Copper was what drove the fortunes of Sesa Sterlite, a subsidiary of Vedanta Resources PLC in the second quarter of this year, according to the results declared recently by the company.
Sesa Sterlite posted a 32% year-on-year decline in its net profit during Q2. The net profit of approximately $269 million (Rs 1,658 crore) was slightly higher than market expectations. Revenue from its copper operations saw an increase because treatment and refining charges were up to $20.8 cents in September 2014 quarter as against $14.8 cents from the same quarter last year.
The company also said attributable profit after tax was up 15%, while there was an 8% growth in revenues.
Group CEO Tom Albanese was quoted as saying that besides copper, the performance drivers in Q2 were aluminum and zinc. According to this report in the Business Standard, the company continued to gain from improving base metal prices. While aluminum prices at $1995 a ton on the London Metal Exchange were up 12% over the September 2013 quarter. zinc prices, too, had improved 26 % year-on-year, and lead prices by 7%.
The company added a rider that due to the amalgamation scheme, the results were not comparable with that of the previous year. The scheme among Sterlite Energy, Sterlite Industries (India), Vedanta Aluminium, Ekaterina, Madras Aluminium Company and the main company had been sanctioned by the courts of India and had come into effect in the quarter ended September 2013. Sesa’s biggest problem, the loss of income from the stoppage of iron ore mining in Goa, may go away soon as the company seems positive of resuming operations in January-March of next year.
Mining in Goa was shut down for around 18 months, and one of the parties most affected was Sesa Sterlite. Before mining was halted, it had about 15 iron ore leases in Goa, and the mines produced around 14 million tons of the steelmaking raw material.
Now, Sesa is hopeful that once mining resumes, it will end up digging up about 8 million tons of ore initially.
Speaking to The Economic Times, the Sesa Sterlite CEO said, “we can resume capacity to about 50-55% of the rate we were producing before the closures two years ago.”
Last week, as reported by MetalMiner, the Goa Government’s mining department had moved a file clearing 10 mining leases, and it is hoped that most will come online soon. The state’s new mining policy, too, has been framed, paving the way for a renewal of mining leases, which may include at least 3 Sesa Sterlite’s leases.