Vedanta Res PLC VED Vedanta Q2 FY 2013 Production Release

  Vedanta Res PLC (VED) - Vedanta Q2 FY 2013 Production Release

RNS Number : 2387O
Vedanta Resources PLC
09 October 2012




                                                               9 October 2012

                            Vedanta Resources plc

                Production Release for the Second Quarter and

                      Half Year Ended 30 September 2012



Highlights



Ø Record Q2 and H1 gross Oil & Gas production with Rajasthan output up 37% and
35% respectively

Ø Record Q2  and H1 integrated  production at  Copper Zambia, up  42% and  23% 
respectively

Ø Strong H1 integrated production of Silver and Lead at Zinc India, up 66% and
59% respectively

Ø Record Power sales in Q2 and H1

Ø State-wide temporary restriction on iron ore extraction announced in Goa



Zinc - India



                                    Q2             Q1             H1
Particulars (in'000       FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                     YoY                           YoY
ZINC INDIA
 Mined metal content       190    210     (9%)    187    377    398     (5%)
 Refined Zinc - Total      163    185    (12%)    161    324    378    (14%)
 Refined Zinc -            153    185    (17%)    157    310    376    (17%)
Integrated
 Refined Zinc - Custom      10      -        -      4     14      2        -
 Refined Lead - Total       27     17      60%     31     58     33      75%
^1
 Refined Lead -             24     17      40%     29     53     33      59%
Integrated
 Refined Lead - Custom       3      -        -      2      5      -        -
 Silver - Total (in      2,953  1,584      86%  2,629  5,582  3,088      81%
'000 ounces) ^2
 Silver - Integrated     2,587  1,584      63%  2,552  5,139  3,088      66%
(in '000 ounces)
 Silver - Custom (in       366      -        -     77    443      -        -
'000 ounces)



Mined metal production was 190,000 tonnes in  Q2 and 377,000 tonnes in H1,  as 
compared with 210,000  tonnes and  398,000 tonnes in  the corresponding  prior 
periods. The Sindesar  Khurd (SK) mine  continued to ramp-up  well with  mined 
metal production up 39% at 45,000 tonnes in H1.



In line with the mined metal production, integrated production of refined zinc
was 153,000 tonnes in  Q2 and 310,000 tonnes  in H1. Integrated production  of 
refined lead was 24,000 tonnes in Q2, and 53,000 tonnes in H1, up 40% and  59% 
respectively, driven by the ramp-up of the new 100kt Dariba lead smelter.



In line with  the mine plan  and earlier guidance,  mined metal production  in 
FY2013 is  expected  to  be  slightly higher  than  the  previous  year,  with 
production in H2 FY2013 more than making up for marginally lower production in
H1 FY2013 as compared with the corresponding prior period.



Integrated production of silver was 2.60 million ounces in Q2 and 5.14 million
ounces in H1, up 63%  and 66% respectively, driven by  the ramp-up of SK  mine 
and the new 100kt Dariba lead smelter.

The Rampura Agucha underground  mine and Kayar  mine projects are  progressing 
well to  deliver commercial  production  in FY2014.  The Kayar  mine  produced 
developmental ore in Q2.



Zinc International



                                    Q2             Q1             H1
Particulars (in'000       FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                     YoY                           YoY
ZINC INTERNATIONAL           114    114        -    106    220    233     (5%)
 Zinc -refined              37     37        -     36     73     76     (4%)
Mined metal content- BMM      77     77        -     70    147    157     (6%)
and Lisheen



Total production  of refined  zinc and  mined zinc-lead  metal in  concentrate 
(MIC) was 114,000 tonnes in Q2,  in line with the corresponding prior  period, 
and 5% lower at 220,000 in H1 in line with the current year's mine plan and on
account of lower grades, as earlier guided.



Oil and Gas



                                Q2              Q1               H1
Particulars (boepd)  FY2013  FY2012  % change FY2013  FY2013  FY2012  % change
                                       YoY                              YoY
OIL AND GAS (boepd)
^3
Average Daily Gross
Operated Production  207,245 169,944      22% 206,963 207,105 170,867      21%
(boepd)
 Rajasthan         171,801 125,251      37% 167,146 169,486 125,189      35%
 Ravva              28,614  36,185    (21%)  32,589  30,591  36,997    (17%)
 Cambay              6,830   8,508    (20%)   7,228   7,028   8,680    (19%)
Average Daily
Working Interest     129,431  99,220      30% 127,226 128,335  99,429      29%
Production (boepd)
 Rajasthan         120,261  87,676      37% 117,002 118,641  87,633      35%
 Ravva               6,438   8,142    (21%)   7,333   6,883   8,324    (17%)
 Cambay              2,732   3,403    (20%)   2,891   2,811   3,472    (19%)
Total Oil and Gas
(million boe) ^3
Oil & Gas- Gross       19.07   15.63      22%   18.83   37.90   31.27      21%
Oil & Gas-Working      11.91    9.13      30%   11.58   23.49   18.20      29%
Interest



In Q2, average  daily gross  operated production  was 207,245  barrels of  oil 
equivalent (boe),  22% higher  than the  corresponding prior  period.  Working 
interest production was 30%  higher at 129,431 barrels  of oil equivalent  per 
day (boepd).

The increase was driven by ramp-up  at the Rajasthan block, which delivered  a 
37% higher gross production of 171,801 bopd from the four producing fields  in 
Q2. This included  gross production  from the  Mangala and  Bhagyam fields  of 
148,908 bopd and 22,435 bopd, respectively.

Cairn India signed a farm-in agreement with Petroleum Oil and Gas  Corporation 
of South Africa Ltd. (PetroSA), the national oil company of South Africa,  for 
the  19,922  square   km  off-shore  Block   1,  which  is   located  in   the 
geologically-proven Orange Basin in South Africa. Cairn India will hold a  60% 
interest in the block and  will be the Operator.  The agreement was signed  in 
August 2012 and  the closure of  the transaction is  subject to South  African 
regulatory approvals.





Iron Ore



                                    Q2             Q1             H1
Particulars (in million                 % change                      % change
dry metric tonnes, or as  FY2013 FY2012   YoY    FY2013 FY2013 FY2012   YoY
stated)
IRON ORE ^4
 Sales                     0.2    1.6    (86%)    2.9    3.1    5.8    (47%)
Goa                          0.2    0.8    (75%)    2.8    3.0    4.0    (24%)
Karnataka^5                  0.0    0.7    (98%)    0.0    0.1    1.8    (97%)
 Production of Saleable    0.4    1.1    (65%)    3.4    3.7    5.5    (32%)
Ore
Goa                          0.4    0.7    (42%)    3.4    3.7    4.6    (18%)
Karnataka                    0.0    0.5        -    0.0    0.0    0.9        -
Production ('000 tonnes)
Pig Iron                      82     63      30%     39    121    126     (3%)
Met Coke                      83     65      28%     64    146    128      14%



Sales of Iron Ore were 0.2 million tonnes in Q2 and 3.1 million tonnes in  H1, 
as  compared  with  1.6  million  tonnes   and  5.8  million  tonnes  in   the 
corresponding prior periods, respectively.  Iron ore operations were  affected 
by the mining ban in Karnataka, a temporary restriction on iron ore extraction
in Goa, and transportation restrictions in South Goa during the monsoons.



Last month, the Supreme Court allowed some mines in Karnataka to resume mining
operations, in line  with recommendations of  the Central Empowered  Committee 
(CEC), and has now commenced the process for other mines including our mine in
Karnataka. The CEC has approved our  Reclamation and Rehabilitation plan at  a 
provisional production capacity of 2.29 mtpa and we expect to commence  mining 
in Karnataka, subject to receiving the court's approval.



The Goa state government ordered a  temporary suspension on extraction of  ore 
across the state of Goa from 11 September 2012 pending verification of various
approval  documents,  but  stated  that  the  ore  already  mined-out  may  be 
transported and sold after inspection and clearance by the state  government. 
Further,  the  Ministry   of  Environment  and   Forests  suspended   existing 
environmental clearances of mines across the state from 14 September 2012, and
is verifying documents related to environmental clearances. On 5 October 2012,
the Supreme Court ruled that the ban on mining activities in Goa continue, and
asked the CEC  to file a  preliminary report  in four weeks.  Until then,  the 
court has also restricted any movement of ore from mines or stockyard. We  are 
working closely  with  the  regulatory  authorities  to  complete  the  review 
processes.



Expansions of  the  pig  iron  capacity  (to  625  ktpa)  and  the  associated 
metallurgical coke capacity were successfully commissioned during Q2.



At our Liberia iron ore project, exploration activities are progressing  well, 
with over  31,000 meters  of drilling  completed till  30 September  2012.  We 
remain on track to deliver the first shipment in FY2014.



Copper - India and Australia



                                    Q2             Q1             H1
Particulars (in'000       FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                     YoY                           YoY
COPPER- INDIA / AUSTRALIA
 Copper - Mined metal         6      5      14%      7     13     11      13%
content
 Copper - Cathodes          87     87        -     88    175    161       9%



Copper  cathode  production  was  87,000  tonnes  in  Q2,  in  line  with  the 
corresponding prior period, and 9% higher at 175,000 tonnes in H1.



Mined metal production at Australia was 14%  higher at 6,000 tonnes in Q2  and 
13% higher at 13,000 tonnes in H1.



The first 80MW unit of the 160MW captive power plant at Tuticorin, which  will 
predominantly provide power to the copper smelter, was synchronised during the
quarter.



Copper - Zambia



                                    Q2             Q1             H1
Particulars (in'000       FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                     YoY                           YoY
COPPER -ZAMBIA
Mined metal                   45     39      16%     41     86     76      14%
Copper - Total                61     52      17%     49    110    102       8%
 Integrated                  47     33      42%     36     83     68      23%
 Custom                      14     19    (27%)     13     27     34    (21%)



Mined metal production was 16% higher at  45,000 tonnes in Q2, and 14%  higher 
at 86,000 tonnes  in H1,  as compared  with the  corresponding prior  periods, 
respectively. The increase was driven by production ramp-up at Konkola due  to 
faster mine development,  and higher  throughput from  the newly  commissioned 
Nchanga concentrator.



Total production of copper cathodes was 17% higher at 61,000 tonnes in Q2, and
8% higher 110,000 tonnes in H1. Higher mined metal production contributed to a
robust 42% increase in integrated production to 47,000 tonnes in Q2 and a  23% 
increase to 83,000 tonnes in H1.



Production from custom smelting  was affected by  lower availability of  third 
party concentrate.



At KDMP, bottom-shaft  loading has  been commissioned and  waste hoisting  has 
commenced ahead of schedule. The  3mtpa Nchanga West concentrator's  flotation 
circuit has been  commissioned and  is operating smoothly,  while the  milling 
section is currently under commissioning.



Aluminium



                                    Q2             Q1             H1
Particulars (in'000       FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                        YoY                           YoY
ALUMINIUM
 Alumina - Lanjigarh        205    228    (10%)    218    423    451     (6%)
 Total Aluminum             197    151      30%    185    382    324      18%
Production
 Jharsuguda-I           134     91      47%    124    259    203      27%
 Korba-II                63     60       4%     60    123    121       1%
 BALCO 270MW Power         346    387    (10%)    338    684    811    (16%)
Sales



Alumina production at  the Lanjigarh  refinery was  205,000 tonnes  in Q2  and 
423,000 tonnes in H1,  10% and 6% lower  than the corresponding prior  periods 
due to  lower supply  of  third-party bauxite.  With reduced  availability  of 
third-party bauxite, we are evaluating  various options including a  temporary 
shut-down of refinery operations.



The Jharsuguda-I and Korba-II smelters operated above their rated  capacities, 
with significant improvement in specific  power consumption and throughput  at 
Jharsuguda-I. Aluminium production was 30% higher at 197,000 tonnes in Q2, and
18% higher at 382,000 tonnes in  H1. Total production of value-added  products 
was 11% higher at 215,000 tonnes in H1. Power sales at BALCO 270MW were  lower 
in Q2 and H1 due to lower demand.



Due to a delay in obtaining regulatory approvals, the first 300MW unit of  the 
BALCO 1,200MW captive power  plant is now expected  to be synchronized in  the 
current quarter. Thereafter, we plan  to tap the first  metal at the 325  ktpa 
Korba-III aluminium smelter in Q4 FY2013.  For the 211mt coal block at  BALCO, 
we are progressing well towards  obtaining the second stage forest  clearance, 
and thereafter we intend to commence mining this year.



Power



                                    Q2             Q1             H1
Particulars (in million   FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
units)                                       YoY                           YoY
POWER
Total Power Sales          2,350  1,435      64%  2,329  4,679  2,851      64%
SEL ^6                     1,940  1,267      53%  1,938  3,879  2,404      61%
MALCO                        221     74     198%    209    431    246      75%
HZL Wind Power               188     94      99%    182    370    200      85%



Power sales were 2,350 million units in Q2 and 4,679 million units in H1,  64% 
higher than the  corresponding prior  periods. This  significant increase  was 
primarily due to higher power sales from three units of the Jharsuguda 2,400MW
power plant, operating at availability of over 80% and plant load factor (PLF)
of 50% in  H1, with the  fourth unit generating  under trial run.  PLF of  the 
Jharsuguda 2,400MW power plant was constrained due to evacuation  limitations. 
We continue to work  towards debottlenecking of  our evacuation capacity,  and 
target to enhance it by an additional 1,000MW transmission by Q4 FY2013.



Power sales  were augmented  by higher  sales  at HZL  wind power,  which  was 
expanded by  150MW  to 274MW  last  year, and  higher  sales at  MALCO,  which 
operated at 109% PLF in H1.



Work at the Talwandi Sabo power project is progressing well and the first unit
is now expected to be synchronized in Q2 FY2014.

Production Summary (Unaudited)



(in '000 tonnes, except as stated)

                                Q2              Q1               H1
Particulars          FY2013  FY2012  % change FY2013  FY2013  FY2012  % change
                                       YoY                              YoY
ZINC INDIA
 Mined metal           190     210     (9%)     187     377     398     (5%)
content
 Refined Zinc -        163     185    (12%)     161     324     378    (14%)
Total
 Refined Zinc -        153     185    (17%)     157     310     376    (17%)
Integrated
 Refined Zinc -         10       -        -       4      14       2        -
Custom
 Refined Lead -         27      17      60%      31      58      33      75%
Total ^1
 Refined Lead -         24      17      40%      29      53      33      59%
Integrated
 Refined Lead -          3       -        -       2       5       -        -
Custom
 Silver - Total      2,953   1,584      86%   2,629   5,582   3,088      81%
(in '000 ounces) ^2
 Silver -
Integrated (in '000    2,587   1,584      63%   2,552   5,139   3,088      66%
ounces)
 Silver - Custom       366       -        -      77     443       -        -
(in '000 ounces)
ZINC INTERNATIONAL       114     114        -     106     220     233     (5%)
 Zinc -refined          37      37        -      36      73      76     (4%)
Mined metal content-      77      77        -      70     147     157     (6%)
BMM and Lisheen
OIL AND GAS (boepd)
^3
Average Daily Gross
Operated Production  207,245 169,944      22% 206,963 207,105 170,867      21%
(boepd)
 Rajasthan         171,801 125,251      37% 167,146 169,486 125,189      35%
 Ravva              28,614  36,185    (21%)  32,589  30,591  36,997    (17%)
 Cambay              6,830   8,508    (20%)   7,228   7,028   8,680    (19%)
Average Daily
Working Interest     129,431  99,220      30% 127,226 128,335  99,429      29%
Production (boepd)
 Rajasthan         120,261  87,676      37% 117,002 118,641  87,633      35%
 Ravva               6,438   8,142    (21%)   7,333   6,883   8,324    (17%)
 Cambay              2,732   3,403    (20%)   2,891   2,811   3,472    (19%)
Total Oil and Gas
(million boe) ^3
Oil & Gas - Gross      19.07   15.63     22%   18.83   37.90   31.27     21%
Oil & Gas - Working    11.91    9.13     30%   11.58   23.49   18.20     29%
Interest
IRON ORE ^4 (in
million dry metric
tonnes, or as
stated)
 Sales                 0.2     1.6    (86%)     2.9     3.1     5.8    (47%)
Goa                      0.2     0.8    (75%)     2.8     3.0     4.0    (24%)
Karnataka ^5             0.0     0.7    (98%)     0.0     0.1     1.8    (97%)
 Production of         0.4     1.1    (65%)     3.4     3.7     5.5    (32%)
Saleable Ore
Goa                      0.4     0.7    (42%)     3.4     3.7     4.6    (18%)
Karnataka                0.0     0.5        -     0.0     0.0     0.9        -
 Production ('000
tonnes)
Pig Iron                  82      63      30%      39     121     126     (3%)
Met Coke                  83      65      28%      64     146     128      14%
COPPER- INDIA /
AUSTRALIA
 Copper - Mined           6       5      14%       7      13      11      13%
metal content
 Copper - Cathodes      87      87       0%      88     175     161       9%

Production Summary (Unaudited)



(in '000 tonnes, except as stated)

                                    Q2             Q1             H1
Particulars               FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
                                             YoY                           YoY
COPPER -ZAMBIA
 Mined metal                 45     39      16%     41     86     76      14%
 Copper - Total              61     52      17%     49    110    102       8%
 Integrated                47     33      42%     36     83     68      23%
 Custom                    14     19    (27%)     13     27     34    (21%)
ALUMINIUM
 Alumina - Lanjigarh        205    228    (10%)    218    423    451     (6%)
 Total Aluminum             197    151      30%    185    382    324      18%
Production
Jharsuguda-I                 134     91      47%    124    259    203      27%
Korba-II                      63     60       4%     60    123    121       1%
 Balco 270MW Power         346    387    (10%)    338    684    811    (16%)
Sales
POWER (in million units)
Total Power Sales          2,350  1,435      64%  2,329  4,679  2,851      64%
SEL ^6                     1,940  1,267      53%  1,938  3,879  2,404      61%
MALCO                        221     74     198%    209    431    246      75%
HZL Wind Power               188     94      99%    182    370    200      85%



1. Includes captive  consumption of 3,076  tonnes in H1  FY2013 vs.  2,739 
tonnes in H1 FY  2012, and 1,435 tonnes  in Q2 FY2013 vs.  1,348 tonnes in  Q2 
FY2012.

2. Includes captive consumption of 520,000 ounces in H1 FY2013 vs. 463,000
ounces in H1 FY 2012 and 242,000 ounces in Q2 FY2013 vs. 231,000 ounces in  Q2 
FY2012.

3. Numbers for  corresponding previous  year are prior  to acquisition  as 
Cairn India was acquired on 8th December 2011

4. Iron Ore  sales include  internal sales of  0.18 million  tonnes in  H1 
FY2013 vs. 0.12  million tonnes in  H1 FY2012  and 0.12 million  tonnes in  Q2 
FY2013 vs. 0.05million tonnes in Q2 FY2012.

5. Sales of iron ore from Karnataka were 0.01 million tonnes in Q2  FY2013 
and 0.06 million  tonnes in H1  FY2013 through court  sponsored e-auctions  of 
inventory.

6. Includes production under trial run  of 339 million units in H1  FY2013 
vs. 288 million units in H1 FY2012, and 138 million units in Q2 FY2013 vs. 149
million units in Q2 FY2013.



For further information, please contact:

Investors                                  ir@vedanta.co.in

Ashwin Bajaj                               Tel: +91 22 6646 1531

Senior Vice President - Investor Relations 

Vedanta Resources plc


Media                                      Tel: +44 20 7251 3801

Gordon Simpson

  Finsbury



About Vedanta Resources plc

Vedanta Resources  plc ("Vedanta")  is a  London listed  FTSE 100  diversified 
global natural resources  major. The group  produces aluminium, copper,  zinc, 
lead, silver,  iron  ore,  oil  &  gas  and  commercial  energy.  Vedanta  has 
operations  in  India,  Zambia,  Namibia,  South  Africa,  Ireland,   Liberia, 
Australia and  Sri Lanka.  With  an empowered  talent pool  globally,  Vedanta 
places strong emphasis on  partnering with all its  stakeholders based on  the 
core values of entrepreneurship, excellence, trust, inclusiveness and  growth. 
For more information, please visit www.vedantaresources.com.



Disclaimer

This press release contains "forward-looking statements" - that is, statements
related  to  future,  not  past,  events.  In  this  context,  forward-looking 
statements  often  address   our  expected  future   business  and   financial 
performance,  and  often  contain  words  such  as  "expects,"  "anticipates," 
"intends," "plans," "believes," "seeks,"  "should" or "will."  Forward-looking 
statements by their  nature address  matters that are,  to different  degrees, 
uncertain. For us,  uncertainties arise  from the behaviour  of financial  and 
metals markets including the London  Metal Exchange, fluctuations in  interest 
and or exchange rates  and metal prices; from  future integration of  acquired 
businesses; and from numerous other  matters of national, regional and  global 
scale, including  those of  a political,  economic, business,  competitive  or 
regulatory nature. These uncertainties may cause our actual future results  to 
be  materially  different   that  those  expressed   in  our   forward-looking 
statements. We do not undertake to update our forward-looking statements.





                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


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