Vedanta Q2 metal production affected by technical snags

Despite the hurdles, the firm led by billionaire Anil Agrawal posted a record aluminium production of 2.96 lakh tonnes during the September quarter.

By: PTI | New Delhi | Updated: October 10, 2016 5:31 pm
Vedanta achieved higher mined metal production at Zinc India and this upward trend is expected to continue in the second half. Vedanta achieved higher mined metal production at Zinc India and this upward trend is expected to continue in the second half.

Mining conglomerate Vedanta today said its production of zinc, copper and aluminium was affected during the July-September quarter due to reasons such as power outages, technical snags among others.

Despite the hurdles, the firm led by billionaire Anil Agrawal posted a record aluminium production of 2.96 lakh tonnes during the September quarter and saw its power sales rise year-on-year (y-o-y) helped by commissioning of additional units at TSPL and BALCO over the last year.

The company said copper production from Tuticorin smelter was 97,000 tonnes, marginally lower q-o-q.

“During the quarter, production was affected by an unplanned outage for ten days due to a boiler leakage at the smelter,” it added.

In the aluminium segment, Vedanta said commissioning of pots at first line of the 1.25 million tonnes per annum (MTPA) Jharsuguda-II aluminium smelter was completed at the end of July 2016.

“However, it was impacted by a power outage in early August, following which 168 pots were taken out of production. The impacted pots are currently being rectified, and 10 pots have re-started in early October 2016,” it added.

Similarly its Balco facility too faced issues during the quarter.

“BALCO-II smelter was commissioned, with all 336 pots operational in August. However, there was a technical issue in early September, due to which 167 pots were taken out of production. Rectification work is in progress and these pots are expected to be re-started by Q4 2016-17,” Vedanta said.

In Zinc, the firm’s mines metal production increased primarily due to significantly higher production at Rampura Agucha open cast mine compared to Q1, when there was high waste excavation, in accordance with the waste-ore sequence.

However, it said: “Refined zinc and lead volumes during the quarter were lower y-o-y and higher q-o-q, in line with the mined metal production,.”

Commenting on the firm’s performance, Vedanta Ltd CEO Tom Albanese said the firm delivered a strong operational performance during the June quarter.

“We have progressed on our ramp-up of aluminium and though we had some operational challenges, our full year volumes are not expected to be materially impacted,” he added.

Vedanta achieved higher mined metal production at Zinc India and this upward trend is expected to continue in the second half, Albanese noted.

“We are extremely pleased that shareholders have approved the proposed Vedanta Ltd–Cairn India merger last month, and we expect the transaction to complete in the first quarter of calendar year 2017. This is an important strategic step in simplifying the Group,” he said.

Vedanta Ltd’s mined zinc production fell by 20 per cent to 1.92 lakh tonnes (LT) in July-September quarter this fiscal from 2.40 LT in the year-ago period.

Mined production was at 3,18,000 tonnes in the first half of 2016-17, lower than H1 2015-16 mainly due to lower output from the Rampura Agucha open cast mine as per the mine plan.

Combined production from all underground mines in H1 rose 83 per cent y-o- y, as it transitions the Rampura Agucha mine from open pit to underground.

Iron ore production at Goa was 0.5 million tonnes (MT) and sales were 0.3 MT during the September quarter. Mining activities were lower in Q2, as usual, due to the monsoon season. Mining and shipments have resumed from end September.

At Karnataka, ore production was 0.9 MT and sales were 0.5 MT. The sales were lower due to lower e-auction sales and dispatches. However, substantial quantity has been contracted through e-auction in end-Q2, which will be dispatched in Q3.

In April-September this fiscal, production at Goa was 2.9 MT and sales were 2.4 MT, while in Karnataka production was 1.7 MT and sales were 1 MT during the same period.

On the brighter side, its production of copper cathodes rose by 3 per cent to 97,000 tonnes in July-September this fiscal from 94,000 tonnes during the same period in 2015-16.

Similarly, production in H1 2016-17 was marginally higher at 198,000 tonnes of cathodes.

Vedanta Ltd’s Aluminium output was a record at 5,41,000 tonnes in H1, 17 per cent higher y-o-y, mainly on account of ramp-up of the Jharsuguda-II and BALCO-II smelters.

Alumina production was 5 per cent higher at 5,67,000 tonnes due to the recommencement of the second stream of the Lanjigarh refinery from April 1, 2016.

“We expect to produce 1.4 MTPA of Alumina and 1.1 MTPA of Aluminium (excluding trial run production) in 2016-17,” the firm said.

During the September quarter, the company said power sales from Talwandi Sabo Power Ltd (TSPL) were significantly higher during the quarter. The third 660 MW unit at TSPL achieved Commercial Operation Date (COD) on August 24, 2016 and was capitalised on September 1, 2016.

The Jharsuguda 600 MW power plant operated at a lower Plant Load Factor (PLF) of 50 per cent in Q2 2016-17 (PLF 60 per cent in Q2 2015-16, 74 per cent in Q1 2016-17) due to power evacuation constraints.

The 600 MW BALCO IPP units (2×300 MW) operated at a PLF of 54 per cent in Q2 due to weak power market.

The MALCO power plant operated at a lower PLF of 20 per cent in Q2 2016-17 (61 per cent in Q2 2015-16 and 44 per cent in Q1 2016-17) due to lower offtake from Telengana State Electricity Board (TSEB).

“We have entered into a contract with TSEB for power supply from June to May 2017, following completion of sales contract with Tamil Nadu Electricity Board. However, we are entitled to compensation at 20 per cent of contracted rate for off-take below 85 per cent of contractual quantity,” it said.

During H1 2016-17, power sales were higher compared to H1 2015-16 due to commissioning of additional units at the TSPL and BALCO power plants, Vedanta added.

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