Message Jeu 14 Mai 2015 08:32

Preliminary Results for the Year Ended 31 March 2015

http://www.vedantaresources.com/media/1 ... elease.pdf

the turnaround at Konkola Copper Mines (KCM) in
Zambia continues to present challenges. Volumes and ore grade were lower at the Nchanga mine
complex and the rehabilitation programme of shafts have affected production in Konkola Deeps.
However, with the new management team and operating strategy in place, we have already
started seeing positive momentum in the last quarter.

COPPER – ZAMBIA
Production Performance
FY2015 FY2014 % Change
Production (kt)
Mined Metal 116 128 (9.5)%
Finished Copper 169 177 (4.6)%
Integrated 117 124 (5.9)%
Custom 52 53 (1.3)%
Operations
FY2015 mined metal production was 10% lower at 116kt. Production at the Konkola underground
mine was negatively affected as remediation and critical maintenance was being carried out at
the shafts. Shaft #1 resumed partial hoisting in March 2015 and work at Shaft #4 is expected to
be completed by Q3 FY2016. At Nchanga, FY2015 mined production was affected by lower grades
and a transformer failure at the Tailings Leach Plant (TLP). During the year, TLP primary copper
production was at 52,000 tonnes (56,000 tonnes in FY2014).
Production from the Upper Ore Body at the Nchanga underground was suspended in November
2014 pending a review of an appropriate mining method to exploit this ore body.
Copper custom production was marginally lower by 1%, constrained by blending challenges
from concentrates available in the market.
On 23 February 2015, the Government amended the documentation requirements to reclaim VAT
on future exports. This will enable us to resume purchase and treatment of third-party
concentrate and thereby increase the smelter utilization.
Vedanta Resources plc Page 33 of 80
Preliminary Results For The Year Ended 31 March 2015
Unit Costs (Integrated Production)
FY2015 FY2014 % Change
C1 cash costs (US cents per lb)(1) 257.7 238.4 8.1%
Total cash costs (US cents per lb)(2) 329.1 334.0 (1.5)%
(1) C1 cash cost, excludes royalty, logistics, depreciation, interest, sustaining capex
(2) Total Cash Cost includes sustaining capex
The unit cost of production without royalty, logistics, depreciation, interest and sustaining capex
increased to 257.7 US cents per lb in FY2015, 8.1% higher than the previous year. This was mainly
due to the lower volumes and higher maintenance costs.
Financial Performance
(in US$ million, except as stated)
FY2015 FY2014 % Change
Revenue 1,077.1 1,271.4 (15.3)%
EBITDA (3.8) 156.3 (102.4)%
EBITDA Margin (0.4)% 12.3% -
Depreciation and amortisation 187.2 171.5 9.2%
Operating (Loss)/Profit before special items (191.0) (15.3)
Share in group operating profit (%) (11.0)% (0.7) -
Capital Expenditure 57.9 150.9 (61.6)%
ustaining 57.9 114.2 (49.3)%
Growth - 36.7 (100.0)%
EBITDA in FY2015 was US$(4) million compared with US$156 million in the previous year,
impacted by the lower volumes explained above, higher unit costs and lower metal prices. These
factors also contributed to an operating loss before special items of US$191 million for FY2015.
Outlook
Konkola Mine
KCM is focussing on running the Konkola mining operations efficiently through its Pivot
strategy, which focuses on three key production areas, thereby resulting in improved equipment
availability and productivity. There is also a programme underway to increase the number of
underground workshops and the training of frontline employees.
Smelter and Refinery
While the Konkola mine ramps up production levels, we have the opportunity to increase the
utilisation rate of the smelter by treating third party concentrates, from both within Zambia and
from other countries. This has been positively assisted by the decision of the Government of
Zambia to amend Rule 18, which has eased the documentation requirements for VAT refunds.
Nchanga Operations
At Nchanga, we are focussed on sustaining and improving the operations at the Tailings Leach
Plant by treating CRO stockpiles and old tailings. Open pit and underground operations at
Nchanga are approaching the end of their economic life, and therefore experiencing low grades
and high unit costs.
Production is expected to ramp up after first quarter. FY2016 total production is expected to be
190-210kt with integrated production of 120-130kt at c1 cost of 225 cents/lb.
Our Strategic Priorities
 Focus on profitable production at Konkola, with the ‘pivot’ and project maintenance work
around the shaft infrastructure and mobile fleet to up availabilities
 Ensure that Tailings Leach Plant operations continue reliably, and roll out an effective
preventative maintenance programme
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Preliminary Results For The Year Ended 31 March 2015
 Increase smelter utilization by filling spare capacity with purchased concentrates available
locally in Zambia, DRC and Chile
 Realise cost efficiency, driven by volume growth and other measures
 Improve productivity