JOHANNESBURG (miningweekly.com) – Higher commodity prices and production volumes contributed to a significant year-on-year increase in diversified miner Vedanta Resources’ revenue and earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter ended June 30.

Revenues rose by 32% year-on-year to $3.09-billion for the first quarter of the 2018 financial year, compared with revenue of $2.34-billion in the first quarter of the 2017 financial year.

Group Ebitda increased by 48% year-on-year to $777.8-million for the quarter under review, compared with $527.1-million in the prior comparable period.

“Our financial position remains robust, with total cash and liquid investments of $7.4-billion and undrawn committed facilities of $1.1-billion as at June 30,” CEO Tom Albanese said in a statement on Wednesday.

During the quarter under review, debt and net debt were reduced to $16.8-billion and $9.4-billion respectively, compared with $18.2-billion and $8.5-billion respectively, as at March 31. The group reduced its gross debt by a further $385-million after June 30.

In August, Vedanta also announced a comprehensive refinancing plan of $1.84-billion funded through a mix of bank loans and bonds.

The transaction is leverage neutral and extends the company’s average debt maturity by 1.5 years, lowers its average cost of borrowing and results in no significant debt maturities until December 2018.

The transaction comprised a seven-year $1-billion bond issuance at a coupon of 6.125% and $840-million bank loan commitments secured from global and Indian banks with final maturity of five years.

Proceeds from the bond issuance were used towards part refinancing of the 2019 and 2021 bonds.

ZINC AND COPPER
"Our zinc and oil and gas businesses have delivered a strong quarter. Zinc prices have strengthened since the quarter end on continued global supply deficits,” Albanese noted.

The group’s Zinc International business produced 32 000 t of zinc in the June quarter, 25% lower year-on-year and 22% lower quarter-on-quarter, mainly owing to the planned shutdown of the acid plant and lower recoveries at the Skorpion zinc mine, in South Africa’s North West province.

Skorpion’s output decreased by 42% year-on-year and 36% quarter-on-quarter to 14 000 t.

Albanese pointed out that the Gamsberg zinc project, in South Africa’s Northern Cape province, remains on course to start production in mid-2018.

Albanese, meanwhile, said the group remained committed to making improvements at its Zambia copper operations.

Fleet availability at the Konkola mine improved to 53% in the June quarter, compared with 23% in the March quarter.

“Productivity improvements at the Nchanga openpits, along with concentrator plant availability of 88% and tailings leach plant availability of 86%, has led to exit integrated production of 8 000 t in June, with the trend continuing into July,” he noted.

Mined metal production was 30% lower year-on-year, at 20 000 t, owing to lower equipment availability at the Konkola mine and availability at tailings leach plant compared with last year, which have now improved significantly.

Vedanta still expects to achieve integrated production of 95 000 t to 110 000 t for the full 2018 financial year, while the cost of production has been revised upwards to $2/lb to $2.20/lb.