Severe winter weather hit first quarter production at FTSE 100-listed diversified natural resources group Eurasian Natural Resources' iron ore division while revenue decreased slightly when compared to the corresponding quarter as a result of weaker commodity prices.
In an interim management statement and production report for the first quarter ended March 31st, the global mining company reported that production had been at full capacity in all but two business divisions. In addition to the iron ore division, it said that the Shubarkol division experienced a decrease in line with seasonal demand.
Overall gross ferrochrome production decreased by 3.4% compared to the first quarter of 2012, with a 2.1% decrease in high-carbon ferrochrome. The decrease was mainly caused by planned maintenance at Aksu plant, the group said.
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Iron ore extraction and primary concentrate production decreased by 9.2% and 12.1% respectively, against the comparable period in 2012. Saleable concentrate production decreased 24.2% and saleable pellet production increased 0.7% against the first quarter of 2012, with total saleable product decreasing 12.2%.
Bauxite extraction and alumina production increased 1.0% and 24.8% respectively, against the first quarter of 2012 while aluminium production decreased 1.6% on the first quarter last year.
Production of saleable copper in the first quarter of 2013 was 14,536 tonnes, a 61.7% increase due to the inclusion of Frontier and a 7.0% increase on a like-for-like basis versus the same period in 2012.
Year-on-year, coal extraction by EEC decreased by 0.7% during the quarter. Electricity generation decreased 1.3% compared to the first quarter of 2012. Shubarkol coal extraction decreased 34.1% and special coke production by 7.5% against the fourth quarter of 2012 following the seasonal trend.
The group had gross available funds at March 31st of $0.8bn and net debt was $5.5bn. In February 2013, the group refinanced its existing revolving credit facility, increasing the facility from $467m to $500m and extending the maturity to 2015.
Felix Vulis, Chief Executive Officer of ENRC, said: "I am pleased with the group's recent operational performance, which is a reminder of the underlying strength of the business. The ferroalloys division produced at full available capacity, volumes were included for the full quarter from Shubarkol and alumina production has recovered well."
He added: "Our focused capital expenditure plan is starting to reap rewards, with concentrate having been produced from Frontier during the first quarter and the Frontier processing plant fully commissioned in April. Unfortunately Kazakhstan experienced severe winter weather conditions which impacted our ability to mine iron ore during January.
"However, by selling down inventories we managed on the whole to maintain sales to our customers over this period. As a management team our focus continues to be on the development of our key growth projects, management of cost inflation and maximising production volumes from our world class asset base."
MF
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