6th Aug 2008 07:00
6 August 2008
Eurasian Natural Resources Corporation PLC
Production Report for the Second Quarter ended 30 June 2008
London - Eurasian Natural Resources Corporation PLC ('ENRC' or, together with its subsidiaries, the 'Group'), the holding company of a leading diversified natural resources group based in Kazakhstan, today announces its Production Report for the second quarter ended 30 June 2008.
The information set out below, unless stated otherwise, relates to the three months ended 30 June 2008, and is compared to the corresponding three months of 2007. Within the Ferroalloys Division production volumes, unless otherwise stated, exclude Serov, which was acquired by the Group on 4 April 2008.
All references to 't' in the Production Report are to metric tonnes unless otherwise stated.
In the quarter ended 30 June 2008 production volumes across the Group increased compared to the second quarter of 2007. Ore grades remained broadly consistent with the corresponding period.
Ferroalloys Division production volumes increased (excluding Serov):
2.0% for saleable chrome ore;
34.2% for manganese concentrate; and
2.5% for total ferroalloys, including a 3.8% increase in high-carbon ferrochrome production.
Serov added saleable chrome ore production of 34 thousand tonnes and total ferroalloys production of 70 thousand tonnes.
Iron Ore Division production volumes increased:
6.1% for iron ore extraction;
2.6% for primary concentrate; and
2.1% for saleable ore.
Alumina and Aluminium Division production volumes increased:
7.1% for bauxite extraction; and
4.7% for saleable alumina.
Aluminium production commenced at the end of 2007. The Division produced
27 thousand tonnes of aluminium in the quarter ended 30 June 2008.
Energy Division production volumes increased 12.2% for coal mined and 0.9% for electricity generated.
Logistics Division tonnage of goods transported by railway increased 3.1%.
Dr Johannes Sittard, Chief Executive Officer, said, "We are pleased to report overall growth in both production and saleable volumes, in line with our expectations. In addition to good organic production growth, our second quarter production performance benefited from the acquisition of Serov, a Russian ferroalloy producer, and the continued build up of Phase 1 of the aluminium smelter, which reached its full operating capacity ahead of schedule.
In the second half of 2008, we expect continued organic growth across all divisions, and upon completion of the acquisition of a 50% stake in the 'Tuoli' ferroalloy plant in China we will benefit from additional ferrochrome production volumes. The completion of planned maintenance in the Iron Ore Division will ensure our annual production growth targets are met.
We continue to advance the implementation of our capital expenditure programme which will further enhance the Group's organic growth, the effects of which will be evident from 2010 onwards."
ENRC
|
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Mounissa Chodieva
|
+44 (0) 20 7389 1879
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James S Johnson
Marianna Adams
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+44 (0) 20 7389 1862
+44 (0) 20 7389 1886
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M: Communications
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|
Hugh Morrison
|
+44 (0) 20 7153 1534
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Edward Orlebar
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+44 (0) 20 7153 1523
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Julia Kalcheva
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+44 (0) 20 7153 1517
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About ENRC
ENRC is the holding company of a leading diversified natural resources group with integrated mining, processing, energy, logistical, and marketing operations. ENRC is the world's largest producer of ferrochrome, based on chrome content, the world's sixth largest iron ore exporter by volume and the world's fifth largest supplier of traded alumina by volume (CRU and Heinz H. Pariser, 2006 data). The Group's revenue was US$4,106 million for the year ended 31 December 2007 (2006: US$3,256 million) and EBITDA before exceptional items was US$1,906 million (2006: US$1,256 million); EBITDA for the year ended 31 December 2007 was US$1,724 million (2006: US$1,250 million). For further information please see the Group's website at www.enrc.com.
Forward looking statement
This announcement includes forward-looking statements that reflect the current views of the management of the Group with respect to future events. These forward-looking statements include matters that are not historical facts or are statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies, and the industries in which the Group operates. Forward-looking statements are based on current plans, estimates and projections, and therefore too much reliance should not be placed upon them. Such statements are subject to risks and uncertainties, most of which are difficult to predict and generally beyond the Group's control. The Group cautions you that forward-looking statements are not guarantees of future performance and that if risks and uncertainties materialise, or if the assumptions underlying any of these statements prove incorrect, the Group's actual results of operations, financial condition and liquidity and the development of the industry in which the Group operates may materially differ from those made in, or suggested by, the forward-looking statements contained in this announcement. In addition, even if the Group's results of operations, financial condition and liquidity and the development of the industry in which the Group operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in future periods. The Group does not undertake any obligation to review or confirm analysts, expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this announcement.
FERROALLOYS DIVISION
Ore Mining and Processing - Excluding Serov
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
Q1 2008 |
||
Chrome ore |
|||||
Ore extraction (Run-of-Mine 'RoM') |
000' t |
1,062 |
1,168 |
(9.1)% |
1,191 |
Processing of low grade stockpiles |
000' t |
436 |
308 |
+41.6% |
372 |
Saleable ore production |
000' t |
980 |
961 |
+2.0% |
900 |
Internal consumption of saleable ore |
000' t |
647 |
633 |
+2.2% |
669 |
- percentage |
66.0% |
65.9% |
74.3% |
||
Manganese ore |
|||||
Ore extraction (RoM) |
000' t |
696 |
693 |
+0.4% |
447 |
Processing of low grade stockpiles |
000' t |
339 |
228 |
+48.7% |
108 |
Saleable concentrate production |
000' t |
349 |
260 |
+34.2% |
182 |
Internal consumption of saleable concentrate |
000' t |
80 |
81 |
(1.2%) |
85 |
- percentage |
22.9% |
31.1% |
46.7% |
||
Iron-Manganese ore |
|||||
Ore extraction (RoM) |
000' t |
80 |
89 |
(10.1)% |
75 |
Processing of low grade stockpiles |
000' t |
176 |
40 |
+340.0% |
155 |
Saleable concentrate production |
000' t |
151 |
91 |
+65.9% |
100 |
In the second quarter of 2008 production in the Ferroalloys Division (excluding Serov) showed modest growth. Chrome ore extraction amounted to 1,062 thousand tonnes, a decrease of 9.1%, with a reduction in open pit mining ahead of a planned growth in underground extraction. This was offset by a growth of 41.6% in the processing of low grade ore from prior years' stockpiles, to 436 thousand tonnes. The processing of low grade stockpiled ore was achieved from improvements in beneficiation capabilities allowing for the more economical processing of this ore. From the extracted ore and the stockpiled ore the Division produced a combined total of 980 thousand tonnes of saleable chrome ore, a 2.0% increase. Of the saleable chrome ore produced, 647 thousand tonnes, representing 66.0% (2007: 65.9%), were consumed internally to produce chrome ferroalloys, an increase of 2.2%.
Ore Mining and Processing - Including Serov for Q2 2008
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
||
Chrome ore |
||||
Ore extraction (RoM) |
000' t |
1,116 |
1,168 |
(4.5)% |
Processing of low grade stockpiles |
000' t |
436 |
308 |
+41.6% |
Saleable ore production |
000' t |
1,014 |
961 |
+5.5% |
Internal consumption of saleable ore |
000' t |
760 |
633 |
+20.1% |
- percentage |
75.0% |
65.9% |
||
The Group's acquisition of Serov had a positive impact on the total volume of ore extracted by the Ferroalloys Division. Serov's ore extraction was 54 thousand tonnes and saleable ore production was 34 thousand tonnes (Note 3). Saleable ore production increased 5.5%, of which 2.2 percentage points were attributable to the existing business and 3.3 percentage points were attributable to Serov. The inclusion of Serov resulted in a significant increase in the internal consumption of chrome ore to 75.0% in the quarter ended 30 June 2008, compared to 65.9% in the quarter ended 30 June 2007.
Ferroalloys Production - Excluding Serov
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
Q1 2008 |
||
Ferrochrome |
000' t |
293 |
283 |
+3.5% |
293 |
- High Carbon |
000' t |
273 |
263 |
+3.8% |
273 |
- Medium Carbon |
000' t |
12 |
11 |
+9.1% |
12 |
- Low Carbon |
000' t |
9 |
9 |
0% |
8 |
Ferrosilicochrome |
000' t |
34 |
35 |
(2.9%) |
29 |
Silico-manganese |
000' t |
38 |
39 |
(2.6)% |
41 |
Ferro-silicon |
000' t |
8 |
7 |
+14.3% |
12 |
Total ferroalloys |
000' t |
374 |
365 |
+2.5% |
374 |
Internal consumption of ferroalloys |
000' t |
45 |
46 |
(2.2%) |
43 |
- percentage |
12.0% |
12.6% |
Note: table may not sum precisely due to roundings.
In the second quarter of 2008, the Ferroalloys Division (excluding Serov) produced 374 thousand tonnes of ferroalloys, an increase of 2.5%. Within this the Division produced 293 thousand tonnes of ferrochrome, an increase of 3.5%. Growth was achieved in the production of high- and medium-carbon ferrochrome.
Ferroalloys Production - Including Serov for Q2 2008
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
||
Ferrochrome |
000' t |
340 |
283 |
+20.1% |
- High Carbon |
000' t |
296 |
263 |
+12.5% |
- Medium Carbon |
000' t |
20 |
11 |
+81.8% |
- Low Carbon |
000' t |
24 |
9 |
+166.7% |
Ferrosilicochrome |
000' t |
49 |
35 |
+40.0% |
Silico-manganese |
000' t |
38 |
39 |
(2.6)% |
Ferro-silicon |
000' t |
16 |
7 |
+128.6% |
Total ferroalloys |
000' t |
443 |
365 |
+21.4% |
Internal consumption of ferroalloys |
000' t |
67 |
46 |
+45.6% |
- percentage |
15.1% |
12.6% |
Note: table may not sum precisely due to roundings.
The Serov acquisition resulted in significant growth in the Division's production volumes, and especially in the scale of low-, and medium-carbon ferrochrome, ferrosilicochrome and ferro-silicon. Serov added 70 thousand tonnes to total ferroalloys production (Note 3). In the second quarter of 2008, the Ferroalloys Division produced 443 thousand tonnes of ferroalloys, an increase of 21.4%, of which 2.5 percentage points were attributable to the existing business and 18.9 percentage points were attributable to Serov. Within the 443 thousand tonnes, the Division produced 340 thousand tonnes of ferrochrome, an increase of 20.1%.
IRON ORE DIVISION
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
Q1 2008 |
||
Ore extraction |
000' t |
10,722 |
10,106 |
+6.1% |
10,142 |
Primary concentrate production |
000' t |
4,479 |
4,367 |
+2.6% |
4,046 |
Saleable concentrate production |
000' t |
2,259 |
1,952 |
+15.7% |
1,870 |
Saleable pellets production |
000' t |
1,984 |
2,205 |
(10.0)% |
1,979 |
In the second quarter of 2008, the Iron Ore Division extracted 10,722 thousand tonnes of iron ore, an increase of 6.1%, in line with the extraction expansion planned for SSGPO. From the extracted ore the Division produced 4,479 thousand tonnes of primary concentrate production, an increase of 2.6%. Production growth was broadly in line with the increase in extraction but was partially offset by a marginally lower grade of mined ore and a reduced yield of concentrate.
Saleable concentrate production (with an iron content of 65.5%) increased 15.7% to 2,259 thousand tonnes. Primary concentrate is either sold or used for pellets production.
Pellets production (with an iron content of 63.4%) decreased 10.0% to 1,984 thousand tonnes. This was caused by a planned reconstruction of one pelletiser unit and a switch to concentrate sales in response to market demand. The reconstruction of the pelletiser unit overran and is currently scheduled to be completed in the third quarter of 2008.
ALUMINA AND ALUMINIUM DIVISION
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
Q1 2008 |
||
Bauxite extraction |
000' t |
1,310 |
1,223 |
+7.1% |
1,276 |
Alumina production |
000' t |
398 |
380 |
+4.7% |
398 |
Internal consumption of alumina |
000' t |
56 |
NA |
NA |
34 |
- percentage |
14.1% |
NA |
8.5% |
||
Aluminium production |
000' t |
27 |
NA |
NA |
16 |
Gallium production |
kilogrammes |
4,852 |
4,892 |
(0.8)% |
3,991 |
Internal consumption of alumina is expected to increase further in the third quarter of 2008. The recently commissioned aluminium smelter achieved its Phase 1 run rate output of 125 thousand tonnes per annum in the second quarter, which is ahead of its scheduled completion.
Gallium production in the second quarter of 2008 was slightly down as capacity was reallocated to other products in response to market demand.
ENERGY DIVISION
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
Q1 2008 |
||
Coal extraction |
000' t |
4,436 |
3,955 |
+12.2% |
5,732 |
Energy Division consumption of coal |
000' t |
1,733 |
1,676 |
+3.4% |
1,897 |
- percentage |
39.1% |
42.4% |
33.1% |
||
Sales of coal to other Group Divisions |
000' t |
1,020 |
1,054 |
(3.2)% |
1,387 |
- percentage |
23.0% |
26.6% |
24.2% |
||
Electricity generation |
MWh |
2,825 |
2,801 |
+0.9% |
3,129 |
Sales of electricity to Group Divisions |
MWh |
2,129 |
1,643 |
+29.6% |
2,044 |
- percentage |
75.4% |
58.7% |
65.3% |
In the second quarter of 2008, the Energy Division extracted 4,436 thousand tonnes of coal from the Vostochny mine. Growth in coal extraction of 481 thousand tonnes, an increase of 12.2%, reflected the Group's expansion plans.
Electricity generation in the period was 2,825 MWh, an increase of 0.9%. Electricity supplied by the Energy Division to other Group entities was 2,129 MWh or 75.4% of total energy generation, 486 MWh higher than in the quarter ended 30 June 2007 (58.7% of total energy generation). The impact of the new aluminium smelter in the second quarter of 2008 increased the Group's internal consumption of electricity by 450 MWh, 15.9% of the total output in the period; the impact of the aluminium smelter in the comparable period in 2007 was nil.
LOGISTICS DIVISION
Q2 2008 |
Q2 2007 |
Q2 2008 v Q2 2007 % growth |
Q1 2008 |
||
Tonnage of the Group's products transported by railway |
000' t |
15,011 |
14,562 |
+3.1% |
15,450 |
In the second quarter of 2008 the Logistics Division transported 15,011 thousand tonnes by railway, an increase of 3.1%.
- ENDS -
Notes
Ferroalloys Division: Serov - Ore Mining and Processing - Quarter ended 30 June 2008
Q2 2008 |
||
Chrome ore |
||
Ore extraction (RoM) |
000' t |
54 |
Processing of low grade stockpiles |
000' t |
- |
Saleable ore production |
000' t |
34 |
Internal consumption of saleable ore |
000' t |
35 |
- percentage |
102.9% |
|
Consumption of saleable ore from Kazchrome |
000' t |
78 |
Ferroalloys Division: Serov - Ferroalloys Production - Quarter ended 30 June 2008
Q2 2008 |
||
Ferrochrome |
000' t |
46 |
- High Carbon |
000' t |
23 |
- Medium Carbon |
000' t |
8 |
- Low Carbon |
000' t |
15 |
Ferrosilicochrome |
000' t |
15 |
Ferro-silicon |
000' t |
8 |
Total ferroalloys |
000' t |
70 |
Internal consumption of ferroalloys |
000' t |
22 |
- percentage |
31.4% |
Note: table may not sum precisely due to roundings
Production Report for the Half Year ended 30 June 2008
FERROALLOYS DIVISION (Including Serov for the Second Quarter 2008)
2008 |
2007 |
Variances |
||||||||||
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
H1 |
Q1 |
Q2 |
H1 |
Q1 '08 vs. Q1 '07 |
Q2 '08 vs. Q2 '07 |
H1 '08 vs. H1 '07 |
|||
Chrome Ore |
||||||||||||
Ore Extraction (Run-of-Mine 'RoM') |
1,191 |
1,116 |
2,307 |
1,181 |
1,168 |
2,349 |
0.8% |
-4.5% |
-1.8% |
|||
Processing of low grade stockpiles |
372 |
436 |
808 |
269 |
308 |
577 |
38.3% |
41.6% |
40.0% |
|||
Saleable ore production |
900 |
1,014 |
1,914 |
887 |
961 |
1,848 |
1.5% |
5.5% |
3.6% |
|||
Internal consumption of saleable ore |
669 |
760 |
1,429 |
630 |
633 |
1,263 |
6.2% |
20.1% |
13.1% |
|||
- percentage |
74.3% |
75.0% |
74.7% |
71.0% |
65.9% |
68.3% |
||||||
Manganese Ore |
||||||||||||
Ore Extraction (Run-of-Mine RoM') |
447 |
696 |
1,143 |
444 |
693 |
1,137 |
0.7% |
0.4% |
0.5% |
|||
Processing of low grade stockpiles |
108 |
339 |
447 |
287 |
228 |
515 |
-62.4% |
48.7% |
-13.2% |
|||
Saleable ore production |
182 |
349 |
531 |
160 |
260 |
420 |
13.8% |
34.2% |
26.4% |
|||
Internal consumption of saleable ore |
85 |
80 |
165 |
84 |
81 |
165 |
1.2% |
-1.2% |
0.0% |
|||
- percentage |
46.7% |
22.9% |
31.1% |
52.5% |
31.2% |
39.3% |
||||||
Iron-Manganese Ore |
||||||||||||
Ore Extraction (Run-of-Mine 'RoM') |
75 |
80 |
155 |
45 |
89 |
134 |
66.7% |
-10.1% |
15.7% |
|||
Processing of low grade stockpiles |
155 |
176 |
331 |
20 |
40 |
60 |
675.0% |
340.0% |
451.7% |
|||
Saleable ore production |
100 |
151 |
251 |
24 |
91 |
115 |
316.7% |
65.9% |
118.3% |
|||
Ferrochrome |
293 |
340 |
633 |
284 |
283 |
567 |
3.2% |
20.1% |
11.6% |
|||
- High Carbon |
273 |
296 |
569 |
265 |
263 |
528 |
3.0% |
12.5% |
7.8% |
|||
- Medium Carbon |
12 |
20 |
32 |
10 |
11 |
21 |
20.0% |
81.8% |
52.4% |
|||
- Low Carbon |
8 |
24 |
32 |
10 |
9 |
19 |
-20.0% |
166.7% |
68.4% |
|||
Ferrosilicochrome |
29 |
49 |
78 |
28 |
35 |
63 |
3.6% |
40.0% |
23.8% |
|||
Silico-manganese |
41 |
38 |
79 |
41 |
39 |
80 |
0.0% |
-2.6% |
-1.3% |
|||
Ferro-silicon |
12 |
16 |
28 |
12 |
7 |
19 |
0.0% |
128.6% |
47.4% |
|||
Total ferroalloys |
374 |
443 |
817 |
365 |
365 |
730 |
2.5% |
21.4% |
11.9% |
|||
Internal consumption of ferroalloys |
43 |
67 |
110 |
42 |
46 |
88 |
2.4% |
45.7% |
25.0% |
|||
- percentage |
11.5% |
15.1% |
13.5% |
11.5% |
12.6% |
12.1% |
||||||
IRON ORE DIVISION
2008 |
2007 |
Variances |
||||||||||
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
H1 |
Q1 |
Q2 |
H1 |
Q1 '08 vs. Q1 '07 |
Q2 '08 vs. Q2 '07 |
H1 '08 vs. H1 '07 |
|||
Ore extraction |
10,142 |
10,722 |
20,864 |
9,427 |
10,106 |
19,533 |
7.6% |
6.1% |
6.8% |
|||
Primary concentrate production |
4,046 |
4,479 |
8,525 |
3,915 |
4,367 |
8,282 |
3.3% |
2.6% |
2.9% |
|||
Saleable concentrate production |
1,870 |
2,259 |
4,129 |
1,542 |
1,952 |
3,494 |
21.3% |
15.7% |
18.2% |
|||
Saleable pellets production |
1,979 |
1,984 |
3,963 |
2,188 |
2,205 |
4,393 |
-9.6% |
-10.0% |
-9.8% |
|||
ALUMINA AND ALUMINIUM DIVISION
2008 |
2007 |
Variances |
||||||||||
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
H1 |
Q1 |
Q2 |
H1 |
Q1 '08 vs. Q1 '07 |
Q2 '08 vs. Q2 '07 |
H1 '08 vs. H1 '07 |
|||
Bauxite extraction |
1,276 |
1,310 |
2,586 |
1,194 |
1,223 |
2,417 |
6.9% |
7.1% |
7.0% |
|||
Alumina production |
398 |
398 |
796 |
376 |
380 |
756 |
5.9% |
4.7% |
5.3% |
|||
Internal consumption of alumina |
34 |
56 |
90 |
NA |
NA |
NA |
NA |
NA |
NA |
|||
- percentage |
8.5% |
14.1% |
11.3% |
NA |
NA |
NA |
NA |
NA |
NA |
|||
Aluminium production |
16 |
27 |
43 |
NA |
NA |
NA |
NA |
NA |
NA |
|||
Gallium production (kilogrammes) |
3,991 |
4,852 |
8,843 |
4,441 |
4,892 |
9,333 |
-10.1% |
-0.8% |
-5.3% |
|||
ENERGY DIVISION
2008 |
2007 |
Variances |
||||||||||
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
H1 |
Q1 |
Q2 |
H1 |
Q1 '08 vs. Q1 '07 |
Q2 '08 vs. Q2 '07 |
H1 '08 vs. H1 '07 |
|||
Coal extraction |
5,732 |
4,436 |
10,168 |
5,101 |
3,955 |
9,056 |
12.4% |
12.2% |
12.3% |
|||
Energy Division consumption of coal |
1,897 |
1,733 |
3,630 |
2,157 |
1,676 |
3,833 |
-12.1% |
3.4% |
-5.3% |
|||
- percentage |
33.1% |
39.1% |
35.7% |
42.3% |
42.4% |
42.3% |
||||||
Sales of coal to other Group Divisions |
1,387 |
1,020 |
2,407 |
1,207 |
1,054 |
2,261 |
14.9% |
-3.2% |
6.5% |
|||
- percentage |
24.2% |
23.0% |
23.7% |
23.7% |
26.6% |
25.0% |
||||||
Electricity generation (MWh) |
3,129 |
2,825 |
5,954 |
3,475 |
2,801 |
6,276 |
-10.0% |
0.9% |
-5.1% |
|||
Sales of electricity to Group Divisions (MWh) |
2,044 |
2,129 |
4,173 |
1,723 |
1,643 |
3,366 |
18.6% |
29.6% |
24.0% |
|||
- percentage |
65.3% |
75.4% |
70.1% |
49.6% |
58.7% |
53.6% |
||||||
LOGISTICS DIVISION
2008 |
2007 |
Variances |
||||||||||
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
H1 |
Q1 |
Q2 |
H1 |
Q1 '08 vs. Q1 '07 |
Q2 '08 vs. Q2 '07 |
H1 '08 vs. H1 '07 |
|||
Tonnage of the Group's products transported by railway |
15,450 |
15,011 |
30,461 |
14,895 |
14,562 |
29,457 |
3.7% |
3.1% |
3.4% |
Related Shares:
ENRC.L