Diversified miner Vedanta Resources on Monday announced that it had delivered strong earnings before interest, taxes, depreciation and amortisation (Ebitda) and drove steady margins in the first quarter of the 2019 financial year, which ended on June 30.
The margins, the miner highlighted, were driven by record volumes in aluminium, higher production in oil and gas, as well as supportive commodity prices.
“We are excited about the growth across our portfolio in zinc, aluminium, oil and gas. The projects are advancing well to meet key milestones and we are confident of a progressive volume uplift in the coming quarters,” CEO Kuldip Kaura commented.
Vedanta’s financial position remains robust, with total cash and liquid investments totalling $5.2-billion and undrawn committed facilities totalling $700-million as at June 30.
The miner’s debt, however, increased to $15.9-billion gross debt and $10.7-billion net debt, on account of the acquisition and consolidation of Electrosteel Steels (ESL).
Mined metal production for Vedanta’s Zinc India operations was 212 000 t, 9% lower year-on-year and down 17% quarter-on-quarter. The decrease, the miner noted, was on account of the closure of opencast operations as Zinc India transitioned to full underground mining during the quarter.
Mined metal production from underground mines was up by 13% year-on-year and 7% quarter-on-quarter.
Integrated zinc production was down 11% year-on-year and 17% quarter-on-quarter to 172 000 t on account of lower availability of mined metal. Integrated lead production was at 42 000 t, up 20% year-on-year and in line with the availability of lead mined metal and down 16% quarter-on-quarter owing to maintenance-related shutdowns.
Integrated silver production was 4.4-million ounces, up 20% year-on-year owing to higher Sindesar Khurd mine production and better silver grades. Sequentially, silver production declined by 19% on account of lower lead production.
Zinc cost of production (CoP) before royalties during the quarter was at $1 043/t, 7% higher year-on-year and 13% higher quarter-on-quarter primarily on account of lower overall volumes owing to opencast mine closures, input commodity inflation and the impact of a long-term wage settlement.
Mined metal and refined zinc/lead production in the 2019 financial year is expected to increase progressively during the year, with the continued ramp-up of underground mines, and will be slightly higher than that of last year despite the closure of opencast operations, Vedanta said.
The company further noted that silver production is expected to be in the range of between 21-million and 23-million ounces, and CoP before royalties is projected to be in the range of $950/t to $975/t for the full year.
“We are on track for ramp-up of mined metal production to 1.2-million tonnes by the 2020 financial year. Planning for the next phase of expansion from 1.2-million to 1.35-million tonnes a year capacity, is also under way,” the miner added.
Vedanta’s Zinc International business, meanwhile, produced 25 000 t of zinc in the first quarter – a 20% year-on-year and 28% quarter-on-quarter decrease.
Production at Skorpion, in Nambia, during the quarter was 10 000 t, 24% lower year-on-year owing to lower zinc grades and 53% lower quarter-on-quarter mainly on account of a planned maintenance shutdown.
Production at Black Mountain Mining was 15 000 t, 17% lower year-on-year on account of lower grades and higher by 15% quarter-on-quarter on account of higher throughput and improved recoveries.
At Gamsberg, in South Africa’s Northern Cape, almost 100% of pre-stripping including 67-million-tonnes of waste excavation, has been completed, in line with the plan. 500 000 t of ore stockpile has been built ahead of the plant feed.
Vedanta Resources is expecting commercial production from the concentrator plant in September, with between 9 and 12 months to ramp up to full production of 250 000 t/y.
At Skorpion, pit 112 continues to feed ore to the refinery, with over 50% of waste pre-stripping having been completed. Full completion is expected by the fourth quarter of the 2019 financial year. Ore mining and metal production is expected to ramp up from the second quarter, with all production at Skorpion, going forward, being mined from pit 112.
Mined metal production for copper production in Zambia was about 23 000 t during the first quarter of the 2019 financial year, up 15% year-on-year and 6% quarter-on-quarter primarily on account of improved feed grades from tailings and higher copper recoveries at the tailing leach plant.
“This was achieved as a result of our focused preventive maintenance programmes, partially offset by maintenance breakdown at our Konkola Underground mine which has since been rectified,” Vedanta noted.