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Vedanta Resources (VED)

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Thursday 08 October, 2009

Vedanta Resources

Q2 Production results

RNS Number : 4290A
Vedanta Resources PLC
08 October 2009
 



8 October 2009



Vedanta Resources plc

Production Report for the Second Quarter and

Six Months Ended 30 September 2009



Q2 Highlights 

  • Iron ore production of 3.3mt, up 27%

  • Zinc and lead mined metal production operating at rated capacity

  • Aluminium production up 13% 

  • Significant sale of power of 511 million unitsduring the quarter,

  • Scheduled maintenance complete at the Nchanga copper smelter and concentrate feed commenced


Production in the second quarter ended 30 September 2009 ("Q2") was broadly in line with our expectations. Our zinc, copper and aluminium operations in India operated at their rated capacity, whilst our iron ore business performed well considering the seasonal monsoons. In addition, the progressive 

commissioning of the new Jharsuguda aluminium smelter in the quarter has more than offset the impact of the MALCO and BALCO Plant 1 smelter shut downs and we are benefiting from the sale of surplus power from these operations. As previously announced, production during the quarter at the copper business in Zambia was impacted by the planned maintenance shutdown of the new Nchanga smelter in September 2009.

 

Aluminium Business


Aluminium production in Q2 was 120,000 tonnes, 13% higher than the corresponding prior period, due to the progressive commissioning of the 500 ktpa Jharsuguda aluminium smelter. The new smelter 

contributed 56,000 tonnes during the quarterThe second phase of 250ktpa aluminium smelter of the 500ktpa Jharsuguda aluminium smelter is under commissioning for completion by end FY2010Production in the half year ended 30 September 2009 ("H1") was 245,000 tonnes, significantly higher than 

the corresponding prior period despite the complete ramp down of the MALCO and BALCO Plant I smelters. 


The Lanjigarh alumina refinery produced 190,000 tonnes of calcined alumina in Q2 and 378,000 tonnes in H1, significantly higher than 114,000 tonnes and 250,000 tonnes respectively in the corresponding prior periods. Current production levels largely meet our requirements of alumina. The Korba alumina refinery was ramped down consequent to the shut-down of the BALCO Plant 1 smelter. We will be in a position to commence the mining of Niyamgiri bauxite on receipt of final government clearances, now expected in the current financial year. 

 

Construction of the 1.25 mtpa Jharsuguda II aluminium smelter project consisting of 4 (four) pot lines is progressing well with more than 70% of civil works completed. The project is on schedule for first metal tapping from March 2010. Progress on the 3 mtpa alumina refinery expansion project and the 0.6 mtpa de-bottlenecking project at Lanjigarh is on schedule. 


Construction of the new 325 ktpa aluminium smelter project at BALCO is also progressing well and on schedule for first metal tapping from October 2010. Construction at the 1,200MW captive power plant project site has been disrupted following a tragic collapse of a chimney under-construction, in September 2009 during heavy rains and lightning at Korba. A detailed study is underway to determine the exact cause of the accident. At this stage we do not anticipate a material delay in the progressive commissioning of the power plant.


Copper Business ― India and Australia 


Cathode production of 91,000 tonnes in Q2 was significantly higher compared with the corresponding prior period. The production of copper cathode in H1 was 169,000 tonnes, compared with 149,000 tonnes in the corresponding prior period which was impacted by a 26 day bi-annual maintenance shutdown in that period.


Mined metal production at our Australian mine was 5,200 tonnes in Q2 as compared to 5,600 tonnes 

in the corresponding prior quarter. The production during the quarter has been impacted due to mud rush in the mine resulting from unprecedented rainfall in end August 2009. The mining is expected to commence progressively from end October 2009. Production of 12,000 tonnes in H1 was in line with the corresponding prior period.


Copper Business ― Zambia 


KCM produced 35,000 tonnes of copper cathode in Q2, 5% lower than the corresponding prior quarter due to a planned one month shutdown of the new Nchanga smelter for maintenance in September 2009. Work at the smelter is now complete and the concentrate feed resumed. The smelter is currently ramping up and expected to reach normal operations from end October 2009. Production of 78,000 tonnes of copper cathode in H1 was 7% higher than the corresponding period last year and included 25,000 tonnes from the tailings leach plant, 10% higher than the corresponding period last year. 


The Konkola Deep Mine Project is progressing well, for commissioning of the mid shaft loading station by March 2010.


Zinc Business


Mined zinc and lead metal production was 193,000 tonnes in Q2operating at rated capacity, and 375,000 tonnes in H1, higher by 3% and 8% respectively over the corresponding prior periods. The increase was a result of improved performance at mining operations.


Refined zinc production was 141,000 tonnes in Q2, an increase of 16% compared with the corresponding prior period due to improved smelter operational performance. Refined zinc production was 280,000 tonnes in H1, significantly higher when compared with the corresponding prior period.


Refined lead production was 14,000 tonnes in Q2, an increase of 8% compared over the corresponding prior period. Refined lead production in H1 was 31,000 tonnes in line with the corresponding prior period.


Sales in Q2 and H1 was augmented by sales of 22,000 dry metric tonnes and 96,000 dry metric tonnes of surplus zinc concentrate respectively and in Q2 21,000 dry metric tonnes of surplus lead concentrate.

 

Silver production was 1.30 million ounces in Q2, an increase of 58% compared with the corresponding prior periodSilver production in H1 was 2.63 million ounces, an increase of 48over the corresponding prior period.


Rampura Agucha mine expansion from 5mtpa to 6mtpa is on schedule for commissioning by mid 2010. Construction at the 210 ktpa zinc smelter, 100 ktpa lead smelter and 160 MW CPP project at Rajpura Dariba are progressing well. The smelter and CPP projects are on schedule for completion by mid 2010. Work at the mining projects at Sindesar Khurd and Kayar are also on schedule for progressive commissioning from mid 2010.


Iron Ore Business


Production in Q2 was 3.3 million tonnes, an increase of 27% compared with the corresponding quarter of the previous year due to improved efficiencies in mining operationsProduction in H1 was a record 8.2 million tonneshighest ever for any first-half reporting period. 


Dispatches in Q2 and H1 were 1.7 million tonnes and 6.4 million tonnes, an increase of 21% and 39% respectively over corresponding prior periods. Production and dispatches in this period are normally impacted by the seasonal monsoon.


The Dempo acquisition offers significant growth opportunities and is expected to contribute to the volumes in the post monsoon period. 


Power Business


We sold 511 million units and 981 million units of power in Q2 and H1 respectively, significantly higher than the corresponding prior periods


Construction work on the 2,400 MW (4x600 MW) coal based Independent thermal power plant at Jharsuguda is progressing well. The first unit of 600 MW is now expected to get commissioned  

in Q4 FY2010. The remaining units are expected to be progressively commissioned by the end of calendayear 2010.

  Production Summary (Unaudited)

   ( in '000 tonnes, except as stated)


Half year ended 30 September

Quarter ended 30 September

Particulars

2009

2008

Change

2009

2008

Change

Alumina







  Lanjigarh

378

250

51.2%

190

114

66.7%

  Korba/Mettur

40

143

(72.0%)

11

70

(84.3%)

Aluminium

245

206

18.9%

120

106

13.2%

Copper India / Australia







  Copper mined metal content

12

12

-

5

6

(16.7%)

  Copper - Cathodes 

169

149

13.4%

91

81

12.4%

Copper - Zambia







  Copper mined metal content

38

42

(9.5%)

19

21

(9.5%)

  Copper - Cathodes 

78

73

6.9%

35

37

(5.4%)

Zinc and Lead







   Mined metal content

375

346

8.4%

193

188

2.7%

  Zinc -refined 

280

249

12.5%

141

122

15.6%

  Lead -refined 1

31

32

(3.1%)

14

13

7.7%

   Silver (in 000' ounces) 2

2,634

1,775

48%

1,301

823

58%

Iron Ore 







  Saleable Ore 3  

8,204

7,127

15.1%

3,261

2,562

27.3%

Power







  Units sold (in Million)

981

141

595.7%

511

67

662.7%


  • Including captive consumption of 4,000 tonnes vs 2,000 tonnes in H1 FY10 vs H1 FY09 and 2,000 tonnes vs 1,000 tonnes in Q2 FY10 vs Q2FY09

  • Including captive consumption of 710,000 ounces vs 323,000 ounces in H1 FY10 vs H1 FY09 and 326,000 ounces vs 129,000 ounces in Q2 FY10 vs Q2FY09

  • Iron ore is reported on wet tonnes basis




For further information, please contact: 

Sumanth Cidambi                                                     sumanth.cidambi@vedanta.co.in

Director - Investor Relations                                    Tel: +44 20 7659 4732 /+91 22 6646 1531 

Vedanta Resources plc      


Saurabh Kothari                                                        kothari.saurabh@vedanta.co.in

Associate General Manager - Investor Relations     Tel: +91 22 6646 1436

Vedanta Resources plc


Robin Walker                                                             Tel: +44 20 7251 3801

Gordon Simpson 

Finsbury      


About Vedanta Resources plc 

Vedanta Resources plc ("Vedanta") is a London listed FTSE 100 diversified metals and mining major. The group produces aluminium, copper, zinc, lead, iron ore and commercial energy. Vedanta has operations in IndiaZambia and Australia and a strong organic growth pipeline of projects. With an empowered talent pool of 30,000 employees globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information visit www.vedantaresources.com 


Disclaimer 

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 statements. 



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