10th Oct 2006 07:00
Vedanta Resources PLC10 October 2006 10 October 2006 Vedanta Resources plc Production Report for the Second Quarter and Six Months Ended 30 September 2006 Highlights • 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 Performance Summary Production volumes for aluminium, zinc and Copper - India during the six monthsended 30 September 2006 ("H1") were higher than in the corresponding six monthsof the previous year due to the progressive commissioning of the new Korba IIsmelter and the ramp up of the new Tuticorin and Chanderiya smelters in thesecond half of the last financial year. The de-bottlenecking project at our Tuticorin copper smelter to enhance capacityto 400,000 tpa is progressing well and will be completed by December 2006. OurPhase II expansion projects are progressing on schedule with orders for criticalequipment and packages placed. The alumina refinery at Lanjigarh is in the finalrun up for commissioning. Mined metal production at KCM improved as compared to the preceding twoquarters. Refined copper production was lower primarily due to a plannedshutdown of our Nkana smelter. The inventory build up at the end of the last quarter has been largely sold downduring the current quarter. On 30 September 2006, we completed the acquisition of 80.8% of Sterlite GoldLtd's shares. Aluminium The existing plants at BALCO and MALCO continue to operate as per plan and attheir rated capacity. The new Korba smelter produced 44,000 tonnes during thisquarter, taking its total production in H1 to 86,000 tonnes. The impact of thetripping of the power plant in Korba in May 2006 has been overcome in a veryshort span of time due to the sustained and focused work done by our team. Atotal of 130 pots that were affected have now been readied and are beingcommissioned progressively. As of 30 September 2006, a total of 265 pots werecommissioned and the remaining 23 pots are expected to be commissioned duringOctober 2006. The performance of the pot room has been improving steadily and weexpect 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 quarterhas 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 inthe final run up for commissioning and expect to charge the bauxite byJanuary 2007. As previously stated, in respect of the bauxite mine permits, thematter 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, Orissais progressing well and over two-third of the orders have been awarded. Thefirst phase of 250,000 tpa is likely to be commissioned by the second half of2009, as scheduled. The World Environment Foundation, in association with the Institute ofDirectors, India awarded the prestigious Golden Peacock Special CommendationAward 2006 for Environment Management to BALCO in recognition of its world-classenvironment practices. BALCO also won the Greentech Environment Excellence GoldAward 2006 for the second consecutive year. This award is instituted by theGreentech Foundation towards outstanding environmental performance, efforts andcommitment to environmental management. Copper - India and Australia The copper smelter at Tuticorin performed well with cathode production at 80,000tonnes during the quarter and 137,000 tonnes in H1. De-bottlenecking of thissmelter to improve rated capacity to 400,000 tpa is on track and we expect thisto be completed on schedule by December 2006. Mined metal production at ourAustralian mine was 7,000 tonnes, marginally lower than the correspondingquarter in FY 2006, due to the planned closure of Thalanga Copper Mines in thesecond quarter of last year. During the quarter, Sterlite's copper operations won the prestigious "ExcellentEnergy Efficient Unit" award instituted by Confederation of Indian Industry forthe sixth time in a row. The copper operations also won the "GreentechEnvironment Excellence Award" instituted by the Greentech Foundation. Copper - Zambia Mined metal production during this quarter of 25,000 tonnes was a substantialimprovement over the preceding two quarters and we expect to sustain this trendin the future. Refined copper production during the quarter was 31,000 tonnes,lower than the corresponding quarter in the previous year primarily due to theplanned shutdown of Nkana smelter, which reduced output to20,000 tonnes duringthis 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 firewhich affected the plant availability and recovery of metal, which have sincebeen restored. Progress on the KDMP expansion project and the Nchanga smelter remains on track,with orders for major packages having been placed. The smelter constructionactivity and the shaft sinking work have both commenced on site and areprogressing as per schedule. Zinc Mined metal production at HZL in H1 at 256,000 tonnes was substantially betterthan 220,000 tonnes during the previous period. Production of refined zinc at161,000 tonnes in H1 was 31% higher compared with the corresponding prior periodoutput of 123,000 tonnes. Zinc inventory of 15,000 tonnes at the end of first quarter, has largely beensold down. During the quarter we also sold surplus zinc concentrate of 90,000dry metric tonnes. HZL continues to expand the exploration programme focused around its miningoperations in Rajasthan. As a result of this ongoing expansion programme, thereserves as of 31 March 2006 have now been reassessed at 53.4 million tonnes andcertified by an independent assessor, up from 48.6 million tonnes reportedearlier. The new 170,000 tpa Chanderiya hydro smelter is progressing as per plan and allmajor orders have been placed. The project activity is progressing in full swingand the smelter is on course for expected completion early in 2008. During the quarter, the Institute of Directors, India awarded the Golden PeacockAward to HZL, in recognition of HZL setting new standards in trainingexcellence. 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%contentRefined 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 periodof one month to 30 September 2006 and are not comparable with the corresponding prior periods. For further information, please contact: Sumanth Cidambi [email protected] Director - Investor Relations Tel: +44 20 7659 4732/+91 22 6646 1531Vedanta Resources plc James Murgatroyd Tel: +44 20 7251 3801Robin WalkerFinsbury 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 operationsin Zambia, Australia and Armenia. The major metals produced are aluminium,copper, zinc, lead and gold. For further information, please visitwww.vedantaresources.com. Disclaimer This press release contains "forward-looking statements" - that is, statementsrelated to future, not past, events. In this context, forward-looking statementsoften address our expected future business and financial performance, and oftencontain words such as "expects," "anticipates," "intends," "plans," "believes,""seeks," "should" or "will." Forward-looking statements by their nature addressmatters that are, to different degrees, uncertain. For us, uncertainties arisefrom the behaviour of financial and metals markets including the London MetalExchange, fluctuations in interest and or exchange rates and metal prices; fromfuture integration of acquired businesses; and from numerous other matters ofnational, regional and global scale, including those of a political, economic,business, competitive or regulatory nature. These uncertainties may cause ouractual future results to be materially different that those expressed in ourforward-looking statements. We do not undertake to update our forward-lookingstatements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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