Q3 results show big leap for base metal miners

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Jan 2010

Even as the base metal companies came up with their Q3 results in the past 15 days, one thing has emerged very clear — from a global doom the base metal scenario has witnessed a boom now.
This is evident from the results of several mining companies. For example, take the case of Vedanta group, which mainly has mines in India and is one of the zinc majors, posted a huge rise in third-quarter core earnings.
The London-listed firm said earnings before interest, tax, depreciation and amortisation increased to $662.5 million in the three months to end-December from $10.1 million a year ago, when the sector was hit by sliding metals prices amid the economic downturn. Sales rose 64 per cent to $2.145 billion.
Third-quarter output of refined zinc, Vedanta’s most profitable product, fell 2.6 per cent to 148,000 tonnes and production of iron ore increased 35.7 per cent to 5.4 million tonnes.
“Operational excellence combined with higher LME (London Metal Exchange) prices and silver prices led to a strong net profit performance. With our expansion programme on track, we are on course to become the world’s largest integrated zinc and lead producer by mid-2010,” Hindustan Zinc CFO Akhilesh Joshi said.
Then came Australia’s giant Century zinc mine, which claimed that production will rebound in 2010 after technical problems cut output in 2009.
Zinc in concentrate production will rise to 500,000-510,000 tonnes in 2010 after a 79-day production halt cut output to 360,569 tonnes in 2009, MMG, the Australian unit of China’s Minmetals, Century’s owners said.
It added that despite the expected price drop, support for metals prices will be maintained in 2010 by rising real demand, particularly in China.
Production from Century, the world’s second largest zinc mine, had returned to full capacity with 30,500 tonnes of zinc concentrate shipped since its restart on Dec 23.
Sterlite Industries (India) Ltd, India’s largest zinc producer, had posted its first increase in quarterly profits in more than a year on higher zinc and aluminum prices. Consolidated net profits after exceptional items rose 42.35 per cent to Rs 731.3 crore on the back of a 49 per cent spike in gross sales for the quarter ended December 2009, the Mumbai-based company said in a statement.
Rising demand for steel used to make air conditioners and cars is boosting sales of zinc, used to rust-proof the alloy.
The average price of aluminum, which the company also produces, was higher in the December quarter, compared with a year ago, the statement said, without giving specifics.
Australia’s lead and zinc miner Perilya Ltd said it is cashed up and ready to pursue growth opportunities as it prepares to make development decisions on several projects in coming months.
The company had $116.7 million in cash at the end of December, up from $46.2 million at end September, after by a one-for-three share rights issue in November that raised about $55.2 million before transaction costs.

Source: Commodity Online