12th Nov 2008 07:00
12 November 2008
Eurasian Natural Resources Corporation PLC
Interim Management Statement for the Second-half of 2008 and
Production Report for the Third-quarter ended 30 September 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 principally based in Kazakhstan, today announces its Interim Management Statement for the second-half of 2008 and its Production Report for the third-quarter ended 30 September 2008.
Highlights for the 9 Months to 30 September 2008
Production volumes across the Group (excluding Serov and the new aluminium smelter) increased relative to the corresponding period in 2007.
The Group's financial performance for the period remained very strong, driven by significantly higher prices, in particular for ferroalloys and iron ore.
Growth in total costs was successfully managed and was within Management expectations, and significantly below the rate of growth for revenues.
The Group's financial position is robust with gross available funds of approximately US$2.6 billion.
Outlook for the Full Year 2008
Since 30 September 2008 there have been a number of significant developments against the background of a deteriorating global economy, with weakening prices and sales.
The Group has reassessed its production plans for Q4 2008. Production will be reduced in the Ferroalloys Division and the Iron Ore Division; full year 2008 output will be below that for 2007 on a comparable basis.
The Group is reviewing its capital expenditure plans to focus on replacement and efficiency investments whilst re-evaluating the timing of expansion projects. For the full year 2008 capital expenditure will be significantly below the previously projected US$1.7 billion.
Despite the downturn in Q4 2008 the Group believes that its results for full year 2008 will be strong and towards the lower end of Management expectations.
"The Group's financial performance for the nine months ended Q3 2008 remained very strong, in line with our expectations. While the outlook for Q4 2008 is of weakening demand we continue to expect a strong performance for the full year 2008. In response to the sharp slowdown in the global economy, including China and Russia, and reduced demand, we have cut back production in the Ferroalloys and Iron Ore Divisions.
We believe that we are well positioned to face the challenges and seize the opportunities presented by the current economic environment. We will focus on maintaining our advantageous low cost position. Our strong balance sheet enables us to continue our investment in key projects and to consider acquisitions. Over the medium term we remain convinced of the growth prospects in our key markets."
Dr Johannes Sittard, Chief Executive Officer
For further information, please contact:
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ENRC: Investor Relations
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Mounissa Chodieva
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+44 (0) 20 7389 1879
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James S Johnson
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+44 (0) 20 7389 1862
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Marianna Adams
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+44 (0) 20 7389 1886
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ENRC: Press Relations
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Julia Kalcheva
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+44 (0) 20 7389 1861
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M: Communications
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Hugh Morrison
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+44 (0) 20 7153 1534
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Edward Orlebar
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+44 (0) 20 7153 1523
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Interim Management Statement and Production Report Conference Call Details
The Chief Financial Officer's briefing will be available as a live conference call for investors and analysts at 09.00 (GMT) on Wednesday, 12 November, 2008. The dial-in number for callers is +44 (0) 20 3003 2607, with the identifier, 'the ENRC call'. From shortly after the conference call there will be a replay available until Friday, 28 November, 2008: Tel: +44 (0) 20 8196 1998, access code: 7634345#. A recording of the briefing will be posted on the website in due course.
This Interim Management Statement ('IMS') and Production Report is drafted to meet the requirements of the Disclosure and Transparency Rules of the United Kingdom Financial Services Authority ('FSA') to provide additional information to shareholders. The IMS should not be relied on for any other purpose or by any other party.
About ENRC
ENRC is a leading diversified natural resources group performing integrated mining, processing, energy, logistics and marketing operations. The operations comprise: the mining and processing of chrome, manganese and iron ore; the smelting of ferroalloys; the mining and processing of bauxite for the extraction of alumina and the production of aluminium; coal extraction and electricity generation, and the transportation and sales of Group products. The Group's production assets are principally located in the Republic of Kazakhstan. The Group's entities, in the six months ended 30 June 2008, employed over 67,000 (2007: 64,000) people. In 2007, the Group accounted for approximately 4% of Kazakhstan's GDP. The Group currently sells its products around the world, including in Russia, China, Japan, Western Europe and the United States. For the six months ended 30 June 2008, the Group had revenue of US$3,442 million (2007: US$1,856 million) and net profit of US$1,366 million (2007: US$388 million). For further information please see the Group's website, www.enrc.com.
Forward-looking statements
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.
Interim Management Statement for the Second-half of 2008
The information set out below, unless stated otherwise, relates to the nine months ended 30 September 2008, and is compared to the corresponding nine months of 2007. The Outlook includes an update for the period since 30 September 2008.
From Q2 2008, the Group's revenue included incremental sales from Serov. In addition the new aluminium smelter reached its full Phase 1 annual run rate production capacity of 125 thousand tonnes during Q2 2008.
Financial Review
Revenue
Market conditions remained broadly favourable in the Group's principal commodities for the nine months ended 30 September 2008. Revenue growth, in the nine months ended 30 September 2008, was significantly ahead of the comparable period, with good performances across the core operating Divisions. In Q3 2008, despite a mounting deterioration in the economic background, the Group saw its revenue performance remain consistent with the level of Q2 2008 and higher than the quarterly average in H1 2008.
Prices for ferroalloys and iron ore in the nine months ended 30 September 2008, and in Q3 2008, were significantly higher than for the comparable periods in 2007. Higher demand for ferroalloys and iron ore, combined with power supply disruptions within the ferroalloys industry, notably in South Africa, and the significant uplift in iron ore benchmark prices, underpinned very strong market price increases. For the nine months ended 30 September 2008, in comparison with the corresponding period, average sales prices were higher for all commodities: an increase of 113.4% in high-carbon ferrochrome and 126.9% in the price of chrome ore; iron ore rose 80.0%; thermal coal was up 18.0% and electricity up 26.7%; whilst alumina prices, linked to London Metal Exchange ('LME') aluminium, rose 3.0%.
Partially offsetting the strength of revenues from higher prices there were indications in late Q3 2008, particularly for ferroalloys, of weakening demand, with some production being taken to stock.
Costs
Reflecting management's ongoing focus, the Group continued to successfully manage cost inflation. For the nine months ended 30 September 2008, against the comparable period in 2007, the growth rate of total costs was significantly below the comparable growth rate for revenue and within Management expectations. In Q3 2008 the level of total costs remained steady on the level of Q2 2008 but higher than the quarterly average of total costs in H1 2008. Costs growth was driven principally by higher volumes and materials input costs. Underlying Kazakhstani inflation - as measured by consumer prices - eased in Q3 2008, to an annual rate of around 18% as at end September 2008.
Financial Position
The Group's financial position is robust, with gross available funds as at 30 September 2008 of approximately US$2.6 billion. The Group has continued to pay down its trade finance facility; the amount outstanding was US$0.8 billion at 30 September 2008. Other than as mentioned in this statement there have been no material events, transactions or changes to the financial position of the Group since 30 June 2008.
Capital Expenditure and Projects Update
The Group continued with its approved capital expenditure programme. During Q3 2008 the main areas of expenditure were: the finalisation of Phase 1 and commencing construction of Phase 2 of the aluminium smelter; the construction of a new ferroalloys pelletiser; and the refurbishment of a power unit in the Energy Division.
In light of the current economic environment the Group is reviewing all of its capital expenditure plans, with priority being given to continuing with replacement investment or efficiency projects. The Group is re-evaluating the timing of expansion projects and is considering deferrals to the planned scheduling of expenditure. The Group also plans to use the current environment to seek ways to reduce project costs. Despite this, the Group believes that its relatively low production cost position in its core commodities, derived from the quality of the Group's mining assets and its captive energy supply, underpin the long-term capital expenditure projects of the Group.
Taxation
The Republic of Kazakhstan is finalising legislation on proposed changes to its tax regime that are likely to impact the Group and which are expected to take effect from 1 January 2009. The Group anticipates that this process will be completed shortly and that it will then be able to update the Market on the effects of the changes on the Group's financial performance. The Group has not changed its previous guidance on the potential impact on its financial performance.
Outlook
The Group maintains a positive view on the medium-term growth prospects for the Chinese and Russian domestic economies. Their potential growth in demand for ferroalloys, iron ore, alumina and aluminium, and for other metals, is significant, based on their populations and infrastructure investment requirements. The Group believes that ENRC, as an integrated metals and mining business, has the essential ingredients for future success, based on its proximity to these key markets, its low costs position and its growth opportunities.
Since 30 September 2008 there have been a number of significant developments which have impacted demand for the Group's commodities. Into Q4 2008, against a background of declining demand in the steel and stainless steel sectors and the deteriorating global economy, the outlook for prices and volumes weakened considerably. Demand from the Group's principal ferrochrome and iron ore customers, particularly in Russia - including the MMK iron ore contract - and China, deteriorated into Q4 2008 with widespread announcements of production cutbacks. The Group is continually reassessing the production plans for the businesses in light of the weakening global economic situation and its impact on demand from the Group's steel and stainless steel customers.
In light of the deteriorating market conditions the Group has reduced production in the Ferroalloys and Iron Ore Divisions for Q4 2008. It is currently anticipated that production in the Ferroalloys Division (excluding Serov) and in the Iron Ore Division for the full year 2008 will be below that for 2007.
Costs growth pressures in the industry are abating somewhat in response to the economic environment, which will help the Group's efforts to control costs.
As a consequence of the current economic climate and the opportunities to potentially reduce project costs, the full year 2008 capital expenditure will be significantly below the level of US$1.7 billion projected at the time of the 2007 Preliminary Results.
The Group believes that its results for the full year 2008 will be towards the lower end of Management expectations. We expect market pressures to continue into 2009 with prices and volumes being lower than for full year 2008.
Notes
The Group's own measured consensus is of sell-side analysts' 2008 forecasts - based on a simple arithmetic mean of those analysts who have published since the 2008 Half Year Results announcement and who have supplied to the Group their detailed estimates - and are as at the close of business on 11 November 2008. Consensus 2008 EBITDA (before exceptional items) was US$4,810 million, with a range of US$5,151 million to US$4,309 million; consensus 2008 profit attributable to ordinary shareholders was US$2,987 million, with a range of US$3,186 million to US$2,686 million.
Total costs: Cost of sales plus Distribution costs plus Selling, general and administrative expenses plus Other operating income/(expenses) net.
On 4 April 2008, the Group announced the completion of the acquisition of a controlling interest in the Serov group and certain related entities ('Serov'). Serov's results have been consolidated in the Group's Income Statement and Balance Sheet with effect from 4 April 2008.
On 15 October 2008 the Group completed its acquisition of a 50% stake in Xinjiang Tuoli Taihang Ferro-Alloy Co. LTD ('Tuoli'), a Chinese ferroalloys producer. The joint venture company has been renamed Xinjiang Tuoli ENRC Taihang Chrome Co. Ltd ('Tuoli'). Tuoli will be accounted for by the Group as a subsidiary.
On 21 August 2008 the Group declared an interim dividend in respect of the year ended 31 December 2008 of US12.00 cents per ordinary share. The interim dividend will be paid on 19 November 2008 to those shareholders on the register as at 5 September 2008.
The Kazakhstani Tenge ('KZT') to US Dollar spot exchange rate as at 30 September was KZT119.81/US$. The average exchange rate for the nine months ended 30 September was KZT120.34/US$; the average exchange rate for Q3 2008 was KZT119.99/US$.
Results timetable
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Wednesday, 4 February 2009
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Q4 2008 Production Report
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Wednesday, 25 March 2009
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Full Year 2008 Preliminary Results
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Wednesday, 13 May 2009
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H1 2009 Interim Management Statement/ Q1 2009 Production Report
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Wednesday, 10 June 2009
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Annual General Meeting
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Wednesday, 5 August 2009
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Q2 2009 Production Report
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Wednesday, 19 August 2009
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Half Year 2009 Results
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Wednesday, 11 November 2009
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H2 2009 Interim Management Statement/ Q3 2009 Production Report
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Production Report for the Third-quarter Ended 30 September 2008
The information set out below, unless stated otherwise, relates to the three months ended 30 September 2008, and is compared to the corresponding three months of 2007. Production volumes for the second quarter of 2008 are provided for information only. Within the Ferroalloys Division production volumes, unless otherwise stated, exclude Serov, which has been incorporated by the Group from 4 April 2008.
All references to 't' in the Production Report are to metric tonnes unless otherwise stated.
In the quarter ended 30 September 2008 production volumes across the Group increased compared to the third quarter of 2007. Ore grades remained broadly consistent with the corresponding period.
Ferroalloys Division production volumes increased (excluding Serov):
13.6% for saleable chrome ore;
17.1% for manganese concentrate; and
2.5% for total ferroalloys, and a 3.2% increase in total ferrochrome production.
Serov added saleable chrome ore production of 20 thousand tonnes and total ferroalloys production of 69 thousand tonnes.
Iron Ore Division production volumes increased:
6.1% for iron ore extraction;
6.5% for primary concentrate; and
8.3% for saleable production.
There was a change in the saleable mix as concentrate production increased 31.1%, offsetting a 12.1% reduction in pellets. The reduction in pellets production was caused by the planned reconstruction of one pelletising unit. The reconstruction was completed at the end of the quarter ended 30 September 2008.
Alumina and Aluminium Division production volumes increased:
4.6% for bauxite extraction; and
3.6% for saleable alumina.
Aluminium production commenced at the end of 2007. The Division produced
32 thousand tonnes of aluminium in the quarter ended 30 September 2008, in line with the smelter's Phase 1 capacity run rate of 125 thousand tones per annum.
Energy Division production volumes increased 9.8% for coal extraction and 9.7% for electricity generated.
Logistics Division tonnage of goods transported by railway increased 5.1%.
FERROALLOYS DIVISION
Ore Mining and Processing - Excluding Serov
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Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
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Chrome ore |
|||||
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Ore extraction (Run-of-Mine, 'RoM') |
000' t |
1,104 |
1,057 |
+4.4% |
1,062 |
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Processing of low grade stockpiles |
000' t |
375 |
353 |
+6.2% |
436 |
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Saleable ore production |
000' t |
991 |
872 |
+13.6% |
980 |
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Internal consumption of saleable ore |
000' t |
633 |
631 |
+0.3% |
647 |
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- percentage |
63.9% |
72.4% |
66.0% |
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Manganese ore |
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Ore extraction (RoM) |
000' t |
717 |
701 |
+2.3% |
696 |
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Processing of low grade stockpiles |
000' t |
301 |
257 |
+17.1% |
339 |
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Saleable concentrate production |
000' t |
350 |
299 |
+17.1% |
349 |
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Internal consumption of saleable concentrate |
000' t |
87 |
88 |
(1.1%) |
80 |
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- percentage |
24.9% |
29.4% |
22.9% |
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Iron-Manganese ore |
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Ore extraction (RoM) |
000' t |
148 |
75 |
+97.3% |
80 |
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Processing of low grade stockpiles |
000' t |
64 |
20 |
+220.0% |
176 |
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Saleable concentrate production |
000' t |
133 |
124 |
+7.3% |
151 |
In Q3 2008 production in the Ferroalloys Division (excluding Serov) showed solid growth. Chrome ore extraction amounted to 1,104 thousand tonnes, an increase of 4.4%. Processing of low grade ore from stockpiles increased 6.2% to 375 thousand tonnes. From the extracted and stockpiled ore the Division produced a combined total of 991 thousand tonnes of saleable chrome ore, a 13.6% increase, reflecting an underlying shift in the mix to higher grade ore and an improved processing efficiency, notably of fines. Of the saleable chrome ore produced, 633 thousand tonnes, representing 63.9% (2007: 72.4%), were consumed internally to produce chrome ferroalloys, a decrease of 8.5 percentage points, reflecting a stable level of internal consumption relative to higher saleable ore production.
Manganese ore extraction increased 2.3% to 717 thousand tonnes, whilst the processing of low grade stocks increased 17.1% to 301 thousand tonnes. Total manganese concentrate production increased 17.1% to 350 thousand tonnes in response to market opportunities. Production at JSC Zhairemsky GOK increased 17.6% as a result of a planned expansion, implemented through an increase of 14.3% in ore extraction and a significant increase of 32.9% in the processing of low grade material from stocks. Production at Kazmarganets Mining Department of TNC Kazchrome JSC, which supplies manganese concentrates to the Aksu ferroalloys plant of TNC Kazchrome JSC for use in silico-manganese production, increased 16.5%. The percentage of total manganese concentrate production consumed internally decreased to 24.9% (2007: 29.4%), as the internal consumption of silico-manganese remained relatively steady allowing more production to be available for external sale. The production of saleable iron-manganese concentrate increased 7.3% to 133 thousand tonnes.
Ore Mining and Processing - Including Serov from Q2 2008
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Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
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Chrome ore |
|||||
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Ore extraction (RoM) |
000' t |
1,137 |
1,057 |
+7.6% |
1,116 |
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Processing of low grade stockpiles |
000' t |
375 |
353 |
+6.2% |
436 |
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Saleable ore production |
000' t |
1,011 |
872 |
+15.9% |
1,014 |
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Internal consumption of saleable ore |
000' t |
727 |
631 |
+15.2% |
760 |
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- percentage |
71.9% |
72.4% |
75.0% |
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 33 thousand tonnes and saleable ore production was 20 thousand tonnes (see Note 2 below). Saleable ore production increased 15.9%, of which 13.6 percentage points were attributable to the existing business and 2.3 percentage points were attributable to Serov. The inclusion of Serov resulted in an increase in the internal consumption of chrome ore by 94 thousand tonnes, or 14.9 percentage points, whilst the proportion of ore consumed internally from total saleable ore production decreased to 71.9% in Q3 2008 (2007: 72.4%).
Ferroalloys Production - Excluding Serov
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Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
||
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Ferrochrome |
000' t |
294 |
285 |
+3.2% |
294 |
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- High Carbon |
000' t |
275 |
268 |
+2.6% |
273 |
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- Medium Carbon |
000' t |
10 |
10 |
+0.0% |
12 |
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- Low Carbon |
000' t |
9 |
8 |
+12.5% |
9 |
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Ferrosilicochrome |
000' t |
31 |
32 |
(3.1%) |
34 |
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Silico-manganese |
000' t |
42 |
41 |
+2.4% |
38 |
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Ferro-silicon |
000' t |
8 |
8 |
+0.0% |
8 |
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Total ferroalloys |
000' t |
375 |
366 |
+2.5% |
374 |
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Internal consumption of ferroalloys |
000' t |
46 |
43 |
+7.0% |
45 |
|
- percentage |
12.3% |
11.7% |
12.0% |
Note: table may not sum precisely due to roundings.
In Q3 2008, the Ferroalloys Division (excluding Serov) produced 375 thousand tonnes of ferroalloys, an increase of 2.5%. Within this the Division produced 294 thousand tonnes of ferrochrome, an increase of 3.2%. Growth was achieved principally in the production of high- and low-carbon ferrochrome.
Ferroalloys Production - Including Serov from Q2 2008
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Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
||
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Ferrochrome |
000' t |
339 |
285 |
+18.9% |
340 |
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- High Carbon |
000' t |
297 |
268 |
+10.8% |
296 |
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- Medium Carbon |
000' t |
18 |
10 |
+80.0% |
20 |
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- Low Carbon |
000' t |
24 |
8 |
+200.0% |
24 |
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Ferrosilicochrome |
000' t |
46 |
32 |
+43.8% |
49 |
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Silico-manganese |
000' t |
42 |
41 |
+2.4% |
38 |
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Ferro-silicon |
000' t |
17 |
8 |
+112.5% |
16 |
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Total ferroalloys |
000' t |
444 |
366 |
+21.3% |
443 |
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Internal consumption of ferroalloys |
000' t |
68 |
43 |
+58.1% |
67 |
|
- percentage |
15.3% |
11.7% |
15.1% |
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 low- and medium-carbon ferrochrome, ferrosilicochrome and ferro-silicon. Serov added 69 thousand tonnes to total ferroalloys production (see Note 2 below). In Q3 2008, the Ferroalloys Division produced 444 thousand tonnes of ferroalloys, an increase of 21.3%, of which 2.5 percentage points were attributable to the existing business and 18.8 percentage points were attributable to Serov. Within the 444 thousand tonnes, the Division produced 339 thousand tonnes of ferrochrome, an increase of 18.9%.
IRON ORE DIVISION
|
Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
||
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Ore extraction |
000' t |
10,776 |
10,155 |
+6.1% |
10,722 |
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Primary concentrate production |
000' t |
4,514 |
4,239 |
+6.5% |
4,479 |
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Saleable concentrate production |
000' t |
2,481 |
1,893 |
+31.1% |
2,259 |
|
Saleable pellets production |
000' t |
1,860 |
2,116 |
(12.1)% |
1,984 |
In Q3 2008, the Iron Ore Division extracted 10,776 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 4,514 thousand tonnes of primary concentrate production, an increase of 6.5%. Production growth was broadly in line with the increase in extraction and enhanced by a marginally higher grade of mined ore and an increased yield of concentrate.
Saleable concentrate production (with an iron content of 65.5%) increased 31.1% to 2,481 thousand tonnes. Primary concentrate is either sold or used for pellets production.
Pellets production (with an iron content of 63.4%) decreased 12.1% to 1,860 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 was completed at the end of Q3 2008, having overrun from Q2 2008.
ALUMINA AND ALUMINIUM DIVISION
|
Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
||
|
Bauxite extraction |
000' t |
1,334 |
1,275 |
+4.6% |
1,310 |
|
Alumina production |
000' t |
402 |
388 |
+3.6% |
398 |
|
Internal consumption of alumina |
000' t |
61 |
1 |
NA |
56 |
|
- percentage |
15.2% |
0.3% |
14.1% |
||
|
Aluminium production |
000' t |
32 |
0 |
NA |
27 |
|
Gallium production |
kilogrammes |
4,892 |
4,561 |
+7.3% |
4,852 |
In Q3 2008, the Alumina and Aluminium Division extracted 1,334 thousand tonnes of bauxite, an increase of 4.6%. The growth resulted from a development programme aimed at securing the supply of bauxite to underpin the planned expansion in annual alumina production to 1.6 million tonnes for the full year 2008, up from 1.5 million tonnes in 2007. Alumina production from bauxite was 402 thousand tonnes, an increase of 3.6%.
Operations commenced at the aluminium smelter at the end of 2007. As a consequence, a proportion of the alumina output is now consumed internally as a material input for the Group's own primary aluminium production; such internal consumption did not occur in the first three quarters of 2007. Internal consumption of alumina amounted to 61 thousand tonnes in Q3 2008, representing 15.2% of total alumina production. Primary aluminium production in Q3 2008 was 32 thousand tonnes (Q2 2008: 27 thousand tonnes; Q1 2008: 16 thousand tonnes), reflecting the build up of pots in operation.
Internal consumption of alumina increased further in Q3 2008 against Q2 2008. The recently commissioned aluminium smelter achieved its Phase 1 run rate output of 125 thousand tonnes per annum in the second quarter, ahead of its scheduled completion.
Gallium production in Q3 2008 was 4,892 kilogrammes, a 7.3% increase.
ENERGY DIVISION
|
Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
||
|
Coal extraction |
000' t |
4,220 |
3,844 |
+9.8% |
4,436 |
|
Energy Division consumption of coal |
000' t |
1,729 |
1,568 |
+10.3% |
1,733 |
|
- percentage |
41.0% |
40.8% |
39.1% |
||
|
Sales of coal to other Group Divisions |
000' t |
1,024 |
1,006 |
+1.8% |
1,020 |
|
- percentage |
24.3% |
26.2% |
23.0% |
||
|
Electricity generation |
GWh |
2,808 |
2,560 |
+9.7% |
2,825 |
|
Sales of electricity to other Group Divisions |
GWh |
2,214 |
1,712 |
+29.3% |
2,129 |
|
- percentage |
78.8% |
66.9% |
75.4% |
In Q3 2008, the Energy Division extracted 4,220 thousand tonnes of coal from the Vostochny mine. Growth in coal extraction of 376 thousand tonnes, an increase of 9.8%, reflected the Group's expansion plans.
Electricity generation in the period was 2,808 GWh, an increase of 9.7%. Electricity supplied by the Energy Division to other Group entities was 2,214 GWh or 78.8% of total energy generation, 502 GWh higher than in the quarter ended 30 September 2007 (66.9% of total energy generation) in response to increased internal requirements.
The new aluminium smelter contributed an increase in the Group's internal consumption of electricity of 440 GWh to 465 GWh (Q3 2007: 25 GWh), 16.6% of the total output in the period. 62 GWh of the increase in the Group's internal energy consumption reflected production growth in the Ferroalloys and Iron Ore Divisions.
The turbine block taken out of service for a planned refurbishment in Q1 2008 came back on-line early in Q4 2008.
LOGISTICS DIVISION
|
Q3 2008 |
Q3 2007 |
Q3 2008 v Q3 2007 % growth |
Q2 2008 |
||
|
Tonnage of the Group's products transported by railway |
000' t |
15,373 |
14,626 |
+5.1% |
14,854 |
In Q3 2008 the Logistics Division transported 15,373 thousand tonnes by railway, an increase of 5.1%.
Notes
1. Definition of 'Run of Mine' (RoM) extraction: uncrushed ore in its natural state, as when it is blasted.
2. Ferroalloys Division: Serov - Ore Mining and Processing and Ferroalloys Production
Ferroalloys Division: Serov - Ore Mining and Processing - Quarter ended 30 September 2008
|
Q3 2008 |
Q2 2008 |
||
|
Chrome ore |
|||
|
Ore extraction (RoM) |
000' t |
33 |
54 |
|
Processing of low grade stockpiles |
000' t |
- |
- |
|
Saleable ore production |
000' t |
20 |
34 |
|
Internal consumption of saleable ore |
000' t |
23 |
35 |
|
- percentage |
115.0% |
102.9% |
|
|
Consumption of saleable ore from Kazchrome |
000' t |
71 |
78 |
Internal consumption of saleable ore above 100% reflects consumption from stock.
Ferroalloys Division: Serov - Ferroalloys Production - Quarter ended 30 September 2008
|
Q3 2008 |
Q2 2008 |
||
|
Ferrochrome |
000' t |
45 |
46 |
|
- High Carbon |
000' t |
22 |
23 |
|
- Medium Carbon |
000' t |
8 |
8 |
|
- Low Carbon |
000' t |
15 |
15 |
|
Ferrosilicochrome |
000' t |
15 |
15 |
|
Ferro-silicon |
000' t |
10 |
8 |
|
Total ferroalloys |
000' t |
69 |
70 |
|
Internal consumption of ferroalloys |
000' t |
19 |
22 |
|
- percentage |
27.5% |
31.4% |
Note: table may not sum precisely due to roundings.
3. Production Report for the first three quarters of 2008 and 2007
Note: tables may not sum precisely due to roundings.
FERROALLOYS DIVISION (Including Serov from the Second Quarter of 2008)
|
2008 |
2007 |
Variances |
|||||||||||
|
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
Q3 |
9 mth |
Q1 |
Q2 |
Q3 |
9 mth |
Q3 '08 vs. Q3 '07 |
9m '08 vs. 9m '07 |
|||
|
Chrome Ore |
|||||||||||||
|
Ore Extraction (Run-of-Mine 'RoM') |
1,191 |
1,116 |
1,137 |
3,444 |
1,181 |
1,168 |
1,057 |
3,406 |
+7.6% |
+1.1% |
|||
|
Processing of low grade stockpiles |
372 |
436 |
375 |
1,184 |
269 |
308 |
353 |
929 |
+6.2% |
+27.4% |
|||
|
Saleable ore production |
900 |
1,014 |
1,011 |
2,925 |
887 |
961 |
872 |
2,720 |
+15.9% |
+7.5% |
|||
|
Internal consumption of saleable ore |
645 |
760 |
727 |
2,132 |
634 |
633 |
631 |
1,898 |
+15.2% |
+12.3% |
|||
|
- percentage |
71.7% |
75.0% |
71.9% |
72.9% |
71.5% |
65.9% |
72.4% |
69.8% |
|||||
|
Manganese Ore |
|||||||||||||
|
Ore Extraction (Run-of-Mine RoM') |
447 |
696 |
717 |
1,860 |
444 |
694 |
701 |
1,839 |
+2.3% |
+1.1% |
|||
|
Processing of low grade stockpiles |
107 |
338 |
301 |
747 |
287 |
228 |
257 |
771 |
+17.1% |
(3.1)% |
|||
|
Saleable ore production |
182 |
349 |
350 |
880 |
160 |
260 |
299 |
718 |
+17.1% |
+22.6% |
|||
|
Internal consumption of saleable ore |
85 |
80 |
87 |
252 |
84 |
81 |
88 |
253 |
(1.1)% |
(0.4)% |
|||
|
- percentage |
46.7% |
22.9% |
24.9% |
28.6% |
52.5% |
31.2% |
29.4% |
35.2% |
|||||
|
Iron-Manganese Ore |
|||||||||||||
|
Ore Extraction (Run-of-Mine 'RoM') |
75 |
80 |
148 |
303 |
45 |
89 |
75 |
209 |
+97.3% |
+45.0% |
|||
|
Processing of low grade stockpiles |
155 |
176 |
64 |
395 |
20 |
40 |
20 |
80 |
+220.0% |
+393.8% |
|||
|
Saleable ore production |
100 |
151 |
133 |
385 |
24 |
91 |
124 |
238 |
+7.3% |
+61.8% |
|||
|
Ferrochrome |
293 |
340 |
339 |
972 |
284 |
283 |
285 |
853 |
+18.9% |
+14.0% |
|||
|
- High Carbon |
273 |
296 |
297 |
866 |
265 |
263 |
268 |
796 |
+10.8% |
+8.8% |
|||
|
- Medium Carbon |
12 |
20 |
18 |
50 |
10 |
11 |
10 |
31 |
+80.0% |
+61.3% |
|||
|
- Low Carbon |
8 |
24 |
24 |
56 |
10 |
9 |
8 |
26 |
+200.0% |
+115.4% |
|||
|
Ferrosilicochrome |
29 |
49 |
46 |
124 |
28 |
35 |
32 |
95 |
+43.8% |
+30.5% |
|||
|
Silico-manganese |
41 |
38 |
42 |
121 |
41 |
39 |
41 |
122 |
+2.4% |
(0.8)% |
|||
|
Ferro-silicon |
12 |
16 |
17 |
45 |
12 |
7 |
8 |
27 |
+112.5.% |
+66.7% |
|||
|
Total ferroalloys |
374 |
443 |
444 |
1,262 |
365 |
365 |
366 |
1,096 |
+21.3% |
+15.1% |
|||
|
Internal consumption of ferroalloys |
43 |
67 |
68 |
178 |
42 |
47 |
43 |
132 |
+58.1% |
+34.8% |
|||
|
- percentage |
11.5% |
15.1% |
15.3% |
14.1% |
11.5% |
12.9% |
11.7% |
12.0% |
|||||
IRON ORE DIVISION
|
2008 |
2007 |
Variances |
|||||||||||
|
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
Q3 |
9 mth |
Q1 |
Q2 |
Q3 |
9 mth |
Q3 '08 vs. Q3 '07 |
9m '08 vs. 9m '07 |
|||
|
Ore extraction |
10,142 |
10,722 |
10,776 |
31,640 |
9,427 |
10,106 |
10,155 |
29,688 |
+6.1% |
+6.6% |
|||
|
Primary concentrate production |
4,046 |
4,479 |
4,514 |
13,039 |
3,915 |
4,367 |
4,239 |
12,521 |
+6.5% |
+4.1% |
|||
|
Saleable concentrate production |
1,870 |
2,260 |
2,481 |
6,610 |
1,542 |
1,952 |
1,893 |
5,387 |
+31.1% |
+22.7% |
|||
|
Saleable pellets production |
1,979 |
1,984 |
1,860 |
5,824 |
2,188 |
2,205 |
2,116 |
6,509 |
(12.1)% |
(10.5)% |
|||
ALUMINA AND ALUMINIUM DIVISION
|
2008 |
2007 |
Variances |
|||||||||||
|
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
Q3 |
9 mth |
Q1 |
Q2 |
Q3 |
9 mth |
Q3 '08 vs. Q3 '07 |
9m '08 vs. 9m '07 |
|||
|
Bauxite extraction |
1,276 |
1,310 |
1,334 |
3,920 |
1,194 |
1,223 |
1,275 |
3,692 |
+4.6% |
+6.2% |
|||
|
Alumina production |
398 |
398 |
402 |
1,198 |
376 |
380 |
388 |
1,144 |
+3.6% |
+4.7% |
|||
|
Internal consumption of alumina |
33 |
56 |
61 |
150 |
NA |
NA |
1 |
1 |
NA |
NA |
|||
|
- percentage |
8.3% |
14.1% |
15.2% |
12.5% |
NA |
NA |
0.3% |
0.1% |
NA |
NA |
|||
|
Aluminium production |
16 |
27 |
32 |
75 |
NA |
NA |
NA |
NA |
NA |
NA |
|||
|
Gallium production (kilogrammes) |
3,991 |
4,852 |
4,892 |
13,735 |
4,441 |
4,892 |
4,561 |
13,894 |
+7.3% |
(1.1)% |
|||
ENERGY DIVISION
|
2008 |
2007 |
Variances |
|||||||||||
|
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
Q3 |
9 mth |
Q1 |
Q2 |
Q3 |
9 mth |
Q3 '08 vs. Q3 '07 |
9m '08 vs. 9m '07 |
|||
|
Coal extraction |
5,732 |
4,436 |
4,220 |
14,387 |
5,101 |
3,955 |
3,844 |
12,901 |
+9.8% |
+11.5% |
|||
|
Energy Division consumption of coal |
1,912 |
1,733 |
1,729 |
5,375 |
2,129 |
1,676 |
1,568 |
5,373 |
+10.3% |
+0.0% |
|||
|
- percentage |
33.4% |
39.1% |
41.0% |
37.4% |
41.7% |
42.4% |
40.8% |
41.6% |
|||||
|
Sales of coal to other Group Divisions |
1,388 |
1,020 |
1,024 |
3,432 |
1,207 |
1,054 |
1,006 |
3,267 |
+1.8% |
+5.1% |
|||
|
- percentage |
24.2% |
23.0% |
24.3% |
23.9% |
23.7% |
26.6% |
26.2% |
25.3% |
|||||
|
Electricity generation (GWh) |
3,130 |
2,825 |
2,808 |
8,763 |
3,475 |
2,801 |
2,560 |
8,837 |
+9.7% |
(0.8)% |
|||
|
Sales of electricity to other Group Divisions (GWh) |
2,044 |
2,129 |
2,214 |
6,387 |
1,724 |
1,643 |
1,712 |
5,079 |
+29.3% |
+25.8% |
|||
|
- percentage |
65.3% |
75.4% |
78.8% |
72.9% |
49.6% |
58.7% |
66.9% |
57.5% |
|||||
LOGISTICS DIVISION
|
2008 |
2007 |
Variances |
|||||||||||
|
'000 Metric Tonnes = ('t) |
Q1 |
Q2 |
Q3 |
9 mth |
Q1 |
Q2 |
Q3 |
9 mth |
Q3 '08 vs. Q3 '07 |
9m '08 vs. 9m '07 |
|||
|
Tonnage of the Group's products transported by railway |
15,450 |
14,854 |
15,373 |
45,677 |
14,895 |
14,562 |
14,626 |
44,083 |
+5.1% |
+3.6% |
|||
- ENDS -
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