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/EWplant 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/EWplant. 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
Eurasian Natural Res ENRC Q3 Production Report and IMS
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