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Kazakhmys PLC (KAZ)

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Wednesday 03 May, 2006

Kazakhmys PLC

Q1 Production Report

Kazakhmys PLC
03 May 2006


                                                                      3 May 2006

                        Kazakhmys PLC Production Summary
                   for the first quarter ended 31 March 2006


• Copper cathode production stood at 89.1 thousand tonnes with 405
  thousand tonnes of total copper concentrate produced.

• Copper cathode production was 6.6% lower than the same period in 2005
  mainly due to some operational interruptions and adverse weather conditions
  experienced at the beginning of 2006. Ore extraction improved from March 2006
  and this performance is expected to be reflected in improved copper cathode
  production in the second quarter of 2006.

• Zinc metal production was up 6.4% at 18.2 thousand tonnes with 86.9
  thousand tonnes of zinc concentrate produced.

• Gold and silver production grew by 74.6% and 5.0% respectively year
  on year due to the silver and gold-rich ores from the Abyz mine.

• The newly completed Artemyevskoe, Stepnoy and Abyz mines are
  performing well.

Kazakhmys Group Copper Production
---------------------------------
                                                      Q1 2006      Q1 2005
                                                      --------------------

Ore extraction          '000 t                          9,839        9,592
  Average copper grade   %                               1.07         1.00
  Average zinc grade     %                               3.98         3.28

Copper Concentrate      '000 t                            405          385
  own concentrate       '000 t                            356          330
  purchased concentrate '000 t                             49           55

Copper in Concentrate   '000 t                           95.0         96.8
  own concentrate       '000 t                           84.7         84.0
  purchased concentrate '000 t                           10.3         12.8

Copper Cathodes*        '000 t                           89.1         95.4
  own concentrate       '000 t                           76.8         81.0
  purchased concentrate '000 t                           11.6         10.0
  tolling concentrate   '000 t                            0.7          4.4
Copper Rod              '000 t                            5.3          1.3
--------------------------------------------------------------------------

*Includes copper used to produce copper rod


In the first quarter of 2006, Kazakhmys PLC produced 89.1 thousand tonnes of
copper cathode (of which 5.3 thousand tonnes were used to produce copper rods),
a 7% decrease compared to the same period of 2005. This was primarily due to
operational interruptions at mines caused by adverse weather conditions at the
beginning of 2006 when the temperatures at certain locations in Kazakhstan
remained below 400C for nearly two weeks. Copper cathode production volumes
improved significantly in March 2006 resulting in a 13.8% increase compared to
March 2005 and 31% increase compared to February 2006. Overall in the first
quarter of 2006, 76.7 thousand tonnes of copper cathode were produced from the
Group's own concentrate, with 11.6 thousand tonnes from purchased concentrate
and the remaining 0.7 thousand tonnes through tolling arrangements.


Copper concentrate production in the first quarter of 2006 was 5.2% higher than
in the first quarter of 2005 due to the increasing contribution from the higher
grade Stepnoy, Artemyevskoe and Abyz mines, commissioned in 2005. In the first
quarter of 2006 the Group produced 356 thousand tonnes of copper concentrate and
a further 49 thousand tonnes of copper concentrate were purchased from third
parties.


The production volume expansion program at the Nurkazgan mine (Karaganda
complex) and the stripping works at the Zhaman-Aybat mine (Zhezkazgan complex)
were successfully completed well ahead of schedule with the increasing
contribution from both mines expected in the second quarter of 2006.

Kazakhmys Group by-products Production
--------------------------------------
                                                     Q1 2006      Q1 2005
                                                     --------------------

Zinc Concentrate       '000 t                           86.9         58.8
Zinc in Concentrate    %                               45.12        38.36
Zinc in Concentrate    '000 t                           39.2         22.6
Zinc metal             '000 t                           18.2         17.1

Silver                 '000 oz                         5,249        4,997
  own concentrate      '000 oz                         5,226        4,961
  Tolling              '000 oz                            23           36

Gold                   '000 oz                          35.1         20.1
  own concentrate      '000 oz                          23.2         13.1
  Tolling              '000 oz                          11.9          7.0
-------------------------------------------------------------------------


Zinc metal production in the first quarter of 2006 stood at 18.2 thousand
tonnes, slightly higher than in the first quarter of 2005. Optimization of the 
smelter process and concentrate feed grade is expected to improve smelter 
productivity in the course of the year.


Zinc concentrate production in the first quarter of 2006 was significantly
higher year on year and increased 47.8% compared to the first quarter of 2005.
This rise was due to the larger contribution from the zinc-rich ores of
Artemyevskoe mine that commenced operations in 2005.


In the first quarter of 2006, the Group also produced 5.2 million ounces of
silver and 35.1 thousand ounces of gold, which were 5% and 75% higher
respectively compared to the same period in 2005. Of the 35.1 thousand ounces of
gold produced in the period, 11.9 thousand ounces were produced under tolling
arrangements. This increased gold production was the result of a larger ore
contribution from the Abyz and Artemyevskoe mines that produce ores with higher
gold content.

Zhezkazgan
----------
                                   Q1 2006      Q1 2005
                                   --------------------

Ore extraction      '000 t           6,824        6,759
Average copper grade %                0.82         0.87

Copper Concentrate  '000 t           139.5        145.4
Copper Cathodes     '000 t            51.7         57.9
  of which tolling  '000 t             0.3           --
Copper Rod          '000 t             5.3          1.3
-------------------------------------------------------
*Includes copper used to produce copper rod


At the Zhezkazgan complex, copper cathode production was lower in the first
quarter of 2006, due to adverse weather conditions in the first two months of
2006. Temperatures of below 400C lasting nearly two weeks caused some
operational interruptions at several mines, all of which have now been resolved.


Copper rod production significantly increased from 1.3 thousand tonnes in the
first quarter of 2005 to 5.3 thousand in the first quarter of 2006 due to higher
market demand.

Balkhash
--------
                                    Q1 2006      Q1 2005
                                    --------------------
Ore extraction       '000 t           1,021        1,391
Average copper grade %                 0.82         0.65
Copper Concentrate   '000 t            48.9         41.6
Copper Cathodes      '000 t            37.4         37.5
of which tolling     '000 t             0.4          4.3
Copper Rod           '000 t              --           --
--------------------------------------------------------


Copper concentrate and copper cathode production at the Balkhash complex in the
first quarter of 2006 was higher than in the first quarter of 2005 primarily due
to higher copper grades, which overcompensated for lower ore extraction volumes
caused by decreasing production at the Kounrad mine.




East Region
-----------
                                   Q1 2006      Q1 2005
                                   --------------------

Ore extraction      '000 t           1,361        1,152
Average copper grade %                2.42         2.39
Copper Concentrate* '000 t           132.1        134.5
Copper Cathodes     '000 t              --           --
Copper Rod          '000 t              --           --
-------------------------------------------------------
*Excludes concentrate processed by third parties


In the first quarter of 2006, ore extraction at the East Region complex
increased by 18.1% compared to that of the first quarter of 2005, due to a
ramp-up of production at the Artemyevskoe mine. Despite the higher quantity of
mined ores and higher copper grades, copper concentrate production in the first
quarter of 2006 was slightly lower compared to the first quarter of 2005. This
was primarily due to minor transportation problems, which have now been
rectified.

Karaganda
                                     Q1 2006      Q1 2005
                                     --------------------

Ore extraction         '000 t            633          290
Average copper grade    %                1.2          0.4
Copper Concentrate     '000 t           28.1          8.9
Copper Cathodes        '000 t             --           --
Copper Rod             '000 t             --           --
---------------------------------------------------------
                   

Ore extraction and copper concentrate production at the Karaganda complex mines
in the first quarter of 2006 increased by 118% and 216% respectively year on
year. The ramp-up of production at the Abyz and Nurkazgan mines continues to
perform in line with management expectations. The stripping works at the
Kosmurun mine were completed ahead of schedule and the mine is expected to
commence test production earlier than anticipated.


Appendix 1


As announced on April 27, 2006, from now on the Group will report its production
results on a four complex basis, in order to be aligned with the management
structure of the business. This reporting change will introduce an additional
complex, at Karaganda, to the three complexes breakdown reported previously. The
Karaganda complex comprises the Abyz, Kosmurun and Nurkazgan mines and the
Karagaily concentrator. All these operations are located in the vicinity of
Karaganda and therefore management is of the view that it is more appropriate to
account for these operations as a separate complex.


For the ease of comparison the first quarter 2006 production results in the old
reporting format are set out below:

Zhezkazgan
----------
                                   Q1 2006      Q1 2005
                                   --------------------

Ore extraction      '000 t           6,824        6,759
Average copper grade %                0.82         0.87

Copper Concentrate  '000 t            139.5        145.4
Copper Cathodes     '000 t             51.7         57.9
  Of which tolling  '000 t              0.3           --
Copper Rod          '000 t              5.3          1.3
--------------------------------------------------------
                    

Balkhash
--------
                                    Q1 2006      Q1 2005
                                   ---------------------

Ore extraction       '000 t           1,544        1,602
Average copper grade %                 0.95         0.61

Copper Concentrate   '000 t            48.9         41.6
Copper Cathodes      '000 t            37.4         37.5
  Of which tolling   '000 t             0.4          4.4
Copper Rod           '000 t              --           --
--------------------------------------------------------


East Region
-----------
                                   Q1 2006      Q1 2005
                                   --------------------

Ore extraction      '000 t           1,471        1,231
Average copper grade %                2.34          2.3

Copper Concentrate* '000 t           160.2        143.3
Copper Cathodes     '000 t              --           --
Copper Rod          '000 t              --           --
-------------------------------------------------------

*Excludes concentrate processed by third parties


For further information please contact:

Jinsoo Yang, Head of IR                          Tel: +44 20 8636 7900
Sergei Stephantsov, Deputy Head of IR                 +44 20 8636 7900
Kazakhmys PLC

Morgan Bone                                      Tel: +44 20 7251 3801
Robin Walker
Finsbury


- ends -


Notes to Editors

The Group's principal business is the mining, processing, smelting, refining and
sale of copper and copper products, including copper cathode and copper rod, and
is carried on by the Company's main subsidiary LLC Kazakhmys Corporation
("Kazakhmys"). Based on 2004 production, the Group is the 10th largest producer
of copper cathode and mined copper in the world. The Group's operations are
vertically integrated. Kazakhmys operates 16 open pit and underground mines and
two smelting and refining complexes in the Republic of Kazakhstan. Kazakhmys
also owns significant rail infrastructure in Kazakhstan and MKM, a copper
products fabrication company in Germany.





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