Eurasian Natural Res ENRC Q3 Production Report and IMS
Eurasian Natural Res (ENRC) - Q3 Production Report and IMS
RNS Number : 6059Q
Eurasian Natural Resources Corp Plc
08 November 2012
8 November 2012
Eurasian Natural Resources Corporation PLC
November 2012 Interim Management Statement and
Production Report for the Third Quarter ended 30 September 2012
London - Eurasian Natural Resources Corporation PLC ('ENRC' or, together with
its subsidiaries, the 'Group') today announces its November 2012 Interim
Management Statement and its Production Report for the Third Quarter ended 30
September 2012.
ENRC will be hosting a conference call for analysts and investors regarding
the Group's Interim Management Statement and Third Quarter Production Report
today at 9:30am. Conference call details are provided below.
Highlights for the Nine Months ended 30 September 2012
o Revenue decreased sharply compared to the corresponding period, largely due
to lower selling prices for our principal commodities;
o Saleable copper production increased by 31% compared to the corresponding
period;
o Cost of sales increased only moderately compared to the first nine months
of 2011;
o Net debt of US$3.9 billion as at 30 September 2012;
o Organic growth programme on track; capital expenditure year to date of
US$1.7 billion.
Recent Developments and Outlook for the Full Year 2012
o Production expected to be at full available capacity across most of our
principal commodities;
o Revenue to continue to be impacted by the weak commodity price environment,
particularly for ferroalloys and iron ore;
o Planned capital expenditure for the year expected to be approximately
US$2.2 billion; planned total spend in 2013 of US$1.7 billion;
o Capital expenditure review complete; in addition to sustaining investments
of US$3.6 billion, total expansionary spend expected over the next 5 years of
US$4.4 billion, of which US$3.2 billion to be spent on 5 key projects - the
New Aktobe Ferroalloys Plant, Frontier and RTR, followed by the Boss Mining
Concentrator and SSGPO iron ore expansion;
o Good progress with on-going production efficiency programmes to contain
unit cost growth below previous guidance;
o Frontier licence in DRC acquired for US$101.5 million.
"Market conditions and the current pricing environment remain challenging. We
continue to focus on maintaining our industry leading cost position, having
made excellent progress in implementation of cost efficiency programmes across
the Group during the year. Our comprehensive review of capital expenditure is
now complete, with a clear plan to focus on those projects that will be cash
generative in the near term."
Felix J Vulis, Chief Executive Officer
ENRC will be hosting a conference call for analysts and investors regarding
the Group's Interim Management Statement and Third Quarter Production Report
today at 9:30am. The call will be hosted by ENRC's Chief Financial Officer,
Zaure Zaurbekova and Chief Commercial Officer, Jim Cochrane. There will be a
facility available for participants to address questions to the Group's
Executive Management.
Conference call details are as follows:
Dial-in: Standard access international: +44 (0) 20 3003 2666
UK toll free: 0808 109 0700
USA local: 1 212 999 6659
USA toll free: 1 866 966 5335
Password: ENRC
For further information, please contact:
ENRC: Investor Relations
Mounissa Chodieva +44 (0) 20 7389 1879
Charles Pemberton +44 (0) 20 7104 4015
Alexandra Leahu +44 (0) 20 7104 4134
ENRC: Press Relations
Julia Kalcheva +44 (0) 20 7389 1861
M: Communications (Press Relations Advisor to ENRC):
Hugh Morrison +44 (0) 20 7920 2334
Charlotte Kirkham +44 (0) 20 7920 2331
Andrew Benbow +44 (0) 20 7920 2344
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 production of iron ore concentrate and pellet;
the mining and processing of bauxite for the extraction of alumina and the
production of aluminium; the production of copper and cobalt; coal extraction
and electricity generation; and the transportation and sales of the Group's
products. The Group's production assets are largely located in the Republic of
Kazakhstan; other assets, notably the Other Non-ferrous Division, are mainly
located in Africa; the Group also has iron ore assets in Brazil. In H1 2012
the Group's entities employed on average 78,430 (H1 2011: 75,050) people. The
Group currently sells the majority of its products to Russia, China, Japan,
Western Europe and the United States. For the six months ended 30 June 2012,
the Group had revenue of US$3,246 million (H1 2011: US$4,011 million) and
profit attributable to equity holders of the Company of US$463 million (H1
2011: US$1,166 million). ENRC has six operating Divisions: Ferroalloys, Iron
Ore, Alumina and Aluminium, Other Non-ferrous, Energy and Logistics. ENRC is a
UK company with its registered office in London. ENRC's shares are quoted on
the London Stock Exchange ('LSE') and the Kazakhstan Stock Exchange ('KASE').
For more information on ENRC visit the Group's website at www.enrc.com.
Forward-looking Statements
This announcement includes statements that are, or may be deemed to be,
'forward-looking statements'. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects',
'intends', 'may', 'will', or 'should' or, in each case, their negative or
other variations or comparable terminology, or by discussions of strategy,
plans, objectives, goals, future events or intentions. 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. By
their nature, forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. 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. A number of factors could cause results and developments to
differ materially from those expressed or implied by the forward-looking
statements including, without limitation, general economic and business
conditions, industry trends, competition, commodity prices, changes in
regulation, currency fluctuations, changes in business strategy, political and
economic uncertainty. Subject to the requirements of the Prospectus Rules, the
Disclosure and Transparency Rules and the Listing Rules or any applicable law
or regulation, the Group expressly disclaims any obligation or undertaking
publicly to review or confirm analysts' expectations or estimates or to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any changes in the Group's expectations with
regard thereto or any change in events, conditions or circumstances on which
any such statement is based. Nothing in this announcement should be construed
as a profit forecast. The forward looking statements contained in this
document speak only as at the date of this document.
Disclosure and Transparency Rules
The Interim Management Statement ('IMS') and Production Report are prepared 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 and Production Report should not be relied on for any
other purpose or by any other party.
A copy of this announcement will be available on the Group's website at
www.enrc.com.
November 2012 Interim Management Statement ('IMS')
The information in the IMS, unless stated otherwise, relates to the nine
months ended 30 September 2012, and is compared to the corresponding nine
months of 2011. Save as set out in this statement, there have been no material
events, transactions or changes to the financial position of the Group since
30 June 2012. The Group's performance trends from 30 September 2012 to date
remain broadly consistent with those described herein.
Revenue
Group revenue for the first nine months of 2012 deteriorated sharply against
the comparable period of 2011 largely due to lower selling prices for our main
commodities. The fall in prices for iron ore and ferroalloys had the greatest
impact, declining by 26% and 8% respectively. Revenue was further impacted by
lower sales volumes of ferroalloys, chrome ore, iron ore and alumina as well
as the absence of railway line repairs since the disposal of this business.
For the first nine months of 2012, the revenue for the Ferroalloys Division
was significantly lower than in the comparable period of 2011, reflecting
lower realised prices and decreased sales volumes. The exclusion of Tuoli
reduced revenue in the Division by US$66 million compared to 2011. There was a
change in the geographical mix of sales, with an increase in sales to China on
the back of weaker demand in the key markets of Japan, Western Europe and
North America. Average prices in the reporting period decreased by 8% for
ferroalloys and 40% for chrome ore, mainly due to a lower grade of chrome ore
sold during 2012. The Division operated at close to full available capacity
for the period.
In the Iron Ore Division, revenue showed a very significant deterioration
compared to 2011 due to a sharp decline in sales prices. Total sales volumes
saw a modest decline compared to the previous year. The share of higher priced
pellets sold also decreased reducing revenue, although this was partially
offset by higher sales of screenings in 2012. During 2012 the Group increased
its sales of iron ore to China and within Kazakhstan. Average realised prices
declined by 26% during the period. Production was slightly lower than in 2011.
In the Alumina and Aluminium Division, revenue dropped significantly due to a
19% decline in the London Metal Exchange ('LME') average price for aluminium
and lower alumina sales volumes as a result of the production shortfall in the
beginning of the year. Alumina production returned to full capacity in June
2012. Aluminium production was in line with the previously reported period.
In the Other Non-ferrous Division, production and sales volumes of copper
continued to increase. However the positive effect of additional volumes was
offset by sharp declines in sales prices for copper and cobalt products. The
average realised price for copper for the first nine months of 2012 decreased
13% against the comparative period of 2011 and the average realised price for
cobalt metal decreased by 19%.
The Energy Division saw a very strong increase in revenue in the period .
Third-party sales of electricity were higher reflecting the increase in
available capacity. The Division's revenue substantially benefited from sales
of Shubarkol's coal and semi-coke, included from May 2012. Sales of EEC coal
were slightly below the same period in 2011 as a result of higher internal
consumption. Realised third-party sales prices of coal increased 4%, whilst
prices for electricity fell 2%.
In the Logistics Division revenue moderately declined due to lower volumes of
railway line repairs as a result of a disposal of this business in May 2012.
Third-party revenue from freight forwarding services declined slightly.
Costs
Cost of sales moderately increased compared to the first nine months of 2011.
This was mainly due to increased depreciation, higher input materials prices
and wage rates as well as expansion in the Other Non-ferrous operations and
the inclusion of Shubarkol. Depreciation and amortisation costs increased by
around 30% reflecting the higher value of property, plant and equipment, as
well as additional amortisation of mineral rights in the Other Non-ferrous
Division. For the full year we expect D&A costs to be approximately US$650
million. Mineral Extraction Tax fell significantly as a result of lower prices
for chrome and iron ore. Distribution costs saw some increase on the previous
period in 2011 reflecting increased tariffs and transport fares, a higher
proportion of iron ore shipments to China, increased copper volumes and the
inclusion of Shubarkol in 2012. General and administrative expenses increased
mainly as a result of higher labour costs and professional services expenses,
offset by lower taxes and sponsorship and donations paid in the first nine
months of 2012. For the full year we expect social investments to be
approximately US$100 million. Exploration expenses more than doubled against
the prior year period reflecting increased activity in the Other Non-ferrous
Division.
Taxation
ENRC's Effective Tax Rate ('ETR') is expected to be in the range of between
37% and 39% of Profit Before Tax ('PBT') for 2012. This slight increase in the
ETR against guidance given at the Group's Interim Results, is as a result of
the large-scale projects and increased expenditure undertaken in jurisdictions
where no revenues are presently being generated.
Balance Sheet
The Group had gross available funds as at 30 September 2012 of US$1.00 billion
and gross debt of US$4.86 billion.
Capital Expenditure Projects Update
During the nine months of 2012 the principal areas of capital expenditures
were:
· Ferroalloys Division: the New Aktobe Ferroalloys Plant;
· Iron Ore Division: mine expansion at SSGPO;
· Alumina and Aluminium Division: Anode production plant;
· Other Non-ferrous Division: expansion of copper production;
· Energy Division: reconstruction of Power Unit 6; and
· Logistics Division: railcar fleet expansion.
Estimated capital expenditures for the full year in 2012 will be approximately
US$2.2 billion of which US$0.6 billion relates to sustaining capital
expenditure.
Capital Expenditure Review
The Group has completed a review of its capital expenditure programme for the
next 5 year period. Our expansionary programme has prioritised projects with
both the highest returns and shortest payback periods, with the Group's focus
being on the completion of the New Aktobe Ferroalloys Plant and the
development of both the Frontier and RTR copper projects in the Democratic
Republic of the Congo ('DRC'). Optimisation of our expansionary programme has
resulted in the re-phasing of the Boss Mining Concentrator, which will be
delayed by a year, as well as a delay in expansion at SSGPO in Kazakhstan
until 2015. These five key expansionary projects will amount to US$3.2 billion
of the Group's total expansionary spend. We expect expansionary investments
in 2013 of US$1.0 billion.
With the exception of the New Aktobe Ferroalloys Plant, the remaining four key
expansionary projects still require formal Board approval, expected by the end
of 2012 or early in 2013. All other expansionary projects have been
indefinitely deferred, including the development of our Brazilian iron ore
projects and additional power units at in Kazakhstan.
The Group's sustaining capital expenditure projects have also been reviewed so
as to ensure that production volumes for ENRC's key products will be
maintained over the next 5 years. Total sustaining investments over this
period are expected to amount to US$3.6 billion, with spend in 2013 of
approximately US$600 million.
The Group will have additional corporate capital expenditure of US$140 million
in 2013, associated with Programme Arrow, a Group-wide efficiency improvement
project. We expect total capital expenditure in 2013 of around US$1.7
billion.
Acquisitions
As announced as part of our Interim Results, in July 2012 the DRC Government
granted the Group a new mining licence in respect of the Frontier mine for
US$101.5 million. The new Frontier licence will provide feed for the Frontier
processing plant, acquired as part of the transaction with First Quantum
Minerals Ltd, which completed in March 2012.
Outlook
The outlook for the global economy continues to be defined by uncertainty,
leading to weakness, particularly in pricing. Together with the build-up of
ferroalloy inventories in China, currency moves have created cost
opportunities for South African ferroalloy producers, leading to the market
experiencing oversupply and resulting in weaker spot prices. We expect this
trend to continue through to the year end. Regarding iron ore, we do not
foresee any material change to pricing before the year end.
The Group has striven to reduce cost inflation for the full year 2012 against
the guidance given earlier in the year. We anticipate unit cost growth
year-on-year including Mineral Extraction Tax to rise for Ferroalloys by up to
5% and for Iron Ore, Alumina, Coal and Electricity by between 10 and 15%. Some
inflation for materials and energy, higher stripping and mine development
costs, as well as growing D&A charges will continue to be the main costs
drivers for the remainder of 2012. We will remain focused on production
efficiency programmes and cost savings initiatives to maintain our relative
low cost advantage.
Production Report for the Third Quarter ended 30 September 2012
The information in this Production Report, unless stated otherwise, relates to
the three months ended 30 September 2012, and is compared to the corresponding
three months ended 30 September 2011. Production volumes for Q2 2012 are
provided for additional information.
The Ferroalloys Division and the Alumina and Aluminium Division operated at
full available capacity for the quarter. The Energy Division operated at full
available capacity for electricity and coal production and below full capacity
for special coke due to repair works and decreased demand. The Iron Ore
Division operated below full capacity both for concentrate and pellets
production due to equipment repairs. In the Other Non-ferrous Division,
production of copper contained showed exceptionally strong growth against the
corresponding period.
· Ferroalloys Division.Overall gross ferrochrome production increased
by 1.5% compared to Q3 2011 (1.7% increase in high-carbon ferrochrome).
Low-carbon ferrochrome production increased 4.5%, ferrosilicochrome 9.5% and
ferrosilicon 8.3%. High-carbon ferrochrome saleable production decreased by
1.0%, while total saleable ferroalloys production for the quarter was in line
with Q3 2011.
· Iron Ore Division.Iron ore extraction and primary concentrate
production decreased by 13.0% and 10.5%, respectively, against the comparable
period. Total saleable product decreased 7.1% against Q3 2011.
· Alumina and Aluminium Division. Bauxite extraction increased 3.2%
and alumina production 0.2% against Q3 2011. Aluminium production was in line
with Q3 2011.
· Other Non-ferrous Division. Production of saleable copper in Q3
2012 was 9,967 t, a 31% increase versus Q3 2011. Saleable cobalt production
fell 28% to 2,230 t versus Q3 2011.
· Energy Division. Coal extraction by EEC increased by 1.1% compared
to Q3 2011. Electricity generation increased 1.8% and sales to third-parties
decreased 6.2% compared to Q3 2011.
· Logistics Division.The volume of goods transported by rail
decreased 4.2% compared to Q3 2011 as coal volumes to Russia are now
transported using our customers own railcars. The proportion of volumes
attributable to third parties decreased by 1.9 percentage points from Q3 2011.
References to 't' in the Production Report are to metric tonnes unless
otherwise stated and all references to 'kt' are to thousand metric tonnes
unless otherwise stated.
Definition of Run of Mine ('RoM') extraction: uncrushed ore in its natural
state, as when it is blasted.
FERROALLOYS DIVISION
Ore Mining and Processing
Q3 12/ Q3 12/
Q3 2012 Q3 2011¹ Q3 11 Q2 2012 Q2 12
change change
Chrome ore
Ore Extraction (Run-of-Mine,
'ROM') 000 t 1,184 1,166 1.5% 1,267 (6.6%)
Grade, % Cr2O3 39.1 37.9 39.0
Total Ore Processed 000 t 1,577 1,541 2.3% 1,480 6.6%
Grade, % Cr2O3 37.4 36.4 37.3
Saleable ore production 000 t 1,006 921 9.2% 974 3.3%
Grade, % Cr2O3 47.5 48.5 47.4
Internal consumption of
saleable ore 000 t 771 751 2.7% 734 5.0%
Percentage 76.6% 81.5% 75.0%
Manganese ore
Ore Extraction ('ROM') 000 t 796 786 1.3% 750 6.1%
Grade, % Mn 20.6 21.0 19.5
Total Ore Processed 000 t 1,088 999 8.9% 1,001 8.7%
Grade, % Mn 18.6 19.6 17.9
Saleable concentrate production 000 t 313 359 (12.8%) 271 15.5%
Grade, % Mn 36.2 35.1 36.0
Internal consumption of
saleable concentrate 000 t 82 104 (21.2%) 101 (18.8%)
Percentage 26.2% 29.0% 37.3%
Note 1: Q3 2011 numbers adjusted to exclude Tuoli consumption
Chrome ore extraction in Q3 2012 amounted to 1,184 kt, an increase of 1.5% on
Q3 2011 and a decrease of 6.6% on Q2 2012. The Division produced 1,006 kt of
saleable chrome ore, an increase of 9.2% on Q3 2011 and 3.3% against Q2 2012.
Internal consumption of saleable chrome ore in Q3 2012 increased 2.7% versus
the comparable period of 2011 and 5.0% against Q2 2012.
Manganese ore extraction increased 1.3% versus Q3 2011 and 6.1% versus Q2
2012. Saleable manganese concentrate production decreased by 12.8% compared to
Q3 2011 to 313 kt following changes in market demand and increased 15.5%
against Q2 2012.
Production at Zhairem GOK, which mainly sells manganese concentrates for
export, decreased 15.0% to 164 kt (34.1% Mn) against Q3 2011 (193 kt; 31.6%
Mn) but increased 5.8% compared to Q2 2012 (155 kt; 34.0% Mn), reflecting
seasonal market demand. Production at Kazmarganets (38.6% Mn), which supplies
manganese concentrate to the Aksu ferroalloys plant for use in
silico-manganese production, amounted to 149 kt, a decrease of 10.2% from Q3
2011 (166 kt; 39.0% Mn) and an increase of 28.4% on Q2 2012 (116 kt; 38.6%
Mn). The proportion of total manganese concentrate production consumed
internally was slightly lower in Q3 2012, at 26.2% (Q3 2011: 29.0%) and
decreased by 18.8% against Q2 2012.
Ferroalloys Production
Q3 12/ Q3 12/
Q3 2012 Q3 2011¹ Q3 11 Q2 2012 Q2 12
change change
Gross Production
Ferrochrome 000 t 341 336 1.5% 329 3.6%
- High-carbon 000 t 305 300 1.7% 293 4.1%
- Medium-carbon 000 t 13 14 (7.1%) 12 8.3%
- Low-carbon 000 t 23 22 4.5% 24 (4.2%)
Ferrosilicochrome 000 t 46 42 9.5% 45 2.2%
Silicomanganese 000 t 40 48 (16.7%) 48 (16.7%)
Ferrosilicon 000 t 13 12 8.3% 13 0.0%
Total Ferroalloys 000 t 440 438 0.5% 435 1.1%
Internal Consumption of
ferroalloys
High-carbon Ferrochrome 000 t 31 28 10.7% 29 6.9%
Ferrosilicochrome 000 t 26 27 (3.7%) 26 0.0%
Other alloys 000 t 2 2 0.0% 2 0.0%
Total Ferroalloys 000 t 59 57 3.5% 58 1.7%
Percentage 13.4% 12.8% 13.3%
Saleable Production
Ferrochrome 000 t 311 309 0.6% 300 3.7%
- HC FeCr 000 t 275 273 0.7% 264 4.2%
- MC FeCr 000 t 13 14 (7.1%) 12 8.3%
- LC FeCr 000 t 23 22 4.5% 24 (4.2%)
Ferrosilicochrome 000 t 20 15 33.3% 19 5.3%
Silicomanganese 000 t 38 47 (19.1%) 47 (19.1%)
Ferrosilicon 000 t 12 11 9.1% 12 0.0%
Total Ferroalloys 000 t 381 381 0.0% 377 1.1%
Table may not sum precisely due to rounding.
Note 1: Q3 2011 numbers adjusted to exclude Tuoli consumption
In Q3 2012, the Ferroalloys Division produced 381 kt of saleable ferroalloys,
in line with production in Q3 2011 and a 1.1% increase against Q2 2012.
Ferrosilicochrome and ferrosilicon saleable production increased 33.3% and
9.1% respectively compared to Q3 2011 while silicomanganese saleable
production decreased 19.1% against Q3 2011 due to capital repairs at Furnace
13 at Aksu smelter during the reporting period.
Serov contributed 57 kt of saleable ferroalloy production in Q3 2012 (Q3 2011:
56 kt; Q2 2012: 58 kt).
IRON ORE DIVISION
Q3 12/ Q3 12/
Q3 2012 Q3 2011 Q3 11 Q2 2012 Q2 12
change change
Ore Extraction ('ROM') 000 t 9,883 11,358 (13.0%) 9,893 (0.1%)
Grade, % Fe 31.5 32.4 31.0
Primary concentrate production 000 t 4,142 4,629 (10.5%) 3,890 6.5%
Grade, % Fe 65.2 65.2 65.3
Saleable concentrate production 000 t 2,307 2,550 (9.5%) 1,803 28.0%
Percentage of total saleable
product 58.7% 60.3% 50.1%
Saleable pellet production 000 t 1,620 1,677 (3.4%) 1,796 (9.8%)
Percentage of total saleable
product 41.3% 39.7% 49.9%
Total Saleable Product 000 t 3,927 4,227 (7.1%) 3,599 9.1%
In Q3 2012, the Iron Ore Division extracted 9,883 kt of iron ore, a decrease
of 13.0% on Q3 2011 (11,358 kt) and 0.1% on Q2 2012 (9,893 kt). The Division
produced 4,142 kt of primary concentrate, a decrease of 10.5% on Q3 2011 but
an increase of 6.5% compared to Q2 2012. Ore mining decreased against previous
periods mainly due to availability of mining equipment at Kacharsky. Primary
concentrate production decreased in Q3 2012 reflecting planned repair works at
the processing plant in July and problems with the slimes pumping system at
the beginning of September.
Saleable concentrate production (with an iron content of 65.3%) was 2,307 kt,
a decrease of 9.5% compared to Q3 2011 (2,550 kt) but an increase of 28.0%, or
504 kt, compared to Q2 2012 (1,803 kt). Pellet production (with an iron
content of 62.7%) was 1,620 kt, a decrease of 3.4% on Q3 2011 (1,677 kt) and
9.8% on Q2 2012 (1,796 kt). The decrease in concentrate and pellet production
against Q3 2011 was caused by repair works both at the processing and
pelletizing plants during the period. Total saleable product volumes were 7.1%
lower than in Q3 2011 and 9.1% higher than in Q2 2012.
ALUMINA
ALUMINA AND ALUMINIUM DIVISION
Q3 12/ Q3 12/
Q3 2012 Q3 2011 Q3 11 Q2 2012 Q2 12
change change
Bauxite extraction 000 t 1,429 1,385 3.2% 1,310 9.1%
Grade, % Al2O3/SiO2 42.6/11.7 42.8/11.6 43.2/11.7
Alumina production 000 t 429 428 0.2% 376 14.1%
Internal consumption of
alumina 000 t 121 121 0.0% 120 0.8%
Percentage 28.2% 28.3% 31.9%
Aluminium production 000 t 63 63 0.0% 62 1.6%
Gallium production kg 4,527 4,760 (4.9%) 3,797 19.2%
Electricity
Electricity generation GWh 514 527 (2.5%) 564 (8.9%)
Alumina & Aluminium
Division own electricity
consumption GWh 384 378 1.6% 374 2.7%
Percentage 74.7% 71.7% 66.3%
Electricity supply to
other Group Divisions GWh 96 108 (11.1%) 156 (38.5%)
Percentage 18.7% 20.5% 27.7%
Third-parties electricity
supply GWh 35 41 (14.6%) 34 2.9%
Percentage 6.8% 7.8% 6.0%
In Q3 2012, bauxite extraction was 3.2% higher than in Q3 2011 and 9.1% higher
than in Q2 2012. Alumina production recovered and stabilised at full capacity
during Q3 2012, with an increase of 0.2% versus Q3 2011 and 14.1% versus Q2
2012.
Internal consumption of alumina amounted to 121 kt (in line with Q3 2011 and
0.8% higher than in Q2 2012) representing 28.2% of total alumina production
and consistent with the aluminium smelter running at its full 250 ktpa
capacity.
Primary aluminium production in Q3 2012 was 63 kt, consistent with Q3 2011 and
a slight increase of 1.6% on Q2 2012.
Electricity generation in Q3 2012 decreased 2.5% on Q3 2011 and 8.9% on Q2
2012 mainly due to unplanned repair works on one of the turbines. Supply of
electricity to other Group Divisions decreased 11.1% against Q3 2011 and 38.5%
against Q2 2012 reflecting lower generation capacity and increased internal
consumption due to higher alumina production. Electricity supply to
third-parties decreased by 6 GWh, or 14.6%, against Q3 2011 and 2.9% against
Q2 2012.
OTHER NON-FERROUS DIVISION
Copper and Cobalt Production
Q3 12/ Q3 12/
Q3 2012 Q3 2011 Q3 11 Q2 2012 Q2 12
change change
Copper
Ore Extraction ('ROM') 000 t 320 486 (34.1%) 418 (23.4%)
Grade, %Cu 2.83 2.70 3.81
Saleable copper contained¹ t 9,967 7,596 31.2% 8,505 17.2%
Cobalt
Ore Extraction ('ROM') 000 t 327 242 35.1% 341 (4.1%)
Grade, %Co 1.27 1.58 1.51
Saleable cobalt contained¹ t 2,230 3,099 (28.0%) 2,615 (14.7%)
Note: 1. Production numbers for saleable copper and cobalt refer to tonnes of
contained metal. Contained metal consists of total units, whether in metal
form or metal units contained in concentrate and sludge, net of internal
consumption, but excludes copper contained in cobalt concentrate.
Copper ore extraction in Q3 was 34.1% lower than in Q3 2011 and 23.4% lower
than Q2 2012. Ore extraction was matched to crushing capacity which was
constrained by power availability.
Copper grades started to decline from August 2012, with production at Kabolela
being stopped at the end of September 2012 due to high calcium content.
Saleable copper production for Q3 2012 was 9,967 t, an increase of 31.2% over
Q3 2011 (7,596 t) and 17.2% higher than Q2 2012 (8,505 t). Copper production
in Q3 2012 benefitted from the high grades in Q2 and the first month of Q3
2012.
The production of saleable copper metal at the SX/EW plant at Boss Mining in
Q3 2012 was 3,735 t (Q3 2011: 1,353 t; Q2 2012: 2,403 t). The increase was due
to the commissioning of bay two and three of the cobalt SX/EW plant. This
allows more efficient plating of copper requiring less electricity.
Cobalt contained production in Q3 2012 was 28.0% below Q3 2011 levels and
14.7% below Q2 2012 due to lower grades, power constraints in the DRC and
Zambia, as well as the effect of higher internal consumption at Chambishi.
ENERGY DIVISION
Q3 12/ Q3 12/
Q3 2012 Q3 2011 Q3 11 Q2 2012 Q2 12
change change
EEC
Coal
Coal extraction total 000 t 4,317 4,272 1.1% 4,392 (1.7%)
EEC consumption of coal 000 t 1,940 1,940 0.0% 1,972 (1.6%)
Percentage 44.9% 45.4% 44.9%
Coal supply to other Group
Divisions 000 t 1,122 1,183 (5.2%) 1,157 (3.0%)
Percentage 26.0% 27.7% 26.3%
Third-parties coal supply 000 t 1,086 1,184 (8.3%) 1,186 (8.4%)
Percentage 25.2% 27.7% 27.0%
Shubarkol
Coal
Coal extraction total 000 t 2,144 - - 927 -
Internal consumption of coal (for - - -
special coke production) 000 t 109 68
Percentage 5,1% - - 7,3% -
Coal supply to other Group - - -
Divisions 000 t 241 136
Percentage 11.2% - - 14.7% -
Third-parties coal supply 000 t 1,927 - - 673 -
Percentage 89.9% - - 72.6% -
- -
Special Coke - -
Special coke production 000 t 49 - - 34 -
Special coke supply to other - - -
Group Divisions 000 t 30 21
Percentage 61.2% - - 61.8% -
Third-parties special coke supply 000 t 11 - - 9 -
Percentage 22.4% - - 26.5% -
Electricity¹
Electricity generation GWh 3,218 3,161 1.8% 3,229 (0.3%)
Energy Division own electricity
consumption GWh 245 241 1.7% 253 (3.2%)
Percentage 7.6% 7.6% 7.8%
Electricity supply to other Group
Divisions GWh 2,653 2,579 2.9% 2,544 4.3%
Percentage 82.4% 81.6% 78.8%
Third-parties electricity supply GWh 320 341 (6.2%) 435 (26.4%)
Percentage 9.9% 10.8% 13.5%
Note: 1. Electricity consumption and supply numbers may not round precisely
due to the purchase of small volumes of electricity from third-parties.
In Q3 2012, EEC extracted 4,317 kt of coal from the Vostochny mine, an
increase of 1.1% versus Q3 2011 and a decrease of 1.7% on Q2 2012 as a result
of seasonal demand.
Shubarkol coal production in the period was 2,144 kt. Special coke production
in Q3 2012 was 49 kt.
Electricity generation in the period was 3,218 GWh, an increase of 1.8% on Q3
2011 and a slight decrease of 0.3% on Q2 2012 also due to seasonal demand.
Electricity supplied by the Energy Division to other Group Divisions was 2,653
GWh, an increase of 2.9% on Q3 2011.
Third party electricity sales of 320 GWh decreased 6.2% compared to Q3 2011
and 26.4% against Q2 2012, reflecting the change in balance between
electricity generation and internal Group consumption.
LOGISTICS DIVISION
Q3 12/ Q3 12/
Q3 2012 Q3 2011 Q3 11 Q2 2012 Q2 12
change change
Volume of products transported by
railway 000 t 14,984 15,635 (4.2%) 13,681 9.5%
Percentage of products volume
attributable to third parties 13.3% 15.2% 9.4%
In Q3 2012, the Logistics Division transported 14,984 kt of products by rail,
a decrease of 4.2% compared to Q3 2011 and increased 9.5% against Q2 2012.
Since Q2 2012, coal shipments to Russia have been transported by our
customers' own fleets.
A smaller proportion of third-party volumes were transported in Q3 2012
(13.3%) than in the comparable period (Q3 2011: 15.2%).
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUGGGGGUPPPUM -0- Nov/08/2012 07:01 GMT
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