Vedanta posts a rise in zinc and oil production

OIL AND mining conglomerate Vedanta Resources yesterday reported a rise in oil, gas and zinc production in the second quarter and said it expected to resume mining iron ore in the southern Indian state of Karnataka shortly.

But shares in the FTSE 100 group tumbled 4.67 per cent after Morgan Stanley downgraded its rating on the stock to “underweight”.

Controlled by Indian scrap dealer-turned-billionaire Anil Agarwal, Vedanta has been hurt by the ban on iron ore mining in Karnataka and the western Indian state of Goa over the last few quarters.

The company received clearance from India’s top court in September to resume mining in Karnataka, but is still awaiting a decision to permit mining of the steel-making commodity in Goa.

Vedanta said average daily gross operated production of oil and gas at unit Cairn India, which it acquired in an ambitious $9bn (£5.6bn) deal with Cairn in 2011, rose to 213.3m barrels of oil equivalent in the quarter ended 30 September.

Gross production at the Rajasthan block rose two per cent to 175,478 barrels of oil equivalent per day.

Mined metal production at Zinc India increased 16 per cent to 222,000 tonnes in the second quarter.

The conglomerate, which recently got legal and regulatory approval to consolidate its web of subsidiaries and simplify its structure, said copper cathode production at its India unit fell about six per cent to 82,000 tonnes in the second quarter.