JOHANNESBURG (miningweekly.com) - London-listed Vedanta Resources said on Friday that first-quarter integrated copper production at its Konkola Copper Mines declined by 11%, after a national power grid failure in Zambia.

Production dropped to 34 000 t in the quarter ended June 30.

However, the mined metal production increased by 26% to 24 000 t and the company was able to produce almost 28% more copper cathodes at 55 000 t, compared with the corresponding quarter.

Vedanta said in a statement that its Zambian operations had now recovered from the impact of the power outage.

The group's earnings before interest, tax, depreciation and amortisation (ebitda) was more than double during the quarter at $72,1-million, compared with the corresponding prior quarter, mainly on account of higher realisations reflecting recovering global commodity prices.

At the Konkola Deep Mine, which is aimed at expanding the production of copper ore at Konkola from two-million tons a year to 7,5-million tons a year, the company had now started with the mine development. Vedanta reported that construction work on the bottom shaft sinking was on schedule.

Meanwhile, the company's cathode production at 77 000 t was about 4% lower than the previous quarter owing to a planned 22 days shutdown at the end of June and into July, while mined metal production at its Australian mines was stable at 7 000 t.

Ebitda for the company's copper operations in India and Australia for the quarter was $65,2-million, over 2,5 times the Ebitda in the corresponding prior quarter. Earnings benefited from recovering copper prices in 2010 at Vedanta's Australian mining operations and higher by-product credits at its Indian smelting operations at Tuticorin.

The company said that work on a new 400 000-t/y copper smelter and associated 160-MW captive power plant is progressing on schedule.

During the company's first quarter, Vedanta reported the highest-ever commercial power sales at 1,16-billion units of power, compared with 585-million units in the same quarter last year.

Higher power sales were mainly on account of surplus power sales from the Jharsuguda captive power plant. The boiler light-up for the first 600-MW unit of the 2 400-MW coal-based commercial power plant at Jharsuguda was done at the end of June, and was planned to be commissioned in September 2010.

The remaining three units were expected to be progressively synchronised by the end of the company's first quarter in 2012.

The company had also signed the engineering, procurement and construction (EPC) contract for its 1 980-MW supercritical independent power producer project at Talwandi Sabo in India.

Activities had now started on site and piling work is currently under progress. Vendanta expected the first unit to be commissioned by the fourth quarter of 2013 and completion of the project by 2014.

Ebitda achieved during the quarter from the energy business was $56,5-million compared with $38,7-million in the corresponding period, owing to higher volumes, partially offset by lower realisations and increased cost of coal.

Aluminium production during the quarter was upped by 13% to 141 000 t, as the company completed the commissioning of its 500 000-t/y smelter at Jharsuguda.

The company's Ebitda for its aluminium business doubled compared with the comparable period last year at $43,2-million, reflecting higher volumes and higher commodity prices, partially offset by the residual overhead cost of a closed smelter and the increased cost of coal.
Vedanta expected the 1,25-million tons a year Jharsuguda aluminium smelter project to tap first metal in the third quarter of 2011.

Meanwhile, the Indian government had raised export duty on iron-ore lumps from 10% to 15% while maintaining a duty on iron-ore fines at 5% during the quarter.

However, Vedanta subsidiary in India, Sesa Goa, produced and sold 6,4-million tons and 5,4-million tons of iron-ore, an increase of 30,6% and 15% respectively as compared with the same period last year.

The increase was due to the contribution from its new iron-ore business, Dempo's operations, of 1,3-million tons in production and 1,2-million tons in sales.

Ebitda for the company's iron-ore business reached $333,8-million, over four times compared with the corresponding prior quarter owing to the higher volumes and higher iron-ore prices, partially offset by increased royalty rates, export duty and an increase in railway freight.

Lastly, Vedanta's zinc, lead and silver business achieved Ebitda of 41% higher than the corresponding prior period at $219,1-million, hiking the company's total earnings to a record $794-million for its first quarter.