StockMarketWire.com, Oct 7, 2011
Metals and mining group Vedanta Resources said today that it saw a growth in production in zinc, lead, silver, copper and power in a second quarter in which the acquisition of Cairn India was approved.
Zinc India mined metal production was 210,000 tonnes in Q2 and 398,000 tonnes in H1, up 2% and 3%, respectively, as compared with the corresponding prior periods, reflecting near normal production at Rampura Agucha following the maintenance shutdown in Q1. Ramp-up of the SK mine is on track to achieve its targeted 2 mtpa capacity by the end of the year.
Refined zinc production was 185,000 tonnes in Q2 and 378,000 tonnes in H1, up 5% and 11%, respectively, primarily due to improved operational performance at our hydro smelters. Refined lead production was 17,000 tonnes in Q2 and 33,000 in H1, up 6% and 6%, respectively, primarily due to volumes from the new 100kt Dariba lead smelter, which was commissioned and capitalized during the quarter.
Silver production was 1.58 million ounces in Q2 and 3.09 million ounces in H1, up 12% and 10%, respectively. The new silver refinery is planned to be commissioned in the current quarter. With the ramp up of the SK mine and commissioning of the refinery, silver capacity will reach 16 million ounces by the end of FY2011-12.
Zinc International total equivalent zinc-lead production was 114,000 tonnes in Q2 and 233,000 tonnes in H1, down 2% and up 5%, respectively, as compared with the corresponding prior periods. This comprised production of zinc-lead concentrate of 77,000 tonnes MIC in Q2 and 157,000 tonnes MIC in H1 at Black Mountain and Lisheen, and refined zinc production of 37,000 tonnes in Q2 and 76,000 tonnes in H1 at Skorpion.
During Q2, iron ore sales were 1.55 mt as compared with 1.82 mt (1.37 mt excluding Orissa) in the corresponding prior quarter. During H1, sales were 5.80 mt as compared with 6.71 mt (5.65 mt excluding Orissa) in the corresponding prior period. Sales were benefitted by higher volumes at Karnataka prior to the imposition of the Karnataka mining ban.
On 26th August 2011, the Supreme Court ordered a ban on iron ore mining and direct sales in Karnataka. The Court has currently ordered a study by government agencies and also allowed the sale of inventory by e-auction through appointed agency.
At Karnataka, Vedanta sold 0.71 mt of iron ore in Q2, and 1.81 mt of iron ore in H1, as compared with 0.45 mt and 0.95 mt in the corresponding prior periods. At Goa, we sold 0.83 mt of iron ore in Q2, and 3.98 mt of iron ore in H1, as compared with 0.92 mt and 4.71 mt in the corresponding prior periods.
During Q2, iron ore production was 1.12 mt as compared with 2.88 mt (2.43 mt excluding Orissa) in the corresponding prior quarter due to the ban on mining in Karnataka announced on 26 August 2011, the discontinuation of operations at Orissa in November 2010, and most importantly, the planned reduction in inventories. During H1, production was 5.51 mt as compared with 8.61 mt (7.61 mt excluding Orissa) in the corresponding prior period.
In August 2011, Vedanta completed the acquisition of a 51% stake in three iron ore assets in Liberia, with 1 billion tonnes of R&R, for a consideration of $90m. Sesa Goa will work on developing these assets in the emerging iron ore hub of Western Africa.
During Q2, the Tuticorin copper smelter produced 87,000 tonnes of copper cathode, 28% higher than the corresponding prior quarter. Production in the prior year period was lower on account of a planned bi-annual maintenance shut-down. During H1, production of copper cathode was up 11% at 161,000 tonnes.
Mined metal production at Australia was 5,000 tonnes in Q2 and 11,000 tonnes in H1. Construction of the 160 MW captive power plant at Tuticorin is in progress and the first unit is scheduled for commissioning in Q4 FY2011-12. The 400 ktpa copper smelter expansion project at Tuticorin is awaiting approval.
Following the submission of the NEERI (National Environmental Engineering Research Institute) report and comments of the State Government and the State Pollution Control Board, the Supreme Court has reserved its order on interim directions.
Zambia mined metal production was 28,000 tonnes in Q2 and 52,000 tonnes in H1, up 27% and 12%, respectively, as compared with the corresponding prior periods. Higher production at the Nchanga mine is the result of various improvement initiatives, which have increased concentrator throughput. Production at the tailings leach plant (TLP) was 11,000 tonnes in Q2 as compared with 15,000 tonnes in corresponding prior quarter, primarily due to lower grades caused by revised life of mine plan at Fitwaola.
Production of copper cathodes was 52,000 tonnes in Q2 and 102,000 tonnes in H1. Integrated production was 2% higher at 33,000 tonnes in Q2, on account of higher mine production, which was partially offset by lower production from the TLP. Production from custom smelting was 19,000 tonnes in Q2 as compared with 26,000 tonnes in corresponding prior quarter, due to lower availability of concentrate.
At KDMP, the shaft number 4 has been sunk to its final depth, and shaft equipping work for bottom shaft loading is on track for completion by Q3 FY2012-13.
Aluminium production in H1 was 322,000 tonnes, 7% higher than the corresponding prior period. Aluminium production in Q2 was 8% lower at 149,000 tonnes post the pot outage in Q1 at the 500 ktpa Jharsuguda-I smelter. The Korba smelter continues to operate above its rated capacity. Aluminium costs were higher due to pot relining and higher coal prices.
Alumina production at Lanjigarh was 228,000 tonnes in Q2 and 451,000 tonnes in H1, up 33% and 20%, respectively, as compared with the corresponding prior periods.
The first unit of the BALCO 1,200 MW (4x300 MW) captive power plant is now expected to be synchronised in Q3 FY2011-12 and work on the other units is progressing as planned. The 325 ktpa Korba smelter construction is progressing well and first metal tapping is expected in Q4 FY2011-12.
The 1.25 mtpa Jharsuguda-II smelter project is in final stages of completion, and we continue to evaluate the option of selling power versus producing aluminium at this smelter.
Vedanta sold 1,435 million units of power in Q2 as compared with 267 million units in the corresponding prior quarter. It sold 2,851 million units of power in H1, compared with 553 million units in corresponding prior period. The significant increase was mainly due to power sales from the new 2,400 MW power plant at Jharsuguda. However, coal supplies to Jharsuguda were adversely affected due to heavy rainfall in the coal belt, affecting our ability to generate power at our rated capacity. While the group is currently seeing higher power tariffs, H1 saw lower tariffs despite higher coal prices.
The third unit of the Jharsuguda 2,400 MW (4x600 MW) power project is expected to be commissioned in Q3 FY2011-12. Work on the Talwandi Sabo supercritical power project is progressing as scheduled. 105 MW of the 150 MW wind power expansion project has been commissioned by H1, and the balance 45 MW is expected to be completed in the current quarter. Story provided by StockMarketWire.com
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