Vedanta Resources plc Annual Report & Accounts 2013

Operational Review:

Zinc - International

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Load-haul-dump unit loading truck underground, Lisheen.
Production performance

(In US$ millions, except as stated)
FY
2012–13
FY
2011–12

% change
Production (kt)      
  Mined metal content BMM and Lisheen 208 215 (3.2)%
Refined metal Skorpion 145 145 -
Production– Lead (kt)      
   Mined metal content 72 84 (13.7)%
Operations

Total production of zinc and lead MIC and zinc refined metal was 426,000 tonnes, which comprised 280,000 tonnes of zinc and lead MIC at the Lisheen and Black Mountain Mine (‘BMM’), and 145,000 tonnes of refined zinc at the Skorpion mine. This compared with production of 444,000 tonnes in the previous financial year.

Unit costs

(In US$ millions, except as stated)
FY
2012–13
FY
2011–12

% change
Zinc (US$ per tonne) CoP 1,092 1,146 4.7

The unit cost of production reduced  in FY2012–13 to US$ 1,092 per tonne from US$1,146 per tonne in FY2011–12, primarily due to operational efficiencies and favourable currency movements.

Financial performance

(In US$ millions, except as stated)
FY
2012–13
FY
2011–12

% change
Revenue 797.2 890.7 (10.5)%
EBITDA 797.2 366.0 (19.5)%
EBITDA margin (%) 36.9% 41.1% -
Depreciation 122.5 119.0 2.9%
Acquisition related amortisation 61.4 117.8 (47.9)%
Operating profit 110.6 129.2 (14.4)%
Share in group operating profit (%) 4.4% 5.4% -
Capital expenditure 35.5 41.7 (14.9)%
   Sustaining 27.4 41.7 (34.3)%
   Growth 8.1 - -
EBITDA

EBITDA for the FY 2012–13 was US$294.5 million and operating profit was US$110.6 million. Operating profit fell due to lower zinc and lead prices, and lower volume, mainly from the Lisheen mine partially offset by lower cost of production (‘CoP’).

Outlook

In FY 2013–14, production at Zinc International is expected to be impacted by a fall in grade and progressive reduction in production at the Lisheen mine, which will lead to lower production volumes at around 390–400kt for FY 2013–14. During the current year we plan to complete the feasibility study for the Gamsberg/Swartberg and Refinery Co-treatment projects.

map
Key achievements
  • Stable operating and improved cost performance despite fall in grades and volume
  • Production volumes in line with mine plan
Strategic priorities
  • Feasibility study of Gamsberg & Swartberg projects underway
  • Feasibility study for Refinery Conversion Project being investigated to co-treat sulphide opportunity in Namibia
  • Focus on increasing the mine life of all assets though in pit and near pit drilling and exploration continues
Production-Refined Zinc and
Mined Zinc-Lead (kt)
Graph
EBITDA (US$m)
Graph

1 For the period post acquisition.

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