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By Arathy S Nair
Diversified miner Vedanta Resources said it sees further upside for zinc prices as it announced a 37.4 percent rise in half-year profit on Friday.
A rebound in metals prices has prompted the miner to expand production of zinc and aluminium, enabling it to continue its recovery after being particularly hard hit by the commodities slump that ended early last year.
The company, which is searching for a new chief executive after the departure of Tom Albanese in August, benefited as zinc prices leapt by more than a third on average in the six months to Sept. 30.
Interim Chief Executive Kuldip Kaura said in a call with media that he sees further upward pressure on zinc prices as the gap between demand and supply is expected to continue for "some more".
The company, which mines zinc in India, South Africa and Namibia, said earnings before interest, tax, depreciation and amortization rose to $1.69 billion in the six months ended Sept. 30, marginally below analysts' estimate of $1.71 billion.
Operating profit from its zinc business surged nearly 80 percent, as zinc production mined in India jumped 42.1 percent, and the company said its mined production for the full year ending in March would be higher than the previous year.
The miner said any growth plans will be focused on India, but it would look at other opportunities as they arose. Kaura dismissed speculation Vedanta could be seeking a tie-up with Anglo American in which Vedanta Chairman Anil Agarwal has bought a nearly 20 percent stake. Kaura reiterated that was Agarwal's personal investment on behalf of his family trust.
As the mining sector seeks ways to gain exposure to expected demand from electric vehicles, Kaura also said Vedanta should complete research into producing battery-grade cobalt over the next 3-6 months. The car industry's push towards electric vehicles has been creating a burgeoning market for cobalt, which is mostly a byproduct of copper and nickel production.
The group, which acquired oil and gas assets in India and South Africa by taking over Cairn India earlier this year, said it was investing more to explore its oil and gas assets and has a near-term production target of 275,000-300,000 barrels of oil equivalent per day.
The company's total aluminium production also rose more than 39 percent in the six months through September, while average prices for aluminium jumped about 23 percent over that period.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)