10th Oct 2007 07:00
Vedanta Resources PLC10 October 2007 Vedanta Resources plc Production Report for the Second Quarter and Six Months Ended 30 September 2007 Highlights • Highest ever quarterly production volumes across Aluminium, Copper India and Zinc mining operations• Shipment of calcined alumina from Lanjigarh commenced in the first week of August 2007• Chanderiya zinc smelter expansion ahead of schedule by three months• All other expansion projects progressing on schedule Performance Summary Production volumes for aluminium, zinc and copper during the six months ended30 September 2007 ("H1") were significantly higher compared with thecorresponding prior period. The increase in production was primarily due to thefull production from the new Korba smelter, the ramp up of the Tuticorinsmelter, stabilisation of the Chanderiya smelter and the positive impact of thevarious initiatives taken at the Konkola operations. The first stream of the Lanjigarh alumina refinery was commissioned and produced28,000 tonnes of calcined alumina during the quarter ended 30 September 2007("Q2"). The second stream of the refinery is currently in the pre-commissioningphase. The 170,000 tpa zinc hydro smelter expansion at Chanderiya is ahead of scheduleby three months and is now expected to be commissioned by December 2007. Theother expansion projects are all progressing well and are on track forcompletion on schedule. Aluminium Aluminium production in Q2 was 99,000 tonnes, an increase of 25% compared withthe corresponding prior quarter, and higher than the rated production capacity.Operating performance at both the Korba smelters has continued to improve as aresult of ongoing initiatives. The first stream of the 1.0-1.4 mtpa alumina refinery at Lanjigarh wassuccessfully commissioned with production of 28,000 tonnes of calcined aluminaduring Q2. The refinery started dispatching alumina to BALCO in earlyAugust 2007. The second stream of the refinery is on course for commissioning byDecember 2007. Both streams I and II of the Lanjigarh alumina refinery areexpected to be fully stabilised by the end of FY 2008. With regard to the environmental clearances for developing the Lanjigarh bauxitemines, the Ministry of Environment and Forests has given a positiverecommendation to the Honourable Supreme Court of India. We are hopeful of apositive resolution of this matter soon. Work on the first phase of the 500,000 tpa aluminium smelter and associatedcaptive power plant at Jharsuguda, Orissa is progressing well. Constructionactivity at the site is in full swing. Equipment deliveries are progressing asper schedule and the plant erection work has commenced. Phase 1 of this projectcomprising a 250,000 tpa smelter and the associated captive power plant are ontrack for commissioning by mid-CY2009. Copper - India and Australia The Tuticorin smelter had its highest ever quarterly production of coppercathode of 91,000 tonnes, an increase of 14% over the corresponding priorquarter. Mined metal production at our Australian mines was consistent, with anoutput of 8,000 tonnes in Q2. Copper - Zambia KCM produced 40,000 tonnes of copper cathode in Q2, an increase of 29% over thecorresponding prior quarter. The production from the tailing leach plant wassubstantially higher at 18,000 tonnes during Q2, an increase of 80% comparedwith 10,000 tonnes in the corresponding prior quarter. As a result of theconsistent improvement initiatives undertaken, mined metal production in Q2 was21,000 tonnes. Work on the Konkola Deeps mine expansion project is progressing well with thesinking of the main hoisting shaft and other auxiliary shafts on schedule. Workat the Nchanga smelter expansion project remains on track with major equipmentdelivered on site and erection activities progressing as per schedule. Both theprojects are on course for commissioning as per schedule. Zinc Mined metal production was at its highest ever at 143,000 tonnes during Q2, anincrease of 15% compared with the corresponding prior quarter. Refined zincproduction was 94,000 tonnes in Q2, an increase of 21% compared with thecorresponding prior quarter. Sales in Q2 were augmented by the sale of 85,000 dry metric tonnes of zincconcentrate and 10,000 dry metric tonnes of lead concentrate. Work on the new 170,000 tpa Chanderiya hydro smelter is in the final stages ofcompletion with commissioning expected by December 2007, about three monthsahead of our earlier announced commissioning schedule of early 2008. The 88,000tonnes debottlenecking project is also progressing well and is on schedule. As part of our green energy initiative, we have successfully commissioned63.2 MW as of September 2007, out of the total contracted 148.8 MW of wind powerplants. Work on the remaining plants is on schedule with progressivecommissioning expected by March 2008. Iron Ore The open offer to acquire an additional 20% of Sesa Goa Limited ("Sesa") closedon 19 September 2007. Post completion of this offer, our holding in Sesa was alittle over 51%. The saleable ore produced in Q2 was 1.85 million tonnes. Overall production andconsequent shipment is generally lower during this period, due to the seasonalmonsoon cycle, which is typical to the region. Commercial Energy Work on the 2,400 MW (4x600 MW) coal based independent thermal power plant isprogressing well. The EPC contract has been placed and engineering andprocurement activities are on track. The project is on schedule for progressivecommissioning in late CY 2009 as announced previously. Production Summary (Unaudited) (In '000 tonnes, except as stated) ----------------------------------------------------------------- Six months ended 30 September Second quarter ended 30 September ----------------------------------------------------------------- 2007 2006 Change % 2007 2006 Change %AluminaKorba/Mettur 145 150 (3.3%) 74 77 (3.9%)Lanjigarh 28 - - 28 - - Aluminium 196 155 26.5% 99 79 25.3% Copper India/AustraliaMined metalcontent 15 15 - 8 7 14.3%Cathodes 172 137 25.5% 91 80 13.8%Rods 107 87 23.0% 56 46 21.7% Copper-ZambiaMined metalcontent 41 43 (4.7%) 21 25 (16.0%)Cathodes 79 70 12.9% 40 31 29.0% ZincMined metalcontent 278 256 8.6% 143 124 15.3%Refined metal 187 161 16.1% 94 78 20.5% Iron Ore2Saleable ore3 3,782 - - 1,848 - --------------------------------------------------------------------------------- 1. Represents production for the current quarter only and is not directly comparable with the corresponding prior periods2. Represents production in post acquisition period of 5 months to 30 September 2007, and are not directly comparable with the corresponding prior periods3. Saleable ore is reported on wet tonnes basis For further information, please contact: Sumanth Cidambi sumanth.cidambi@vedanta.co.inAssociate Director - Investor Relations Tel: +44 20 7659 4732 / Vedanta Resources plc +91 22 6646 1531 James Murgatroyd Tel: +44 20 7251 3801Robin WalkerFinsbury About Vedanta Resources plcVedanta Resources plc is a London listed FTSE 100 diversified metals and mininggroup. Its principal operations are located throughout India, with furtheroperations in Zambia and Australia. The major metals produced are aluminium,copper, zinc, lead and iron ore. For further information, please visitwww.vedantaresources.com. DisclaimerThis 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. 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