Copper Zambia
· Mined metal production at 24kt, up 12% y-o-y
· Custom production at 32kt, up 96% y-o-y
Kuldip Kaura, Chief Executive Officer, Vedanta Resources plc, said: "We have delivered a robust quarter with EBITDA significantly higher than last year, while the EBITDA margin remained strong. Our ramp-up plans across our well-invested assets are on track and are delivering industry-leading growth. We are looking forward to a strong Q4 which will enable us to end the year with healthy cash generation. With the continued strength in the commodity markets, combined with Vedanta's attractive commodity mix and exposure to Indian growth, we will deliver superior shareholder returns, while maintaining a strong balance sheet."
Third quarter FY 2018 vs. previous quarters
Mined metal production was 24,000 tonnes during Q3 FY2018, up 12% y-o-y primarily on account of improved mined output from Konkola driven by higher equipment availability and positive results from focussed OEM supervision of trackless equipments. The mined metal production was lower by 2% q-o-q, primarily on account of lower copper recoveries at the Tailing Leach Plant (TLP) and the impact of heavy rains in Zambia on the Nchanga open pit operations.
Custom volumes at 32,000 tonnes were significantly higher y-o-y due to improved third party concentrate availability and higher throughput post a biennial shutdown of 40 days in Q3 FY2017.
Q3 FY2018 unit CoP (excluding royalties and unrealized gains/losses on Kwacha denominated VAT receivables) of USc 251/lb was 9% and 43% higher on a q-o-q and y-o-y basis. The higher cost in comparison to the previous quarter was as a result of lower cobalt credits due to lower cobalt input grade from open pit, higher secondary development at Konkola mine which will pave way for future production ramp up and one off costs associated with pump chamber maintenance as part of improvement in dewatering efficiencies, silt removal from TLP downstream as part of our rainy season preparedness & zero discharge norms.
Revenue for the quarter was at US$ 352 million, higher 2% q-o-q and 71% y-o-y, primarily due to higher copper prices and increased custom sales volumes.
Water levels at the Kariba Dam have improved following the monsoon season. Power cuts in the country have been stopped but the force majeure declared by ZESCO and CEC continues.
Integrated volume is expected to improve sequentially in Q4 FY2018 as a result of sustained secondary developments and production from a new area at Konkola through Business Partners, enhanced access to high grade ore body post waste mining at open-pits and improved plant availabilities resulting from focused preventive maintenance programmes.
Nine months FY2018 vs nine months FY2017
Mined metal production was at 69,000 tonnes, 13% lower y-o-y and integrated volume was at 65,000 tonnes, lower compared to mined metal production due to an increase in the concentrate and cobalt alloy inventory which was liquidated in Janaury 2018. Custom volumes were at 90,000 tonnes, 71% higher y-o-y.
Revenue for the period was US$ 975 million, 60% higher mainly due to higher realized LME prices and increased custom sales volumes. As a result, EBITDA was at US$ 35 million, 96% higher y-o-y.
Full-year production is expected at around 95-100kt of integrated production and 100-110 kt of custom production. CoP (excluding royalties and unrealized gains/losses on Kwacha denominated VAT receivables) for Q4 FY2018 is expected at US cents 200-220 per pound.
