Mining firms cash in on metals boom

By @ibtimes on

LONDON (Commodity Online): This week the world got a taste of the things to come for base metal mining companies in the world.

Almost all companies involved in mining have posted lucrative gains in the financial year results. One major aluminium producing company, Vedanta, has posted 187 per cent surge in annual earnings per share on a rebound in metals prices and stronger output.

The recovery in demand and commodity prices appears well-founded and the medium and long-term outlook for the commodities are strong, so the mining companies are set to perform better this year alos.

The London-listed Vedanta group said basic EPS for the fiscal year to end-March rose to 219.6 cents compared to 76.4 cents in the previous year. This was higher than a consensus forecast of 186 cents, according to a poll of 14 analysts. The company proposed a final dividend of 27.5 cents, up 10 per cent.

Last month, Vedanta posted record production of iron ore and aluminium in its fourth quarter. Annual production of iron ore gained 34 per cent, aluminium climbed 15.4 per cent and refined zinc was up 4.7 per cent.

Profits have been boosted by a rebound in metals prices as demand returns after sharp falls during the downturn. The price of zinc, one of Vedanta's most profitable products, gained 80 per cent during Vedanta's fiscal year.

Vedanta, the largest copper producer in India, boosted output of copper, zinc, lead, iron ore and aluminum in Indian, Australian and Zambian operations. An index of six metals traded on the London Metal Exchange jumped 89 percent in the period, helping to lift Vedanta's sales 21 percent to $7.9 billion.

The company proposed a final dividend of 27.5 cents, an increase of 10 percent. Earnings per share jumped to 203.2 cents from 75.8 cents a year earlier, Vedanta said.

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