of 25,000 tonnes was a substantial
improvement over the preceding two quarters and we expect to sustain this trend
in the future. Refined copper production during the quarter was 31,000 tonnes,
lower than the corresponding quarter in the previous year primarily due to the
planned shutdown of Nkana smelter, which reduced output to20,000 tonnes during
this quarter as compared to 27,000 tonnes in the corresponding previous quarter.
We also had a brief setback in the tailings leach plant as a result of a fire
which affected the plant availability and recovery of metal, which have since
Progress on the KDMP expansion project and the Nchanga smelter remains on track,
with orders for major packages having been placed. The smelter construction
activity and the shaft sinking work have both commenced on site and are
progressing as per schedule.
Mined metal production at HZL in H1 at 256,000 tonnes was substantially better
than 220,000 tonnes during the previous period. Production of refined zinc at
161,000 tonnes in H1 was 31% higher compared with the corresponding prior period
output of 123,000 tonnes.
Zinc inventory of 15,000 tonnes at the end of first quarter, has largely been
sold down. During the quarter we also sold surplus zinc concentrate of 90,000
dry metric tonnes.
HZL continues to expand the exploration programme focused around its mining
operations in Rajasthan. As a result of this ongoing expansion programme, the
reserves as of 31 March 2006 have now been reassessed at 53.4 million tonnes and
certified by an independent assessor, up from 48.6 million tonnes reported
The new 170,000 tpa Chanderiya hydro smelter is progressing as per plan and all
major orders have been placed. The project activity is progressing in full swing
and the smelter is on course for expected completion early in 2008.
During the quarter, the Institute of Directors, India awarded the Golden Peacock
Award to HZL, in recognition of HZL setting new standards in training
Production Summary (Unaudited)
(In 000'tonnes, except as stated)
Six Months Ended 30 September Second Quarter Ended 30 September
2006 2005* Change 2006 2005* Change
Alumina 150 142 5.6% 77 71 8.5%
Aluminium 155 82 89.0% 79 46 71.7%
Copper - India/Australia
Mined metal content 15 18 (16.7%) 7 8 (12.5%)
Copper - Cathode 137 124 10.5% 80 68 17.6%
Copper - Rod 87 80 8.8% 47 41 14.6%
Copper - Zambia
Mined metal content 43 54 (20.4%) 25 29 (13.8%)
Copper - Cathode 70 81 (13.6%) 31 37 (16.2%)
Zinc - mined metal 256 220 16.4% 125 106 17.9%
Refined Zinc 161 123 30.9% 79 66 19.7%
Equivalent Gold (oz) 2,828 - - 2,828 - -
*Production quantities of Equivalent Gold disclosed represent the post acquisition period
of one month to 30 September 2006 and are not comparable with the corresponding prior periods.
For further information, please contact:
Sumanth Cidambi email@example.com
Associate Director - Investor Relations Tel: +44 20 7659 4732/+91 22 6646 1531
Vedanta Resources plc
James Murgatroyd Tel: +44 20 7251 3801
About Vedanta Resources plc
Vedanta Resources plc is a London listed diversified metals and mining group.
Its principal operations are located throughout India, with further operations
in Zambia, Australia and Armenia. The major metals produced are aluminium,
copper, zinc, lead and gold. For further information, please visit
This press release contains 'forward-looking statements' - that is, statements
related to future, not past, events. In this context, forward-looking statements
often address our expected future business and financial performance, and often
contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,'
'seeks,' 'should' or 'will.' Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. For us, uncertainties arise
from the behaviour of financial and metals markets including the London Metal
Exchange, fluctuations in interest and or exchange rates and metal prices; from
future integration of acquired businesses; and from numerous other matters of
national, regional and global scale, including those of a political, economic,
business, competitive or regulatory nature. These uncertainties may cause our
actual future results to be materially different that those expressed in our
forward-looking statements. We do not undertake to update our forward-looking
This information is provided by RNS
The company news service from the London Stock Exchange