Vedanta Slumps Most in 7 Weeks on Lower Copper Output in Zambia
Vedanta Resources Plc (VED), the India-focused metals and oil producer, fell the most in seven weeks in London trading after saying copper output in Zambia declined and iron-ore mining in Karnataka state remains halted.
Vedanta dropped as much as 5.3 percent to 1,013 pence, the biggest slump since Aug. 20, and was at 1,023 pence by 10:21 a.m. Copper production at Vedanta’s unit in Zambia fell 26 percent to 34,000 tons in the fiscal second quarter because of a suspension of mining operations, it said in a statement today.
While a court lifted restrictions on Vedanta’s mining in Karnataka, the company still needs “final statutory clearances” to restart operations “shortly,” it said. Court hearings have resumed on a ban on Vedanta’s mining in Goa. Vedanta lowered its forecast for Zambian copper output to 140,000 tons this fiscal year because of a slower ramp up at its Konkola unit. It maintained the production cost at 230 cents a pound.
The forecast cut “will result in small downgrades to our estimates,” Ben Davis, an analyst at Liberum Capital Ltd. in London, said in a note to investors. “The timeframe for possible lifting of the iron-ore ban remains inexplicit, typical for Indian bureaucracy.”
In oil and gas, Vedanta increased its so-called average gross operated production to a record 213,299 barrels a day in the three months ended Sept. 30 from 207,245 a year earlier, it said.
Vedanta was primarily a mine operator before it completed in 2011 the purchase of a controlling stake in oil and gas explorer Cairn India Ltd. (CAIR) for $8.67 billion, giving it access to India’s biggest onshore oilfield.
Refined zinc output fell to 106,000 tons from 114,000 tons, while aluminum production rose 2 percent to 200,000 tons, Vedanta said. Alumina production slumped 43 percent to 116,000 tons after disruptions at the Lanjigarh refinery.
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