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Vedanta announced that mined metal production in Q3 was 240,000 tonnes, up 10% QoQ on account of higher ore treatment. The YoY decrease of 13% was primarily driven by decline in overall ore grades due to mine mix and lower production from Rampura Agucha open-cast mine.
Integrated zinc metal production was 200,000 tonnes, 4% higher QoQ and 3% lower YoY. Integrated lead metal production was 46,000 tonnes, 20% higher QoQ and 18% higher YoY. This was in line with the availability of mined metal and smelters. Integrated silver production was at 4.3 million ounces (132 tonnes), 6% lower QoQ on account of build up of work-in-progress inventories, and up 12% YoY in line with higher lead production.
Rampura Agucha underground mine achieved the highest quarterly mine development at 5,958 meters. The underground mine has crossed ore production run-rate of 2.0 million tonne per annum. Off shaft development is on track and production is expected to start from Q3 FY2019, which will take the total production capacity to 4.5 million tonne per annum.
Sindesar Khurd mine crossed the 4.5 million tonne per annum run-rate for ore production during the quarter. Main shaft equipping is progressing as per schedule and is on track for completion in Q4 FY2018. Production from the shaft is expected to start as per schedule in Q3 FY2019, to take total capacity to 6 million tonne per annum. Civil and structure erection for the new 1.5 million tonne per annum mill is ongoing and expected to be commissioned in Q2 FY 2019.
Post completion of the Zawar mill debottlenecking to 2.7 million tonne per annum, detailed engineering and site construction work for the new 2.0 million tonne per annum mill has commenced. The new mill is expected to be commissioned in Q3 FY2019.
The Expert Appraisal Committee of the Ministry of Environment, Forest and Climate Change has approved the expansion of ore production at Rajpura Dariba mine from 0.9 to 1.08 million tonne per annum and at Kayad mine from 1.0 to 1.2 million tonne per annum.
The fumer project is progressing as per schedule. Civil construction work is 70% complete and the project is on track for commissioning by mid-FY 2019.
Revenues during the quarter was USD 905 million, up 12% QoQ and 24% YoY. The YoY increase was due to higher lead & silver volume and strong zinc & lead LME prices, partly offset by lower zinc volume and rupee appreciation.
Zinc cost of production before royalties during the quarter was at USD 1,022 per tonne, 19% higher YoY primarily on account of increase in prices of metcoke, imported coal and other input commodities, rupee appreciation and lower overall grade. CoP was 4% higher QoQ due to increased input commodities prices.
EBITDA was USD 502 million for Q3 FY2018, up 24% YoY and 8% QoQ driven by higher realised LMEs, partially offset by higher CoP.
Nine months FY 2018 vs. nine months FY 2017
Mined metal production during the nine month period was at 693 kilo tonne, 16% higher YoY. This was driven by higher ore production from underground mines, partly offset by lower open cast mine production.
Integrated zinc, lead and silver production were higher by 28% YoY, 26% YoY and 24% YoY respectively, in line with higher availability of mined metal.
Revenue for the nine month period was USD 2,408 million, 50% higher YoY and EBITDA was USD 1,336 million, 55% higher YoY, primarily due to higher volumes and LME prices.
As previously guided, mined metal production in FY2018 is expected to be higher than FY2017. Refined zinc-lead metal production is expected to be around 950,000 tonnes. Silver production is expected to be over 15 million ounces (500 metric tonnes). Zinc CoP for FY 2018 is expected to be in the range of USD 950 to USD 975 per tonne as a result of higher input commodity prices. Q4 mine production to be higher than Q3 due to higher production from Rampura Agucha open cast mine and higher overall grades. Q4 CoP should be lower than Q3 due to higher production & cost efficiencies like increase in linkage coal consumption.
We are on track to achieve 1.2 million tonne per annum of mined metal production capacity by FY2020.