(Reuters) - Vedanta Resources Plc (VED.L) reported an 8.5 percent drop in full-year core earnings, hit by lower copper and zinc production, weak metal prices and a ban on mining iron ore in two Indian states.
The miner’s stock fell as much as 4.5 percent in early trading on Thursday, making it one of the biggest percentage losers on the FTSE-250 Midcap Index.
CEO Tom Albanese, the former Rio Tinto (RIO.AX) (RIO.L) boss appointed in April with a brief to get the best out of Vedanta’s underperforming mines, said the company would invest in Zambia and push for the restart of mining in Goa this year.
Vedanta, controlled by one-time scrap metal dealer Anil Agarwal, was one of three miners to drop out of the FTSE-100 index last year. Its shares have lost more than a fifth of their value in the last 12 months.
In India, Vedanta is hoping to unravel some of the red tape that has thwarted its production and investment. The company resumed iron ore mining in the state of Karnataka in December after a ban was lifted. Albanese expects Goa to be next.
“We hope to restart mining (in Goa) at the conclusion of the monsoon season in the latter part of this year,” he said.
India’s Supreme Court lifted a 19-month ban on mining iron ore in Goa last month, although it capped annual output in the state at 20 million tonnes.
In an interview with Reuters, Albanese cited energy policy and access to land and resources among the difficulties that have held back some of Vedanta’s operations in India.
“Some of the easiest wins are around energy policy, around power transmission, around getting the 25,000 megawatts of unutilized built generating capacity into the market,” he said.
Vedanta, which has a market capitalisation of $4.4 billion, also said improving the productivity of its copper mines in Zambia was a priority for the current year. In the last couple of months alone, Albanese has visited the country six times.
Vedanta bought a controlling stake in Konkola Copper Mines (KCM) a decade ago, but the business, intended to be part of the company’s push beyond India, has repeatedly disappointed.
In the financial year ended March 31, production of mined metal in Zambia fell 19 percent to 128,000 tonnes last year due to the temporary suspension of some mines.
“Over the next several months we’re not going to see much of a change in our overall production, but we will be beginning to see an upward trajectory in production over the course of the next year or two,” Albanese said.
Vedanta’s core earnings for the financial year fell to $4.49 billion. Revenue fell 11.6 percent to $12.95 billion.
The company’s shares were down 0.9 percent at 976 percent at 1038 GMT.
Editing by Robin Paxton