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Vedanta core profit rises as aluminium offsets copper weakness

(Reuters) - Miner Vedanta Resources Plc, set to be taken private by Chairman Anil Agarwal, reported on Monday a 26.3 percent rise in quarterly core earnings on higher aluminium production and commodity prices, and said it was hopeful of restarting its copper smelter in India.

FILE PHOTO: A bird flies past the logo of Vedanta installed on the facade of its headquarters in Mumbai, January 31, 2018. REUTERS/Danish Siddiqui/File Photo

The London-listed company, which operates primarily in India and Africa, has been benefiting from a strong recovery in the prices of metals and oil and gas, and had posted a double-digit percentage growth in core earnings last year. The price rebound had also prompted the miner to expand the production of zinc and aluminium.

However, Vedanta reported a core loss of $15 million from copper production, for the three months ended June 30, as output from India fell 73.3 percent to 24,000 tonnes of copper cathodes. The company had a core profit of $32 million from copper in the year-earlier quarter.

Copper production plunged as the company was forced to temporarily shut down its Tuticorin copper smelter in southern India amid protests by local residents over alleged environmental violations. The protests turned violent in May, resulting in the police opening fire and killing 13.

“We are hopeful about the restart of the copper plant and would expect it to produce 100 kt of copper cathodes per quarter in line with its capacity on restart,” the company said in a statement on Monday.

The fall in copper output was offset by a 37 percent rise in aluminium production, which contributed nearly a third of Vedanta’s total revenue in the quarter.

The company’s quarterly zinc output also fell, by 20 percent, hurt by lower grades.

Vedanta’s earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $983 million, for the three months ended June 30, from $778 million a year earlier. Revenue rose 15 percent to $3.55 billion.

Chairman Agarwal’s family trust last week offered about $1 billion in cash to take the miner private.

Shares of Vedanta Resources were little changed on the London Stock Exchange in early trade.

Reporting by Muvija M in Bengaluru; Editing by Amrutha Gayathri