Sesa Sterlite Limited Production Release for the Second Quarter and Half Year Ended 30 September 2013

Wed Oct 9, 2013 6:56am EDT

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Sesa Sterlite Limited Production Release for the Second Quarter and Half Year Ended 30 September 2013

Q2 Highlights

  • Record oil & gas production
  • Increased production of refined zinc, lead and silver at Zinc India
  • Merger of Sterlite Industries (India) Limited and Sesa Goa Limited, and Vedanta Group consolidation completed; merged company named “Sesa Sterlite Limited”

Sesa Sterlite Limited (NYSE: SSLT):

Zinc - India

     
  Q2 Q1 H1

Particulars (in ’000 tonnes, or as stated)

FY2014   FY2013  

% change
YoY

FY2014 FY2014   FY2013  

% change
YoY

ZINC INDIA
Mined metal content 222 190 16 % 238 459 377 22 %
Refined Zinc – Total 196 163 21 % 174 370 324 14 %
Refined Zinc – Integrated 195 153 28 % 173 368 310 19 %
Refined Zinc – Custom 1 10 (84 %) 1 2 14 (83 %)

Refined Lead - Total1

32 27 17 % 33 64 58 11 %
Refined Lead – Integrated 31 24 29 % 29 60 53 13 %
Refined Lead – Custom 1 3 (64 %) 3 4 5 (13 %)

Saleable Silver - Total
(in tonnes)2

90 84 7 % 96 186 157 18 %
Saleable Silver - Integrated
(in tonnes)
84 73 14 % 77 160 143 12 %
Saleable Silver – Custom
(in tonnes)
6 11 (44 %) 19 26 14 85 %
 

Mined metal production increased by 16% in Q2 and 22% in H1, as compared with the corresponding prior periods respectively, and we expect to deliver approximately 950 kt of mined metal production during the year.

Due to a significant improvement in the operational efficiency of smelters, integrated production of refined zinc, lead and saleable silver increased by 28%, 29% and 14%, respectively, in Q2, as compared with the corresponding prior quarter.

The Kayad and Rampura Agucha underground mine projects are progressing well to deliver commercial production in this fiscal year.

Zinc International

         
  Q2 Q1 H1

Particulars (in ’000 tonnes, or as stated)

FY2014   FY2013  

% change
YoY

FY2014 FY2014   FY2013  

% change
YoY

Zinc International 106 114 (6 %) 90 196 220 (11 %)

Zinc -refined

35 37 (5 %) 34 69 73 (5 %)
Mined metal content - BMM and Lisheen 71 77 (7 %) 56 127 147 (14 %)
 

Total production of refined zinc and mined zinc-lead metal in concentrate (MIC) increased to 106,000 tonnes in Q2 as compared with 90,000 tonnes in Q1, as the operations stabilised after the disruptions at Lisheen and BMM in Q1. In line with earlier guidance, we expect to produce around 390 kt of refined zinc and mined zinc-lead metal in concentrate in FY2014.

Oil and Gas

     
  Q2 Q1 H1
Particulars FY2014   FY2013  

% change
YoY

FY2014 FY2014   FY2013  

% change
YoY

OIL AND GAS (boepd)
Average Daily Gross Operated Production (boepd) 213,299 - - - 212,873 - -
Rajasthan 175,478 - - - 174,503 - -
Ravva 29,151 - - - 28,704 - -
Cambay 8,671 - - - 9,666 - -
Average Daily Working Interest Production (boepd) 132,862 - - - 132,477 - -
Rajasthan 122,835 - - - 122,152 - -
Ravva 6,559 - - - 6,458 - -
Cambay 3,468 - - - 3,866 - -
Total Oil and Gas (million boe)
Oil & Gas- Gross 7.60 - - - 7.60 - -
Oil & Gas-Working Interest 4.77 - - - 4.77 - -
 

Note: Sesa Sterlite acquired a 38.7% stake in Cairn India Limited, effective 26th August 2013. This has increased the company’s stake in Cairn India from 20.1% to 58.8%. The average daily gross operated and working interest production numbers in the table above are for the complete quarter and half year. The total oil and gas production (in million boe) in the table above are for the period from 26 August 2013.

In Q2, average gross operated production and working interest production were 213,299 barrels of oil equivalent per day (boepd) and 132,862 boepd respectively. The gross production at the Rajasthan block was 175,478 boepd.

Exploration drilling continues in the Rajasthan block with the current program targeting half of the 530 million barrels of gross recoverable risked prospective resource base, including considerable deep gas prospects in this fiscal year.

Iron Ore

     
  Q2 Q1 H1
Particulars (in million dry metric tonnes, or as stated) FY2014   FY2013  

% change
YoY

FY2014 FY2014   FY2013  

% change
YoY

IRON ORE3

Sales - 0.2 -   - - 3.1 -  
Goa - 0.2 -   - - 3.0 -  
Karnataka4 - 0.0 -   - - 0.1 -  
Production of Saleable Ore - 0.4 -   - - 3.7 -  
Goa - 0.4 -   - - 3.7 -  
Karnataka - 0.0 -   - - 0.0 -  
Production (‘000 tonnes)
Pig Iron 129 82 57 % 110 238 121 97 %
Met Coke 88 83 6 % 85 173 146 18 %
 

During H1, our iron ore operations in Goa and Karnataka continued to be suspended. Following the lifting of restriction on mining in Karnataka by the Supreme Court, we are now awaiting final statutory clearances to restart mining. We expect to resume mining in Karnataka shortly. Regarding the suspension of mining in Goa, the hearings have commenced at the Supreme Court.

Production of pig iron and metallurgical coke were 57% and 6% higher at 129,000 tonnes and 88,000 tonnes, respectively, as compared with the corresponding prior period due to the new capacities that were commissioned in Q2 FY2013.

Copper - India and Australia

     
  Q2 Q1 H1

Particulars (in ’000 tonnes, or as stated)

FY2014   FY2013  

% change
YoY

FY2014 FY2014   FY2013  

% change
YoY

COPPER- INDIA / AUSTRALIA
Copper - Mined metal content 6 6 (4 %) 6 12 13 (8 %)
Copper - Cathodes 82 87 (5 %) 16 98 175 (44 %)
Tuticorin power sales (million units) 158 - -   137 295 - -  
 

Following a temporary closure in Q1, the smelter had restarted in end June and is now operating at full capacity. Copper cathode production was 82,000 tonnes in Q2 and 98,000 tonnes in H1. However, the copper anode production in Q2 was 90,000 tonnes, in line with the rated capacity.

Mined metal production at our Australia mine was 6,000 tonnes in Q2.

Aluminium

     
  Q2 Q1 H1

Particulars(in ’000 tonnes, or as stated)

FY2014   FY2013  

% change
YoY

FY2014 FY2014   FY2013  

% change
YoY

ALUMINIUM
Alumina-Lanjigarh 116 205 (43 %) 0 116 423 (73 %)
Total Aluminum Production 200 197 2 % 195 395 382 3 %
Jharsuguda-I 137 134 2 % 134 271 259 5 %
Korba-II 63 63 1 % 61 124 123 1 %
 

The Lanjigarh alumina refinery recommenced operations in July and produced 116,000 tonnes in Q2. During Q2, the refinery supplied 17% of the alumina consumed by our smelters as compared with 100% import of alumina feed by the smelters in Q1. We expect the refinery to ramp-up to its rated capacity in Q3 FY2014.

In Q2, the Jharsuguda-I and Korba-II smelters continued to operate above their rated capacities. Around 60% of the total production was converted into value added products in Q2, in line with the corresponding prior period.

We expect to tap the first metal at 325 ktpa BALCO-III Aluminium smelter in Q3 FY2014. Having obtained the forest clearance for the BALCO coal block, we expect to commence mining in Q1 FY2015. We continue to evaluate the potential start-up date of the 1.25 mtpa Jharsuguda smelter.

Power

    Q2   Q1   H1
Particulars (in million units) FY2014   FY2013  

% change
YoY

FY2014 FY2014   FY2013  

% change

YoY

POWER
Total Power Sales 1,910 2,695 (29 %) 3,177 5,087 5,364 (5 %)

Jharsuguda 2,400 MW5

1,494 1,940 (23 %) 2,604 4,098 3879 6 %
BALCO 270 MW 44 346 (87 %) 187 231 684 (66 %)
MALCO 221 221 -   224 445 431 3 %
HZL Wind Power 151 188 (20 %) 162 313 370 (15 %)
 

Power sales were lower at 1,910 million units in Q2 and 5,087 million units in H1, primarily due to lower power sales from Jharsuguda 2,400MW power plant which operated in Q2 at a PLF of 31% for all four units as compared with 41% for three units during the corresponding prior period. The lower PLF at Jharsuguda and BALCO 270 MW was largely on account of lower demand.

Work at the Talwandi Sabo power project is progressing well and the first unit is expected to be synchronized in Q3 FY2014.

Production Summary (Unaudited)

(in ’000 tonnes, except as stated)

     
Particulars Q2 Q1 H1
FY 2014   FY 2013  

% change
YoY

FY 2014 FY 2014   FY 2013  

% change
YoY

Zinc India
Mined metal content 222 190 16 % 238 459 377 22 %
Refined Zinc – Total 196 163 21 % 174 370 324 14 %
Refined Zinc - Integrated 195 153 28 % 173 368 310 19 %
Refined Zinc – Custom 1 10 (84 %) 1 2 14 (83 %)

Refined Lead - Total1

32 27 17 % 33 64 58 11 %
Refined Lead - Integrated 31 24 29 % 29 60 53 13 %
Refined Lead – Custom 1 3 (64 %) 3 4 5 (13 %)

Saleable Silver - Total
(in tonnes)2

90 84 7 % 96 186 157 18 %
Saleable Silver - Integrated
(in tonnes)
84 73 14 % 77 160 143 12 %
Saleable Silver – Custom
(in tonnes)
6 11 (44 %) 19 26 14 85 %
Zinc International 106 114 (6 %) 90 196 220 (11 %)
Zinc –refined Skorpion 35 37 (5 %) 34 69 73 (5 %)
Mined metal content- BMM and Lisheen 71 77 (7 %) 56 127 147 (14 %)
Oil and Gas
Average Daily Gross Operated Production (boepd) 213,299 - -   - 212,873 - -  
Rajasthan 175,478 - -   - 174,503 - -  
Ravva 29,151 - -   - 28,704 - -  
Cambay 8,671 - -   - 9,666 - -  
Average Daily Gross Operated Production (boepd) 132,862 - -   - 132,477 - -  
Rajasthan 122,835 - -   - 122,152 - -  
Ravva 6,559 - -   - 6,458 - -  
Cambay 3,468 - -   - 3,866 - -  
Total Oil and Gas (million boe)
Oil & Gas – Gross 7.60 - -   - 7.60 - -  
Oil & Gas - Working Interest 4.77 - -   - 4.77 - -  

Iron Ore3 (in million dry metric tonnes, or as stated)

Sales - 0.2 -   - - 3.1 -  
Goa - 0.2 -   - - 3.0 -  

Karnataka4

- 0.0 -   - - 0.1 -  
Production of Saleable Ore - 0.4 -   - - 3.7 -  
Goa - 0.4 -   - - 3.7 -  
Karnataka - 0.0 -   - - 0.0 -  
Production (‘000 tonnes)
Pig Iron 129 82 57 % 110 238 121 97 %
Met Coke 88 83 6 % 85 173 146 18 %
 
Particulars   Q2   Q1   H1
FY 2014   FY 2013  

% change
YoY

FY 2014 FY 2014   FY 2013  

% change
YoY

Copper - India / Australia

Copper - Mined metal content 6 6 (4 %) 6 12 13 (8 %)
Copper - Cathodes 82 87 (5 %) 16 98 175 (44 %)
Tuticorin power sales
(million units)
158 0   137 295 0  
Alumina
Lanjigarh 116 205 (43 %) 0 116 423 (73 %)
Aluminium
Total Aluminum Production 200 197 2 % 195 395 382 3 %
Jharsuguda 137 134 2 % 134 271 259 5 %
Korba II 63 63 1 % 61 124 123 1 %
Power (in million units)
Total Power Sales 1,910 2,695 (29 %) 3,177 5,087 5,364 (5 %)
Jharsuguda 2,400 MW 5 1,494 1,940 (23 %) 2,604 4,098 3,879 6 %
Balco 270 MW 44 346 (87 %) 187 231 684 (66 %)
MALCO 221 221 -   224 445 431 3 %
HZL Wind Power 151 188 (20 %) 162 313 370 (15 %)
 
  1. Includes captive consumption of 3,344 tonnes in H1 FY 2014 vs 3,076 tonnes in H1 FY 2013, and 1,700 tonnes in Q2 FY 2014 vs 1,435 tonnes in Q2 FY 2013.
  2. Excludes captive consumption of 18 tonnes in H1 FY 2014 vs 16 tonnes in H1 FY 2013, and 9 tonnes in Q2 FY 2014 vs 8 tonnes in Q2 FY 2013.
  3. Iron Ore sales include internal consumption of nil tonnes in H1 FY2014 vs 0.18 million tonnes in H1 FY2013 and nil tonnes in Q2 FY2014 vs 0.12 million tonnes in Q2 FY2013.
  4. Sales of iron ore from Karnataka were 0.02 million tonnes in H1 FY2014 vs 0.06 million tonnes in H1 FY2013 and nil tonnes in Q2 FY2014 vs 0.01 million tonnes in Q2 FY2013.
  5. Includes production under trial run of Nil units in H1 FY2014 vs. 339 million units in H1 FY2013 and Nil units in Q2 FY2014 vs 138 million units in Q2 FY2013.

Note: Sesa Sterlite acquired a 38.7% stake in Cairn India Limited, effective 26th August 2013. This has increased the company’s stake in Cairn India from 20.1% to 58.8%. The average daily gross operated and working interest production numbers in the table above are for the complete quarter and half year. The total oil and gas production (in million boe) in the table above are for the period from 26 August 2013.

About Sesa Sterlite Limited

Sesa Sterlite Limited (“Sesa Sterlite”) is one of the world’s largest diversified natural resource companies. Our business primarily involves exploring, extracting and processing minerals and oil & gas. We produce oil & gas, zinc, lead, silver, copper, iron ore, aluminium and commercial power and have a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and Sri Lanka. Sesa Sterlite has a strong position in emerging markets with over 80% of its revenues from India, China, East Asia, Africa and the Middle East.

Sustainability is at the core of Sesa Sterlite’s strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities.

Sesa Sterlite is a subsidiary of Vedanta Resources Plc, a FTSE 100 company. Sesa Sterlite is listed on the Bombay Stock Exchange and the National Stock Exchange in India and has ADRs listed on the New York Stock Exchange.

Disclaimer

This press release contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should” or “will.” Forward–looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

Investors
Sesa Sterlite Limited
Ashwin Bajaj
Senior Vice President – Investor Relations
+91 22 6646 1531
sesasterlite.ir@vedanta.co.in

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