LOW copper output at its Zambian unit Konkola Copper Mines (KCM) in Chingola has cost Vedanta Resources an 8.5 per cent drop in annual copper earnings on the global market.
According to the global miner’s latest preliminary market report released this weekend, KCM recorded a slump of 19.2 per cent in copper production between March 31, 2013 and March 31, 2014.
Nevertheless, the preliminary market report contradicts recent assertions by KCM major shareholder Anil Agarwal, who maintained that the Zambian operation based on the Copperbelt was reaping not less than US$500 million in profits annually.
The report further states that Vedanta’s stocks also fell as much as 4.5 per cent on the Financial Times Stock Exchange (FTSE), making the company one of the biggest percentage losers on the marketing index.
Vedanta Resources executive vice president-group communications and corporate social responsibility, Roma Balwani said the year under review, saw copper production fall from 159,000 tonnes last year to 126,000 tonnes to in the previous year.
“This was mainly due to the suspension of mining operations in 2013 at the Chingola Open Pit Mine.
Konkola’s production was also affected by the temporary closure of shafts one and four due to safety,” Ms Balwani explained.
She, however, said KCM’s traditional markets in Asia and the Middle East experienced improved demand in the latter half of the year, leading to improvements in premium annual negotiations for 2014.
Ms Balwani said this is why Vedanta was working to improve the trackless equipment’s availability and utilisation rates, as well as recruiting key underground specialists and trainers.
“Several improvement initiatives and technical interventions have been planned to bring about a gradual improvement in production from current levels,” Ms Balwani said.
She said one of the interim plans was to secure custom concentrates which, when blended with integrated production, will enable KCM to run smelters at the minimum optimum level.
“Our strategic priorities includes ramping up the mine development at Konkola to realise its ore production potential, optimising the blend and feed to the Tailings Leach Plant for higher production,” Ms Balwani said.
Mr Agarwal last week disclosed that KCM was making annual profits of $500 million with additional profits amounting to US$1 billion