India: Lloyds Metals raises iron ore production sharply in Oct-Dec’22

Lloyds Metals and Energy Limited (LMEL) produced 1.52 million tonnes (mnt) of iron ore in Q3FY23 (October-December, 2022), a sharp increase of 108% compared to 730,000 t in the previous quarter, the company announced in its quarterly results.

LMEL’s production increased sharply after the monsoon season, showing solid operational control supported by strong infrastructure. The company has requested several permits and is awaiting final EC for expanding its iron ore output to 10 mnt/year. In addition to increased capacity, the company is also re-estimating its resources.

Iron ore sales rise 31% q-o-q

LMEL’s iron ore sales stood at 1.73 mnt in the quarter under review. The company reported a sharp 31% q-o-q increase in iron ore sales compared to 1.32 mnt in the previous quarter. Lower iron ore prices as a result of the government’s export duty announcement had an impact on performance, resulting in more supplies in the local market, thereby putting pressure on domestic prices.

DRI production, sales rise q-o-q

In Q3FY23, the company’s direct reduced iron (DRI) production stood at 60,480 t, up 28% q-o-q as against 47,220 t in Q2. Higher raw material costs, such as that of coal, had an effect on DRI margins to an extent.

Sales, too, increased by 30% to 60,890 t compared to 46,850 t in Q2. The company intends to enhance its production capacity in the Konsari Plant by establishing DRI capacity of 72,000 t/year in the near future.

EBIDTA up q-o-q

The company’s EBIDTA was recorded at INR 2,567 million (up 51% q-o-q) in Q3 as against INR 1,696 million in the previous quarter.

Commenting on the performance of the company, Rajesh Gupta, Director, said: “The company has been performing well on all counts; our dispatches of iron ore in 9MFY23 are in line with our guidance of 5.5 mnt in FY23. We await the final EC for enhancing iron ore capacity to 10 mnt. Our upcoming 72,000 t sponge iron capacity is progressing well and is expected to add significantly to the company’s revenue in FY24. The company remains strongly poised as we scale up our mining output and sponge production.”