Vedanta sees signs of global recovery

Mining giant Vedanta Resources (VED) was today forecasting better times ahead after efforts to ramp up production failed to offset the effect of weak metal prices earlier in the year.
 
The India focused miner saw earnings before interest, tax, depreciation and amortisation for the six months to 30 September tumble 41% to $746 million as revenue slipped 25% to $2.98 billion.
 
Analysts at Nomura said the figures were slightly below their expectations although Cazenove described them as "solid".
 
However, chairman Anil Agarwal said that signs of the global recovery are starting to filter through.
 
"We have seen some recovery in metals prices and the fundamentals remain highly attractive. We expect that the economic and industrial growth in India will help underpin the demand for our products."
 
Vedanta, which has operations in India, Australia and Zambia, said it upped its production levels across all its metal groups during the period with silver reaching a record high of 2.63 million ounces in the first half of the year.
 
In October, it reported that iron ore production hit record highs of 3.3 million tonnes in the second quarter.
 
The 27% production increase was attributed to improved efficiencies in mining operations.
 
It also posted a 15.6% rise in refined zinc production as a result in improved performance at mining operations and a 13% growth in aluminium output.
 
However, the company faltered slightly on copper production, with the amount of mined copper production in India and Australia remaining on par with the corresponding prior period at 12,000 tonnes.
 
Vedanta forecast that production levels would rise further in the second half of the year.
 
In today's statement, it maintained that it continues to be well funded with net debt of $969 million and liquid investments of $6 billion.
 
Vedanta added that its strong balance sheet allows it to developing new mines and pushing forward with its operations in areas where its rivals are cutting back.
 
The group proposed an interim dividend of 17.5 cents, up from 16.5 cents last year, and said it remained committed to its progressive dividend policy.
 
Its shares were down more than 3% to 2213p.