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Kazakhmys PLC (KAZ)

  Print      Mail a friend       Annual reports

Tuesday 04 September, 2007

Kazakhmys PLC

Interim Results

Kazakhmys PLC
04 September 2007


                                 KAZAKHMYS PLC

               INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2007

FINANCIAL HIGHLIGHTS
   • Financial results driven by steady copper cathode production and buoyant
     commodity prices
   • Revenues increased by 22% to $2.8 billion
   • EBITDA excluding special items up 22% to $1,323.7 million
   • EPS based on Underlying Profit up 29% to $1.71 per share

CASH RETURN TO SHAREHOLDERS
   • Strong Free Cash Flow of $614.4 million for the period
   • Cashflow and strength of balance sheet allows cash return to
     shareholders of $700 million
     - Interim dividend of $64 million, an increase of 7% (13.6 US cents per share)
     - Special dividend of $235 million, or 50.0 US cents per share
     - Share buy-back programme of up to $400 million announced

KEY BUSINESS DEVELOPMENTS
   • Delivery on diversification strategy with estimated investment of $1.6 billion
     - Acquisition of Eastern Akzhar petroleum block in March
     - Acquisition of Eurasia Gold Inc in July
     - Planned exercise of ENRC option*
   • Launch of Boschekul pre-feasibility study

* A separate statement has been released today

Vladimir Kim, Executive Chairman of Kazakhmys plc commented:

"These are positive results, supported by sound operational performance across
the Group and delivery of our key strategic objectives. I am pleased that the financial
strength of our Group is supporting both diversification and increased returns
to shareholders whilst leaving us well positioned to invest in further growth."



FINANCIAL OVERVIEW
----------------------------------------------------------------------------------------
                                                       Six months   Six months    Change
                                                            ended        ended         %
$million (unless otherwise stated)                   30 June 2007 30 June 2006
----------------------------------------------------------------------------------------
Revenues                                                  2,789.3      2,279.8        22
Earnings:
    Profit before taxation, finance items and             1,203.3        984.5        22
    negative goodwill
    EBITDA excluding special items(1)                     1,323.7      1,081.3        22
    Underlying Profit(2)                                    799.6        619.3        29
EPS:
    Basic and diluted ($)                                    1.70         1.35        26
    Based on Underlying Profit(3) ($)                        1.71         1.32        29
Free Cash Flow                                              614.4        622.3        (1)
ROCE (%)                                                     24.4         27.7
Cash cost of copper after by-product                         44.5         25.5        75
credits (USc/lb)
----------------------------------------------------------------------------------------

(1) Reconciliation of EBITDA excluding special items to profit before taxation,
finance items and negative goodwill is found in note 4(a)

(2) Reconciliation of net profit attributable to equity shareholders of the
Company to Underlying Profit is found in note 8(b)

(3) Reconciliation of EPS based on Underlying Profit is found in note 8(b)


CHAIRMAN'S STATEMENT

In the first six months of 2007 we have again enjoyed a strong increase in
revenue and profits, benefiting from continued buoyant commodity prices and
demand for all of our metals. Over the first six months of 2007 turnover rose to
$2,789.3 million, a 22% increase on the same period last year. This increase was
reflected in pre-tax profits rising by 24% to $1,185.8 million and a 29%
increase in earnings per share, based on Underlying Profit, from $1.32 in the
first six months of 2006 to $1.71.

Production increased modestly over the past six months, with output of finished
copper rising by 2%. The Group continues to invest in existing operations and in
the development of new copper deposits in order to maintain and extend our
existing production. Today we are announcing the launch of a comprehensive
pre-feasibility study on the Boschekul project and we are making good progress
on a detailed study of the oxide deposits at Aktogay.

In 2007 we have started to deliver on some key areas of our strategy. This can
be seen in the acquisitions of the Eastern Akzhar petroleum block in March,
followed just after the period end by our acquisition of Eurasia Gold in July.
In addition, the independent Directors of the Board have approved the exercise
of the ENRC option, subject to the approvals of the Government of Kazakhstan and 
the independent shareholders of the Company. In total this represents estimated 
investment of $1.6 billion and has brought us exposure to some important new 
commodities. Kazakhstan and the region continue to offer numerous exceptional 
opportunities for diversification and development, through new projects and 
existing assets. Pursuing these opportunities remains a key part of our strategy.

We will increase the amount of Kazakhmys PLC shares held through the Kazakhstan
Stock Exchange to over 2.5% of our total issued share capital, following a share
exchange offer to existing holders of our operating subsidiary Kazakhmys LLC in
which we will now hold 99.73%. This consolidation moves the Group towards a more
simplified corporate structure and supports the development of the Kazakh
capital markets.

With commodity prices remaining high, the Group continues to generate
substantial levels of Free Cash Flow, with net liquid funds of $1.7 billion at
30 June 2007. We are intending to carry out a share buy-back of up to $400
million and the Board is declaring a special dividend of $235 million, 50.0 US
cents per share, in addition to the interim dividend of $64 million, 13.6 US
cents per share, a 7% increase on the interim dividend last year. This brings a
total return to shareholders of up to $700 million. We believe that subsequent
to this return, we retain sufficient balance sheet strength to implement our
strategy and to take up other opportunities as they arise.

I should like to thank all our employees for their continued hard work and
support throughout the period. I should also like to thank the Directors, who
have played a key role in assisting on strategy over the past six months.

Looking ahead, we anticipate total copper production finishing 2007 at a
slightly higher level than 2006 and production from own material in line with
last year. The outlook for pricing and demand remains firm. Costs continue to
create pressure and several initiatives are underway to mitigate this. Our
commitment to our strategy of development and diversification remains strong and
I look forward to reporting further progress in our 2007 annual results.


CHIEF EXECUTIVE'S REVIEW

It has been a positive six months' performance, with a combination of stable
production and firm commodity prices producing a strong increase in financial
returns. This has been combined with good progress on our strategy to expand and
diversify.

Lower ore output was largely offset by higher ore grades from several new mines,
leading to steady production of copper in concentrate compared to the same
period in 2006. Total copper cathode output for the first half of 2007 reached
190.4kt, excluding tolled material, compared to 186.5kt produced in the first
six months of 2006. This included production of 26.9kt of cathodes from
purchased concentrate, an increase from 17.5kt for the first six months of last
year. Production from purchased concentrate is undertaken when opportunities
arise to purchase concentrate locally and capacity is available.

Zinc metal in concentrate production was in line with the interim period last
year, at 71.2kt in the first six months of 2007. On the same comparison,
production of gold and silver from our own material reduced by 4% and 5%
respectively, to 51.4koz and 10,104koz. The level of silver production was
directly linked to lower output from mines with silver content. Gold in ore
production actually increased compared to the first half of 2006 and material
was stockpiled, which has been processed in the second half of the current year.

The average realised price on copper sales over the six month period was $6,930
per tonne, an increase of 6.5% on the same period last year. There was a rise in
realised zinc prices of 29% to $3,572 per tonne. The increase in metals prices,
accompanied by steady output, led to a rise in revenue of 22% to $2.8 billion.
Revenues also benefited from the recognition of sales of 49kt of copper cathode,
which were held as goods in transit at the year end. Revenue has been held back,
however, by high inventories of silver which have been sold down since the
period end. In addition, ore containing gold, as mentioned above, was stockpiled
and has been processed in the second half.

Cost pressures have been seen throughout the mining industry globally for some
time and this has had an impact in Kazakhstan. Inflation in Kazakhstan is
currently about 8%, but fuel costs have risen by 31% in the first half of 2007,
compared to the same period last year. Salaries have risen in excess of 20%,
affected by a combination of the strong economy and the buoyant mining sector,
with demand for skilled workers leading to a tight labour market. Fuel and
labour represent around 30% of our cash cost of sales. These pressures are
likely to continue and action is being taken, as described below, to mitigate
the impact.

Cash cost of copper, including the cost of purchased concentrate and net of
revenues arising from by-products for the first six months of 2007 was 44.5 US
cents per pound.  Excluding the costs of purchased concentrate and corresponding
copper cathode production, our cash cost for the period was estimated to be 27
US cents per pound, which continues to place us amongst the lower cost copper
producers in the world due to the valuable contribution we receive from
by-product revenues.  In common with other mining companies around the world, we
have faced cost pressures principally arising from labour, fuel and
transportation costs, but we continue to maximise by-product revenues with a
view to mitigating these cost pressures.  Our cash costs figure is also highly
sensitive to the timing of by-product revenues; if the silver inventories had
remained constant during the period, then our cash costs would have reduced by
approximately 6 US cents per pound.

EBITDA, excluding special items, rose by 22% to $1.3 billion, reflecting the
improvement in commodity prices. The EBITDA margin was unchanged from the first
half of last year, at 48%, as higher commodity prices offset the cost pressures
noted above. The rise in the price of copper subdues the margins of MKM, our
German copper product division, as they purchase copper for fabrication. The
EBITDA margin of our core copper division, excluding MKM and purchased
concentrate, has remained steady from the first half of last year, at 82%.

We are undertaking a comprehensive cost management programme, in order to offset
the cost pressures mentioned above and to embed a culture of cost efficiency
across the organisation. This is divided into three key areas: transportation,
concentrators and labour. The review of our transportation costs covers a wide
range of activities. In road transportation we believe there are opportunities
to reduce maintenance costs, outsource some maintenance activities and to make
the handling of material more efficient. We are considering ways of improving
our rail transportation system to improve delivery times and reduce losses in
transit. The new Nurkazagan concentrator will start production in the second
half of this year and will save in transportation and other costs, principally
by removing the need to transport ore. We believe there are opportunities to
build a further two concentrators and these projects are about to enter
pre-feasibility stage. At the same time we are upgrading two of our eight
existing concentrators, Karagaily and Nikolaevskoe, which will improve their
recovery rates and capacity. This refurbishment programme will then be extended
to other concentrators. We believe that there is potential to reduce our labour
numbers in some areas, such as the outsourcing of transportation, but this has
to take into account our social responsibility towards our employees and the
wider community.

There has been continued focus on health and safety over the past six months. To
30 June there were 17 fatalities, the same as in the first six months of last
year. In the first half of last year there were nine fatalities related to falls
of ground and our programme to address this issue was covered in our 2006 Annual
Report. The number of fatalities as a result of falls of ground has reduced to
two in the current period, which is an encouraging start to this initiative.
There has, however, been an increase in incidents related to underground mobile
mining equipment and we will now be reviewing some specific initiatives to
address this trend. There is a major new training facility for health and safety
being developed at Zhezkazgan, due for completion this year, underlining our
commitment in this area.

The total spend on capital expenditure over the period was $650.2 million, of
which $83.8 million was sustaining capital expenditure and the balance
representing spend on new projects. 80% of the new project capital expenditure
was for the acquisition of the Eastern Akzhar petroleum business and related
licenses.

In our 2006 Annual Report we stated that at this time we would report on the
potential fast tracking of our two growth projects, at Aktogay and Boschekul. I
can now announce that we are fast tracking the pre-feasibility stage of
Boschekul, which should see the project ready for approval into the feasibility
stage by December 2008. Early indications suggest a resource of 400 million
tonnes containing 2.2 million tonnes of copper, but we believe the size of the
resource will increase. We have engaged the international engineering and
construction group, Fluor, to assist on this project. Studies are being carried
out to optimise the development of Aktogay, specifically on the oxide deposits,
which although relatively small, at 107 million tonnes, should be a
straightforward and low cost project. This should move into pre-feasibility
study by the end of 2007.

We continue to generate significant levels of cash, with Free Cash Flow over the
period of $614 million and net liquid funds of $1,740 million at the period end.
As mentioned in the Chairman's Statement, we have decided to return some cash to
shareholders through a combination of a share buy-back of up to $400 million and
a special dividend of $235 million, 50.0 US cents per share. The strength of our
balance sheet still leaves the Group with the flexibility to meet our
requirements for expenditure and to fulfil our diversification strategy.

We have begun delivering on some important areas of our diversification strategy
since the start of the year. In March 2007 we completed the acquisition of the
Eastern Akzhar petroleum block. We are currently carrying out studies to review
previous exploration work. For the second half of 2007 and early 2008 we are
working in the deeper southern part of the block and we are also looking at
exploration in the shallow northern part of the block.

Since the period end we have completed the acquisition of Eurasia Gold, in July.
Eurasia Gold currently has around 1.9 million ounces of gold resource (on a JORC
and C1 Kazakhstan Standard basis), though we anticipate that this number will
increase substantially following the survey work currently taking place, which
we will report on at our 2007 Annual Results. These assets, such as the
Bozymchuk and Mizek Sulphide projects, are planned to move into production in
2009 and, combined with our existing gold resources and output, provide the core
of an exciting gold division.

Today we announced that the independent Directors of the Board have approved the
exercise of the option to acquire an 18.8% holding in ENRC, subject to the
approvals of the Government of Kazakhstan and the independent shareholders of
the Company. The estimated cost will be $810 million. The holding will provide entry
to a range of new resources, including ferroalloys, iron ore and alumina. Given
the strength of our balance sheet, we believe that there are many opportunities
that can be considered with ENRC to our mutual benefit.

I should like to thank all my colleagues for their efforts in achieving these
results. These are exciting times for all of us at Kazakhmys as we continue to
develop and improve our existing operations and start to deliver and take
advantage of the many strategic opportunities available to us. I look forward to
reporting on this further at the final results next year.



REVIEW OF OPERATIONS


OVERALL COPPER PRODUCTION


Kazakh Mining Copper Production
                                    Six months      Six months
                                         ended           ended
kt (unless otherwise stated)      30 June 2007    30 June 2006
--------------------------------------------------------------
Ore extraction                          17,994          20,127
Average copper grade (%)                  1.21            1.10

Copper in concentrate                    201.5           202.6
  own concentrate                        182.8           183.4
  purchased concentrate                   18.7            19.2

Copper cathodes(1)                       191.2           187.9
  own concentrate                        163.5           169.0
  purchased concentrate                   26.9            17.5
  tolling concentrate                      0.8             1.4
Copper rod                                18.0            14.3
--------------------------------------------------------------
(1)Includes copper used to produce copper rod


Total copper cathode output for the first half of 2007 reached 190kt, excluding
tolled material, 2% higher than the 187kt produced in the first six months of
2006. Lower ore output was largely offset by higher ore grades, resulting in
copper in concentrate production in line with that of the same period in 2006.

Lower ore output in the first half of 2007 was primarily due to the suspension
of production for stripping works at the Kounrad mine in the Balkhash Complex
and lower output from the Zhezkazgan Complex. There was increased ore output in
the Karaganda Region as the Kosmurun mine produced over the full six month
period when it was only operational for part of the first half of 2006.

The impact on copper in concentrate production of the lower ore output was
almost offset by a higher average copper grade of 1.21%, considerably above the
1.10% recorded for the first half of 2006. This was achieved by additional
output from the newer, relatively high grade mines such as Zhomart in the
Zhezkazgan Complex, Artemyevskoe in the East Region and Kosmurun in the
Karaganda Region, coupled with the impact of the suspension of output at Kounrad
for stripping works, a mine with a below average ore grade. As the newer mines
produced at a ramped up capacity throughout the first half of 2007, their
upwards pressure on the average copper grade is unlikely to continue.

Cathode output in the first half of 2007 was adversely impacted by maintenance
shutdowns at both the Zhezkazgan and Balkhash smelters. The smelters are now
fully operational, although there may be a further 10 day maintenance shutdown
during the second half of the year.

The Group has continued to opportunistically produce cathodes from purchased
concentrate when there is concentrate available locally and there is spare
capacity at the smelters. In the first half of 2007 the Group produced 26.9kt of
copper cathodes from purchased concentrate, up from 17.5kt in the first half of
2006.

The volume of cathodes allocated for further processing into copper rod is
determined by contracted demand, normally from the Chinese market. In the first
half of 2007, 3.7kt more copper rod was processed than in the comparative period
of the prior year.




COPPER REVIEW BY REGION

Zhezkazgan Complex
                                    Six months      Six months
                                         ended           ended
kt (unless otherwise stated)      30 June 2007    30 June 2006
--------------------------------------------------------------
Ore extraction                          12,816          14,050
Average copper grade (%)                  0.81            0.82

Copper concentrate                       247.2           280.1
Copper in concentrate                     93.1           100.9

Copper cathodes(1)                        93.7           105.8
  of which tolling                           -             0.5
Copper rod                                18.0            14.3
--------------------------------------------------------------
(1)Includes copper used to produce copper rod


The Zhezkazgan Complex's ore output in the first half of 2007 was lower than in
the corresponding period of 2006 as a result of a collapse impacting the
Annensky and East mines in the second half of 2006 and the majority of
Zhezkazgan Complex mines being at or nearing a mature stage. The increase in
output, half year on half year, from the Zhomart mine commissioned in April
2006, was not sufficient to offset the fall in output from the other Zhezkazgan
Complex mines. Considerable work is required, in efficiencies and expansions, to
maintain the current copper output levels.

The lower ore output, at a similar ore grade as in the prior year, resulted in
production of copper in concentrate being reduced from 100.9kt to 93.1kt.

At the end of May 2007, the Zhezkazgan smelter closed for 14 days for
maintenance, contributing to a decline in copper cathode production in the first
half of 2007 to 93.7kt, compared to the level achieved in the first half of
2006.


Balkhash Complex

                                    Six months      Six months
                                         ended           ended
kt (unless otherwise stated)      30 June 2007    30 June 2006
--------------------------------------------------------------
Ore extraction                           1,093           2,286
Average copper grade (%)                  1.15            0.82

Copper concentrate(1)                     92.5           133.0
Copper in concentrate                     15.9            24.3

Copper cathodes                           97.5            82.1
  of which tolling                         0.8             0.9
Copper rod                                   -               -
--------------------------------------------------------------
(1)Excludes concentrate processed by third parties

In the first six months of 2007 there was limited ore output of 178kt (30 June
2006: 1,175kt) from the Kounrad mine as it undergoes major stripping works. The
stripping works are scheduled to continue throughout 2007, though in June there
was some limited output and further production, albeit intermittent, is expected
over the second half of the year. The Sayak mine experienced technical issues
with drilling and ore transportation equipment reducing its output to 702kt (30
June 2006: 867kt).

Kounrad mine had a copper grade of only 0.34% in the first half of 2006, below
the Complex's average, so its reduction in output has resulted in the Complex's
average grade rising from 0.82% to 1.15%.

The stripping works at Kounrad and technical issues at Sayak led to the
Complex's copper in concentrate output falling from 24.3kt to 15.9kt.

The Balkhash smelter, where the vast majority of purchased concentrate is
processed, together with own concentrate from the Karaganda and East regions,
produced 97.5kt of cathodes, up from 82.1kt in the first half of 2006. Although
one of the smelter furnaces at Balkhash was shutdown for maintenance for 14 days
in June, the lost production is expected to be made up in the second half of the
year.


East Region
                                    Six months      Six months
                                         ended           ended
kt (unless otherwise stated)      30 June 2007    30 June 2006
--------------------------------------------------------------
Ore extraction                           2,173           2,318
Average copper grade (%)                  2.60            2.63

Copper concentrate(1)                    231.4           259.5
Copper in concentrate                     43.7            47.6

Copper cathodes                              -               -
Copper rod                                   -               -
--------------------------------------------------------------
(1)Excludes concentrate processed by third parties


The ore volumes produced in the East Region were slightly below the levels
achieved over the same period in 2006 as an increase in ore output of 271kt from
one of the newer mines, Artemyevskoe, was offset by delays in obtaining mining
and transportation equipment at the Orlovskoe and Yubileyno-Snegirikhinskoe
mines. New equipment is expected to be delivered in the third quarter of 2007. 
There was also reduced production at the Nikolaevskoe mine which had been 
transferred from an open pit to an underground mine in 2006 and a temporary 
stoppage of ore extraction at Belousovskoe mine in April 2007 as stripping and 
ore preparation works were undertaken.

In addition to the figures shown above, 5.4kt of copper in concentrate was
produced by a third party on a tolled basis for the Group (30 June 2006: 4.1kt).

In the first half of 2007, the region's average ore grade was almost the same as
the grade achieved in the comparative period in 2006.



Karaganda Region

                                    Six months      Six months
                                         ended           ended
kt (unless otherwise stated)      30 June 2007    30 June 2006
--------------------------------------------------------------
Ore extraction                           1,912           1,473
Average copper grade (%)                  2.36            1.83

Copper concentrate                       158.7            71.2
Copper in concentrate                     24.6             6.4

Copper cathodes                              -               -
Copper rod                                   -               -
--------------------------------------------------------------


Ore output in the Karaganda Region grew by 439kt from 1,473kt to 1,912kt and the
ore grade increased from 1.83% to 2.36% resulting in copper in concentrate
production of 24.6kt, 284% higher than the first half of 2006.

Kosmurun mine output rose by 540kt at an average grade of 4.00%, more than
compensating for the closure of the Abyz mine for planned stripping works
throughout the period.

During the first six months of 2007, 950kt of ore from the Nurkazgan mine was
stockpiled at the new Nurkazgan concentrator awaiting the completion of the
testing and commissioning works. This concentrator is expected to become
operational in the second half of 2007.


REVIEW OF ZINC PRODUCTION


Kazakh Mining Zinc Production
                                    Six months      Six months
                                         ended           ended
kt (unless otherwise stated)      30 June 2007    30 June 2006
--------------------------------------------------------------
Average zinc grade (%)                    3.69            4.00
Zinc in concentrate                       71.2            70.6
Zinc metal                                27.4            33.8
--------------------------------------------------------------


Zinc in concentrate production in the first six months of 2007 was in line with
the same period in 2006. The increased ore output in 2007 from the Artemyevskoe
mine offset the impact of the second quarter equipment shortages at the
Orlovskoe mine.

Some ore from the Kosmurun mine, which had been found to contain zinc for the
first time, has been stockpiled as the Karagaily concentrator is upgraded. The
stockpiled ore is expected to be processed in the second half of 2007.

The zinc grade fell slightly to 3.69% from the 4.00% recorded in 2006. This was
partly due to the Kosmurun mine producing ore containing zinc in 2007, at a
below average grade of 2.10%. Other factors were lower grades being extracted at
the Artemyevskoe mine and the ceasing of production for stripping works at the
Abyz mine.

Zinc metal output is slightly below the current annualised capacity of 60kt,
though with the relative attractiveness of concentrate prices, material is being
sold as concentrate and not stockpiled.


REVIEW OF PRECIOUS METALS PRODUCTION

Kazakh Mining Precious Metals Production

                                    Six months      Six months
                                         ended           ended
koz (unless otherwise stated)     30 June 2007    30 June 2006
--------------------------------------------------------------
Silver grade (g/t)                       21.09           20.34
Silver                                  10,111          10,692
   own production                       10,104          10,660
   tolling                                   7              32

Gold grade (g/t)                          0.77            0.70
Gold                                      70.6            77.7
   own production                         51.4            53.6
   tolling                                19.2            24.2
--------------------------------------------------------------

Silver own production in the first half of 2007 was 5% below that for the first
six months of 2006 as the decrease in ore output in the Zhezkazgan Complex,
particularly from the Annensky and East mines impacted by the 2006 collapse, was
partially offset by production from the South mine and the recently commissioned
Zhomart mine. The other main silver producing region, East, also experienced
lower silver output due to the slightly lower ore production at the Orlovskoe
mine.

Gold in ore output was higher than that in the first half of 2006, as the
Artemyevskoe and Nikolaevskoe mines in the East Region reported greater gold
outputs. Karaganda's gold output was also higher than that achieved in the first
half of 2006 due to the above average gold content of the Kosmurun mine whose
ore extraction was significantly higher than in the prior period.

However, own gold production from the Group's precious metals refinery in
Balkhash was 4% lower than the first half of 2006, mainly due to the build-up of
work in progress and the stockpiling of Nurkazgan ore, all of which is expected
to be processed later in the year.


MKM PRODUCTION

The Group's German downstream manufacturing subsidiary, MKM, sold 136kt, up from
134kt in the first half of 2006. Within this, the volumes of wire rod, a low
margin product, fell slightly from 62kt to 59kt as the business focused more on
higher margin products, taking advantage of improved market conditions.
Production of strips rose from 23kt to 25kt, an increase of 9%, and bars from
11kt to 13kt, an increase of 15%.


KAZAKHMYS PETROLEUM

Following the acquisition of the Eastern Akzhar petroleum block in Western
Kazakhstan, Kazakhmys has recruited a specialist team to carry out prospecting
work to establish the reserves in place. In the second half of the year,
prospecting will be undertaken including exploratory drilling on the suprasalt
structures, performing seismic 3D work on the subsalt structures, re-entering
existing wells to confirm previous exploration results and establishing the
initial on-site infrastructure to support activities on the block.


FINANCIAL REVIEW

BASIS OF PREPARATION

The financial information set out on pages 20 to 39 has been prepared using
consistent accounting policies with those adopted in the financial statements
for the year ended 31 December 2006.

SUMMARY OF RESULTS

Revenues for the six month period to 30 June 2007 amounted to $2,789.3 million,
a 22.3% increase over the prior period in 2006. Profit before taxation, finance
items and negative goodwill rose by 22.2% to $1,203.3 million and our key
performance measure for earnings, EBITDA excluding special items, was $1,323.7
million, a 22.4% increase compared to 2006. The improved earnings were
attributable to the continued strength in commodity prices shown across all of
the Group's main products during the period.


These results translated to an increased profit attributable to equity
shareholders of $794.2 million, compared to $632.7 million in the prior year, an
increase of 25.5%. Underlying Profit, a more informed measure of the Group's
financial performance, increased by 29.1% from $619.3 million to $799.6 million.


A summary of the consolidated income statement is set out below:

                                                              Six months   Six months    Change
                                                                   ended        ended         %
$million (unless otherwise stated)                        30 June 2007   30 June 2006
-----------------------------------------------------------------------------------------------
Revenues                                                       2,789.3      2,279.8        22.3
Operating costs excluding                                     (1,465.6)    (1,198.5)       22.3
depreciation, depletion,
amortisation and special items
-----------------------------------------------------------------------------------------------
EBITDA excluding special items                                 1,323.7      1,081.3        22.4
Special items:
  Less: write (off)/back of property, plant and                   (3.8)        10.2
  equipment
  Less: loss on disposal of property, plant and                   (1.8)        (4.0)
  equipment
Less: depreciation, depletion and amortisation                  (114.8)      (103.0)
-----------------------------------------------------------------------------------------------
Profit before taxation, finance items and                      1,203.3        984.5        22.2
negative goodwill
Net finance expenses                                             (17.5)       (35.1)
Recognition of negative goodwill                                     -          6.5
-----------------------------------------------------------------------------------------------
Profit before taxation                                          1,185.8       955.9        24.1
Income tax                                                       (384.3)     (317.0)
-----------------------------------------------------------------------------------------------
Profit for the period                                             801.5       638.9        25.4
Minority interests                                                 (7.3)       (6.2)
-----------------------------------------------------------------------------------------------
Profit attributable to equity shareholders of                     794.2       632.7        25.5
the parent
------------------------------------------------------------------------------------------------
EPS - basic and diluted                                           $1.70       $1.35        25.9
EPS based on Underlying Profit                                    $1.71       $1.32        29.5
------------------------------------------------------------------------------------------------


Basic and diluted EPS increased by 25.9% to $1.70 per share. EPS based on
Underlying Profit was $1.71 per share compared to $1.32 per share reported in
2006, an improvement of 29.5%.

Following these results and reflecting the strength of the balance sheet, the
Directors have declared an interim dividend of 13.6 US cents per share together
with a special dividend of 50.0 US cents per share. The Directors have also
announced a share buy-back programme of up to $400 million that will commence in
October 2007.

The improved earnings have benefited the Group's cash flows and net liquid funds
position, with the latter standing at $1,740.4 million at 30 June 2007 even
after the acquisition of Dostan-Temir LLP (renamed as Kazakhmys Petroleum LLP)
and the related oil and gas exploration and development licence within
Kazakhstan.

The continued high commodity prices and healthy funding position leaves the
Group well placed to pursue future organic growth and opportunistic
acquisitions. On 5 July 2007 the Group acquired 96.34% of Eurasia Gold Inc, a
Central Asian gold mining company for $260.1 million, and on 3 September 2007
the independent Directors of the Board approved an announcement setting out
their decision to exercise the call option over Vladimir Kim's 18.8% interest in
ENRC PLC for an estimated cost of $810 million, subject to the approvals of the
Government of Kazakhstan and the independent shareholders of the Company.

The definitions of our key financial indicators are shown in the Glossary and
these measures are set out below:

                                                         Six months    Six months
                                                              ended         ended
$million (unless otherwise stated)                     30 June 2007  30 June 2006
---------------------------------------------------------------------------------
EBITDA excluding special items                              1,323.7       1,081.3
EPS based on Underlying Profit ($)                             1.71          1.32
Free Cash Flow                                                614.4         622.3
Return on Capital Employed (%)                                 24.4          27.7
Cash cost of copper after by-product credits                   44.5          25.5
(USc/lb)(1)
---------------------------------------------------------------------------------

(1) In line with management and external reporting, the Group has changed the unit
of measurement of the cash cost of copper after by-product credits from $/tonne
to USc/lb.


REVENUES

As the Kazakh Mining and MKM business are different in nature, the two segments
have been analysed separately.

Kazakh Mining

Revenues of the Kazakh Mining business increased from $1,520.9 million to
$1,978.0 million, a 30.0% increase against the prior period. With commodity
prices remaining strong, revenues from our copper and zinc based products showed
significant increases.

The average market and realised prices for our main products during the period,
all of which increased significantly over the prior period, are set out below:

                                     Six months ended           Six months ended
                                       30 June 2007               30 June 2006
                                  --------------------------------------------------
                                  Average       Average        Average       Average
                                   market      realised         market      realised
                                    price         price          price         price
------------------------------------------------------------------------------------
Copper ($/tonne)                    6,769         6,930          6,070         6,510
Zinc metal ($/tonne)                3,561         3,572          2,762         2,768
Silver ($/oz)                       13.31         13.32          10.95         10.87
Gold ($/oz)                           659           649            590           600
------------------------------------------------------------------------------------


The average realised prices for our main products do not differ significantly
from market prices with the exception of copper. In line with industry practice,
our sales agreements for copper cathodes provide for provisional pricing at the
time of delivery with the final price based on the market price for future
periods. With an average market copper price in the second quarter of 2007 of
$7,597 per tonne compared to an average copper price of $5,941 per tonne in the
first quarter of the year, the rising trend in copper prices has resulted in
positive pricing adjustments during the period. Additionally, a premium over LME
prices is incorporated into our sales agreements, consistent with market
practice.

Revenues from the sale of copper cathodes were $1,406.9 million, or 71.1% of the
total revenues of the Kazakh Mining business, with the average realised price of
copper increasing 6.5% compared to the prior period. Although production volumes
of copper cathodes, excluding tolling, increased by 2.1% compared to the
previous period, sales volumes of copper cathodes were 40kt, or 24.5% higher.
This is primarily due to some shipments to Europe that were scheduled to be
delivered in December 2006 being delivered in January 2007 as the shipments took
longer than anticipated over the New Year period.

Zinc metal sales volumes decreased by 32.4% compared to the prior period but
this was partially offset by higher realised prices which were 29.0% higher
resulting in a fall in revenue of only 12.8%. Zinc metal output during the
period was slightly below the annualised capacity of the Balkhash zinc smelter
of 60kt, which may be balanced by greater output in the second half of the year.
However, with the relative attractiveness of zinc concentrate prices in the CIS,
zinc is being sold as concentrate instead of being stockpiled at the zinc
smelter without a material impact on profitability.

Zinc in concentrate sales volumes increased by 85.0% compared to the prior
period largely due to increased production at the Artemyevskoe mine and the
reduction in zinc concentrate inventory levels. Capacity constraints at the zinc
smelter in the production of zinc metal, as mentioned above, increased the
volumes of zinc concentrate sold which, when coupled with higher realised prices
for zinc concentrate, pushed up revenues by 160.7% to $154.1 million,
contributing 7.8% of Kazakh Mining's revenues during the period compared with
3.9% in the prior period.

Sales volumes of silver were down 31.7% but were offset by strong prices
resulting in revenues only decreasing by 16.4%. The decrease in sales volumes of
silver was largely attributable to the delay in finalising the 2007 sales
contracts in order to obtain improved pricing in our contracts. Since the period
end, additional sales agreements for 2007 have been agreed and surplus stocks
have subsequently been sold at attractive prices. Gold sales volumes were
slightly down on the prior period, with revenues broadly flat due to the timing
of shipments around the period end.

MKM

MKM reported revenues of $811.3 million for the period, an increase of 6.9% from
the prior period's revenue figure of $758.9 million. Although sales volumes were
only up by 1.6% compared to the prior period, this was part of a strategic
decision to reduce working capital levels and the associated financing costs.
MKM's sales activity was focused towards higher margin products as well as
increasing volumes within the tolling business which rose by 46.1% compared to
the same period in 2006. Whilst these moves curtailed revenue growth,
particularly in the lower margin wire rod business, increased volumes of higher
margin products and higher levels of tolling had a positive impact on relative
profitability.

Following this change in focus of MKM's sales activities, there were strong
performances in the sales of the higher margin products with revenues for bars
up 43.2%, tubes up by 34.0% and strips up by 32.1% compared to the prior period
due to good market conditions and increased customer demand for these products.
Revenues from the lower margin wire rods were down 7.1% over the prior period.
The improved underlying performance at MKM seen in the second half of 2006 has
therefore continued into the first half of 2007.

EARNINGS

Profit before taxation, finance items and negative goodwill increased from
$984.5 million to $1,203.3 million, an increase of 22.2%, split between $1,193.4
million for the Kazakh Mining business, $25.8 million for MKM and a loss of
$15.9 million for unallocated costs. A reconciliation of profit before taxation,
finance items and negative goodwill to EBITDA excluding special items by
business segment is set out below:

                                                                Six months     Six months
                                                                     ended          ended
$million (unless otherwise stated)                            30 June 2007   30 June 2006
-----------------------------------------------------------------------------------------
Kazakh Mining
   Profit before taxation, finance items and negative              1,193.4          973.1
   goodwill
   Add/(loss): loss/(gain) from special items                          5.5           (6.6)
   Add: depreciation, depletion and amortisation                     103.1           92.3
-----------------------------------------------------------------------------------------
   EBITDA excluding special items                                  1,302.0        1,058.8
-----------------------------------------------------------------------------------------
   Revenues                                                        1,978.0        1,520.9
-----------------------------------------------------------------------------------------
   EBITDA excluding special items margin (%)                          65.8           69.6
-----------------------------------------------------------------------------------------
MKM
   Profit before taxation, finance items and negative                 25.8           30.0
   goodwill
   Add/(loss): loss/(gain) from special items                          0.1           (0.1)
   Add: depreciation and amortisation                                 11.2           10.6
-----------------------------------------------------------------------------------------
   EBITDA excluding special items                                     37.1           40.5
-----------------------------------------------------------------------------------------
   Revenues                                                          811.3          758.9
-----------------------------------------------------------------------------------------
   EBITDA excluding special items margins (%)                          4.6            5.3
-----------------------------------------------------------------------------------------
Unallocated costs excluding special items                            (15.4)         (18.0)
-----------------------------------------------------------------------------------------
Total EBITDA excluding special items                               1,323.7        1,081.3
-----------------------------------------------------------------------------------------
Total EBITDA excluding special items margin (%)                       47.5           47.4
-----------------------------------------------------------------------------------------

Kazakh Mining


The EBITDA excluding special items margin fell to 65.8% from 69.6% in the prior
period. Despite commodity prices being higher in 2007 compared to the prior
period, the main reason behind the lower margin was the significantly higher
cost of purchased concentrate. With an increase in the volume of copper cathodes
produced from purchased concentrate from 18kt to 27kt, there was a $64.9 million
increase (67% increase) in the cost of purchased concentrate. Excluding the
effects of purchased concentrate on costs and revenue from cathodes produced
from purchased concentrate, the EBITDA excluding special items margin would have
remained level at approximately 82%, despite the cost pressures faced by the
business.

Significant cost pressures were faced within Kazakhstan due to its buoyant
economy and, in common with other companies in the mining industry, there was
more widespread pressure on input costs. General cost inflation within
Kazakhstan and the mining industry is running in excess of 8% which places
pressure on input prices denominated in both US dollars and Kazakhstan tenge. In
addition, the Kazakhstan tenge appreciated against the US dollar by 3.1%
compared to the corresponding period in 2006. As certain costs are denominated
in US dollars, this strengthening of the Kazakhstan tenge leads to higher costs
for the Kazakh Mining business whose functional currency is the Kazakhstan
tenge.

Employee remuneration increased for both production and administrative staff
following a pay rise in the fourth quarter of 2006 which was necessary to bring
average salaries within the business into line with the local market. Employee
remuneration is increasing generally across Kazakhstan due to rising levels of
prosperity and a tightening labour market for skilled labour across the natural
resources sector within the CIS.

Transportation and repair costs increased by 62.2% to $45.9 million primarily
due to higher costs in transporting ore from the recently opened Kosmurun mine
to the Karagaily concentrator some 220km away. A pre-feasibility study is
currently in progress on the construction of a new concentrator at Kosmurun
which should reduce these transportation costs in the future. In addition, fuel
costs increased by 31.0% to $37.4 million reflecting the global increase in
costs for gasoline and diesel fuel and the increased transportation relating to
the Kosmurun mine referred to previously. Utilities costs doubled to $12.8
million compared to the prior period reflecting increased tariffs and the higher
costs to transmit electricity to more remote mines in the East Region and
Karaganda Complex.

Selling and distribution costs increased slightly by $2.0 million to $26.2
million, an increase of 8.3%. This relatively small increase was due to a shift
in sales from Europe to China in 2007 compared to 2006 with lower relative
transportation and tariff charges. Administration costs rose by 53.5% to $133.2
million. This increase is mainly due to increases in employee remuneration,
higher levies and charges following the completion of the statutory tax audit in
early 2007, and higher social responsibility costs within Kazakhstan which
reflect our commitment to the communities in which we operate.

Depreciation, depletion and amortisation increased from $92.3 million to $103.1
million. This was due to a higher book value of property, plant and equipment
attributable to rising levels of capital expenditure in recent years as well as
the effect of the appreciation of the Kazakhstan tenge against the US dollar.

The cash cost of copper after by-product credits is a key measure in assessing
the ability of the Kazakh Mining business to control its production costs and
maximise credits from by-product production. For the period ended 30 June 2007,
the cash cost of copper after by-product credits amounted to 44.5 USc/lb
compared to 25.5 USc/lb in the prior period. This increase was primarily due to
the increased cost of purchased concentrate which is reflected within the
overall cash cost of copper. The Group continues to maximise by-product credits
whilst still focusing on controlling operating costs.

MKM

Although EBITDA excluding special items fell from $40.5 million to $37.1
million, the underlying performance of MKM was masked by the impact of copper
price fluctuations on stock valuation, during a period of falling stock levels
at MKM which were gradually being managed downwards for working capital
purposes. Within earnings, a contribution of approximately $19 million (30 June
2006: $28 million) arose from an increased stock valuation as a result of a
combination of rising copper prices and falling stock levels. The impact of this
contribution during the period was less than in the prior period and conceals
the improvement in the underlying trading performance of MKM compared to the
prior period.

A more informed trading performance measure for MKM is the 'Gross Value Add'
(GVA) as MKM is primarily a fabricating downstream business. This measure is
commonly used in this industry to measure the 'value add' of the production
process to purchased raw materials. Despite only a 1.5% increase in sales
volumes, the GVA rose from $78.5 million to $104.5 million, an increase of 33.1%
due to a combination of higher margin products being sold, improved market
conditions and increased conversion charges.

NET FINANCE ITEMS

Net finance costs were $17.5 million during the period, which contrasted with
net finance costs of $35.1 million that arose in the prior period.

A net foreign exchange loss of $52.7 million is included within the net finance
cost, compared to a loss of $63.8 million that was recognised in the prior
period. The foreign exchange loss primarily arose on the high level of US dollar
denominated cash deposits and current investments within Kazakhmys LLC as a
result of the appreciation of the Kazakhstan tenge against the US dollar which
moved from 127.00 KZT/$ as at 31 December 2006 to 122.31 at 30 June 2007, a 3.7%
movement.

Finance income primarily relates to interest earned from US dollar and
Kazakhstan tenge denominated cash and deposits placed with financial
institutions in both the UK and Kazakhstan. Interest income of $45.9 million is
35.0% higher than the prior period amount of $34.0 million reflecting higher
cash and deposit balances compared to the prior period resulting from higher
commodity prices, and the effect of higher global interest rates on liquid
funds.

Finance costs, other than foreign exchange, include a finance cost of $6.1
million which relates to the interest expense on the MKM bank loan, up from $1.7
million in the prior period.

TAXATION

The effective tax rate for the period was 32.4% compared to a rate of 33.2% in
the prior period. The overall tax charge was $384.3 million, an increase of
$67.3 million compared to the prior period primarily as a result of the increase
in earnings within the Group.

Excess profits tax is levied in addition to corporate tax on the profits
attributable to certain subsoil contracts where the internal rate of return
exceeds 20%. For the period, excess profits tax of $33.1 million was charged to
earnings which represented an incremental 2.8% to the effective tax rate, up
from 2.6% in the prior period.

Withholding taxes of $20.0 million were accrued during the period representing
an incremental 1.7% to the effective tax rate, up from 0.7% in the prior period.
These withholding taxes relate to profits arising within Kazakhstan which are
expected to be remitted to the UK for dividend purposes.

The effective tax rate has decreased from the prior period principally due to
the overprovision of income taxes in previous years which contrasted with an
underprovision of income taxes in the six months ended 30 June 2006. Non-taxable
income arising from the Balkhash zinc smelter for which Kazakhmys LLC benefits
from a tax holiday contributes to a reduction in the effective tax rate although
this impact is dependent on the level of zinc production.

Following an increase in trade taxes within Germany, the effective tax rate for
MKM increased from 35.98% to 37.34% during the period. However, following the
German government's recent decision to reduce corporate tax rates, the effective
tax rate for MKM is expected to fall in the second half of the year.

The effective tax rate is expected to remain at levels in excess of the
statutory Kazakhstan tax rate of 30% due to excess profits taxes arising on
profitable subsoil contracts at the current time of high commodity prices, and
the additional withholding taxes payable on dividend distributions from
Kazakhstan to the UK.

UNDERLYING PROFIT AND EARNINGS PER SHARE

Profit for the year attributable to equity shareholders increased from $632.7
million to $794.2 million, an increase of 25.5% compared to the prior period.
Underlying Profit is seen as a more informed measure of the performance of the
business as it removes non-recurring or variable non-trading items from profit
attributable for the year, and their resulting tax and minority interest
impacts. It therefore provides a more consistent basis for comparing the
underlying trading performance of the Group between 2007 and 2006.

The increase of 29.1% in Underlying Profit principally reflects the favourable
impact of higher commodity prices on earnings.


The reconciliation of Underlying Profit from profit attributable to equity
shareholders is set out below:

                                                           Six months   Six months    Change
                                                                ended        ended         %
$million (unless otherwise stated)                       30 June 2007 30 June 2006
--------------------------------------------------------------------------------------------
Profit attributable to equity                                   794.2        632.7      25.5
shareholders of the parent
Special items:
      Recognition of negative goodwill                              -         (6.5)
      Write off/(back) of property, plant and                     3.8        (10.2)
      equipment
      Loss on disposal of fixed assets                            1.8          4.0
Tax effect of special items                                      (0.3)        (0.8)
Minority interest effect of special items                         0.1          0.1
--------------------------------------------------------------------------------------------
Underlying Profit                                               799.6        619.3      29.1
--------------------------------------------------------------------------------------------


Basic earnings per share rose from $1.35 to $1.70, an increase of 25.9%.
Earnings per share based on Underlying Profit was $1.71 compared to $1.32 for
the prior period, an increase of 29.5%.

DIVIDENDS

The Directors have declared an interim dividend of 13.6 US cents per share in
respect of the 2007 financial year.

Taking into account the profitability of the business and underlying growth in
earnings of the Group, together with its cash flows and growth requirements, the
Directors have declared a special dividend of 50.0 US cents per share and have
also announced a share buy-back programme of up to $400 million that will take
place from October 2007 as a means of returning cash to shareholders.

Interim and final dividends will be paid in the approximate proportions of
one-third and two-thirds of the total annual dividend, respectively. The
Directors will also ensure that dividend cover is prudently maintained.

CASH FLOWS

A summary of cash flows is set out below:

                                                      Six months      Six months
                                                           ended           ended
$million                                            30 June 2007    30 June 2006
--------------------------------------------------------------------------------
EBITDA                                                   1,318.1         1,087.5
Recognition of negative goodwill                               -            (6.5)
Write off/(back) of assets and impairment                    4.9            (5.7)
losses
Gain on disposal of assets held for trading                 (0.5)              -
Loss on disposal of property, plant and                      1.8             4.0
equipment
Foreign exchange loss adjustment                           (20.1)          (14.4)
Working capital movements                                 (172.7)         (197.0)
Interest paid                                               (6.2)           (0.2)
Income tax paid                                           (427.1)         (169.2)
--------------------------------------------------------------------------------
Net cash flows from operating activities                   698.2           698.5
Sustaining capital expenditure                             (83.8)          (76.2)
--------------------------------------------------------------------------------
Free Cash Flow                                             614.4           622.3
Expansionary and new project capital                      (566.4)          (95.4)
expenditure
Interest received                                           57.9            46.5
Acquisition of subsidiaries, net of cash                       -            (2.0)
acquired
Dividends paid                                            (123.2)         (170.4)
Other movements                                              0.8             0.6
--------------------------------------------------------------------------------
Cash flow movement in net liquid funds                     (16.5)          401.6
--------------------------------------------------------------------------------


Cash flows from operating activities during the period were $698.2 million in
line with the prior period. Despite adverse working capital movements and
significantly higher payments to the tax authorities, Free Cash Flow was a
healthy $614.4 million.

Of the $172.7 million adverse working capital movement, $145.9 million related
to a reduction in trade and other payables. This reduction was primarily due to
the expiry of a 2006 sales contract whereby in December 2006, the customer made
a significant payment in advance of the goods being shipped in early 2007. In
addition, there was a general reduction in the level of trade payables
outstanding within the Kazakh Mining business in order to obtain better terms
with suppliers.

Inventory levels were sharply reduced due to a number of factors: 49kt of copper
cathodes held as goods in transit at 31 December 2006 were sold in early 2007;
lower levels of purchased concentrate were held at 30 June 2007 due to its
utilisation within the production process; and MKM changed working practices
within the business in order to reduce inventory levels. These factors were
partially offset by the stockpiling of ore at the Nurkazgan mine which is due to
be processed in the second half of the year when the new concentrator is brought
on-line.

The level of receivables was higher at 30 June 2007 and this was primarily due
to credit being given to Chinese customers within the 2007 sales contracts,
whereas for the 2006 sales contracts, payment for goods was mostly required in
advance of delivery. The difference between the working capital movements across
balance sheets, and those seen in the cash flow summary are mainly attributable
to the appreciation of the Kazakhstan tenge which is a non-cash movement.

Income tax payments were significantly higher at $427.1 million for the six
months ended 30 June 2007 compared with $169.2 million in the prior period to 30
June 2006, an increase of $257.9 million. The higher level of tax payments is
mainly attributable to the 2007 schedule of tax payments on account that was
agreed with the tax authorities being based on earnings from 2006, which were
significantly higher than earnings in 2005 (on which the 2006 tax payments
schedule was based upon). In addition, the higher tax payments during 2007 were
compounded by a significant catch-up payment in the first quarter of 2007 due to
the lower 2006 tax payment schedule referred to previously. The Group also paid
around $60 million of excess profits tax to the tax authorities during April
2007 in respect of the year ended 31 December 2006.

Capital expenditure in aggregate (including expenditure on property, plant and
equipment, intangible assets and mine stripping costs) amounted to $650.2
million, split between $83.8 million for sustaining capital expenditure and
$566.4 million for expansionary and new project capital expenditure. The main
items in the latter category were the cost of acquiring Dostan-Temir LLP and the
related oil and gas licence, the acquisition of land in Almaty for the
construction of a new head office, an advance payment for a new aircraft as part
of a fleet replacement programme, expenditure on the recently constructed
Balkhash acid plant and the construction of the new concentrator at the
Nurkazgan mine.

BALANCE SHEET

Shareholders' funds were $4,662.0 million as at 30 June 2007, an increase of
$802.1 million compared with the balance as at 31 December 2006. The increase
reflected retained earnings of $794.2 million, favourable currency translation
differences of $128.0 million primarily due to the appreciation of the
Kazakhstan tenge against the US dollar by 3.7% over the period, being offset by
the final 2006 dividend declared during the period of $120.1 million. The
currency translation differences were primarily attributable to the
consolidation of the results and balances of the Group's Kazakhstan
subsidiaries, whose functional currencies are the Kazakhstan tenge, into US
dollars.

Property, plant and equipment increased by 7.2% to $2,050.6 million over the
period after the effect of depreciation of $109.8 million was more than offset
by capital expenditure of $186.8 million and favourable currency translation
differences of $69.0 million. Disposals of property, plant and equipment were
not significant during the period.

Intangible assets increased by $485.4 million over the period from $28.9 million
at 31 December 2006 to $514.3 million at 30 June 2007. This increase was mainly
represented by the purchase of Dostan-Temir LLP and the related oil and gas
licence and new mining licences for the Aidarly and Akbastau mineral deposits as
part of the Group's ongoing exploration programme.

Net liquid funds decreased slightly to $1,740.4 million at 30 June 2007 compared
with $1,745.3 million as at 31 December 2006 following the significant capital
expenditure on property, plant and equipment, mine stripping costs and
intangible assets of $650.2 million, largely offsetting operating cash flows of
$698.2 million. Of the net liquid funds balance, $1,604.2 million was held as
cash and cash equivalents, $357.2 million was held in the form of deposits with
varying maturities of at least three months from inception, and borrowings in
MKM were $221.0 million.

During the period, liquid funds held within the Kazakh Mining business were
moved from financial institutions based in Kazakhstan to Western Europe, such
that at the period end, 25% of the Group's liquid funds were held within
Kazakhstan compared to 74% at 31 December 2006. Since the period end, further
transfers of liquid funds have been undertaken to ensure that only working
capital requirements and a small contingency will be held within Kazakhstan.
Whilst these transfers will adversely impact the level of interest income earned
on the Group's liquid funds, counterparties located within Western Europe should
attract higher credit ratings.

The Company is due to issue 2,559,665 ordinary shares of 20 pence each and has
paid $11.5 million in consideration for the transfer to it of 227,959,211 units
in Kazakhmys LLC previously owned by minority shareholders. As a result of this,
the Company's interest in Kazakhmys LLC will increase from 99.08% as at 30 June
2007 to 99.73%.


INDEPENDENT REVIEW REPORT TO KAZAKHMYS PLC

Introduction

We have been instructed by Kazakhmys PLC to review the financial information of
Kazakhmys PLC and its subsidiaries (the Group) for the six months ended 30 June
2007 which comprises the interim consolidated income statement, interim
consolidated balance sheet, interim consolidated cash flow statement, the
interim consolidated statement of changes in equity and the related notes 1 to
19. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.

This report is made solely to the Company in accordance with guidance contained
in Bulletin 1999/4 'Review of Interim Financial Information' issued by the
United Kingdom Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Company, for
our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/
4. A review consists principally of making enquiries of Group management and
applying analytical procedures to the financial information and underlying
financial data, and based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A review
excludes audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.


Ernst & Young LLP
London, United Kingdom
3 September 2007



INTERIM CONSOLIDATED INCOME STATEMENT
Six months ended 30 June 2007


                                                          Six months Six months        Year
                                                               ended      ended       ended
                                                             30 June    30 June 31 December
$million (unless otherwise stated)                 Notes        2007       2006        2006
-------------------------------------------------------------------------------------------
Revenues                                             4       2,789.3    2,279.8     5,046.5
Cost of sales                                               (1,372.6)  (1,153.4)   (2,612.4)
-------------------------------------------------------------------------------------------
Gross profit                                                 1,416.7    1,126.4     2,434.1
Selling and distribution expenses                              (41.9)     (38.1)      (81.4)
Administrative expenses                                       (166.7)    (116.1)     (280.8)
Other operating income                                          15.4       19.9        44.7
Other operating expenses                                       (15.3)     (13.3)      (35.1)
Write (off)/back of assets and impairment losses     5          (4.9)       5.7        (9.9)
-------------------------------------------------------------------------------------------
Profit before taxation, finance items and                    1,203.3      984.5     2,071.6
negative goodwill
Finance income                                       6         110.1       62.9       266.8
Finance costs                                        6        (127.6)     (98.0)     (177.1)
Recognition of negative goodwill                                   -        6.5         6.5
-------------------------------------------------------------------------------------------
Profit before taxation                                       1,185.8      955.9     2,167.8
Income tax expense                                   7        (384.3)    (317.0)     (754.7)
-------------------------------------------------------------------------------------------
Profit for the period                                          801.5      638.9     1,413.1
-------------------------------------------------------------------------------------------
Attributable to:
Equity shareholders of the Company                             794.2      632.7     1,399.7
Minority interests                                               7.3        6.2        13.4
-------------------------------------------------------------------------------------------
                                                               801.5      638.9     1,413.1
-------------------------------------------------------------------------------------------
Earnings per share attributable to equity
shareholders of the Company
Basic and diluted ($)                                8          1.70       1.35        2.99
EPS based on Underlying Profit ($)                   8          1.71       1.32        3.00
-------------------------------------------------------------------------------------------
Dividends
Dividend per share (US cents)                        9          25.7       36.0        48.8
Total amount of dividends                            9         120.1      168.3       228.1
-------------------------------------------------------------------------------------------


INTERIM CONSOLIDATED BALANCE SHEET
At 30 June 2007


                                                                   At        At          At
                                                              30 June   30 June 31 December
$million                                          Notes          2007      2006        2006
-------------------------------------------------------------------------------------------
Assets
Non-current assets
Intangible assets                                   10          514.3      30.3        28.9
Tangible assets                                               2,105.1   2,040.8     1,958.3
-------------------------------------------------------------------------------------------
Property, plant and equipment                       11        2,050.6   1,988.3     1,912.6
Mine stripping costs                                             54.5      52.5        45.7
-------------------------------------------------------------------------------------------
Investments                                                       7.2       7.3         6.2
-------------------------------------------------------------------------------------------
                                                              2,626.6   2,078.4     1,993.4
-------------------------------------------------------------------------------------------
Current assets
Inventories                                                     681.8     541.2       730.6
Prepayments and other current assets                            137.5      82.3       110.4
Trade and other receivables                                     336.4     304.2       263.5
Investments                                         12          357.2     823.8     1,237.2
Cash and cash equivalents                           13        1,604.2     582.2       785.4
-------------------------------------------------------------------------------------------
                                                              3,117.1   2,333.7     3,127.1
-------------------------------------------------------------------------------------------
TOTAL ASSETS                                                  5,743.7   4,412.1     5,120.5
-------------------------------------------------------------------------------------------
Equity and liabilities
Equity
Share capital                                       14          173.3     173.3       173.3
Share premium                                       14          503.4     503.4       503.4
Foreign currency translation reserve                14          356.6     421.3       228.6
Reserve fund                                        14           37.6      37.6        37.6
Retained earnings                                             3,591.1   2,210.7     2,917.0
-------------------------------------------------------------------------------------------
Equity attributable to shareholders of the                    4,662.0   3,346.3     3,859.9
Company
Minority interests                                               39.9      28.7        31.9
-------------------------------------------------------------------------------------------
Total equity                                                  4,701.9   3,375.0     3,891.8
-------------------------------------------------------------------------------------------
Non-current liabilities
Deferred tax liability                                          353.7     280.2       347.7
Employee benefits                                                36.5      32.7        32.7
Provisions                                                       88.5      55.4        57.4
Borrowings                                          15          221.0     184.6       277.3
-------------------------------------------------------------------------------------------
                                                                699.7     552.9       715.1
-------------------------------------------------------------------------------------------
Current liabilities
Provisions                                                       10.0       3.7         1.9
Trade and other payables                                        192.5     193.1       330.4
Dividend payable                                                  1.4       1.9         4.4
Income tax payable                                              138.2     285.5       176.9
-------------------------------------------------------------------------------------------
                                                                342.1     484.2       513.6
-------------------------------------------------------------------------------------------
Total liabilities                                             1,041.8   1,037.1     1,228.7
-------------------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES                                  5,743.7   4,412.1     5,120.5
-------------------------------------------------------------------------------------------
The interim consolidated financial statements were approved by the Board of Directors on 3 September 2007.



INTERIM CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2007



                                                           Six months  Six months        Year
                                                                ended       ended       ended
                                                              30 June     30 June 31 December
$million                                           Notes         2007        2006        2006
---------------------------------------------------------------------------------------------
Cash flows from operating activities
Cash receipts from customers                                  2,674.2     2,340.4     5,076.6
Cash paid to employees and suppliers                         (1,542.7)   (1,472.5)   (3,034.3)
---------------------------------------------------------------------------------------------
Cash inflow before interest and income tax paid               1,131.5       867.9     2,042.3
Interest paid                                                    (6.2)       (0.2)       (6.8)
Income tax paid                                                (427.1)     (169.2)     (623.3)
---------------------------------------------------------------------------------------------
Net cash inflow from operating activities            16         698.2       698.5     1,412.2
---------------------------------------------------------------------------------------------
Cash flows from investing activities
Interest received                                                57.9        46.5        77.2
Proceeds from disposal of property, plant and                     2.4         0.1         3.4
equipment
Purchase of property, plant and equipment                      (186.8)     (165.0)     (338.0)
Mine stripping costs                                            (11.6)       (5.9)       (6.7)
Purchase of intangible assets                                  (451.8)       (0.7)       (0.4)
Licence payments for subsoil contracts                           (0.8)       (0.9)       (1.6)
Proceeds from disposal of non-current investments                 0.8         1.1         2.6
Acquisition of non-current investments                           (1.6)       (1.3)       (0.7)
Proceeds from disposal of assets held for trading                51.7         1.0         1.0
Acquisition of assets held for trading                              -           -       (50.8)
Investment in short-term bank deposits, net                     833.9      (447.2)     (784.7)
Acquisition of subsidiaries, net of cash acquired                   -        (2.0)       (2.0)
---------------------------------------------------------------------------------------------
Net cash flows from/(used) in investing activities              294.1      (574.3)   (1,100.7)
---------------------------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from contribution to charter capital of                    -         1.6         1.6
subsidiary by minority interests
Proceeds from borrowings                                            -       167.0       249.5
Repayment of borrowings                                         (58.7)      (41.4)      (41.5)
Dividends paid by the Company                                  (120.1)     (168.3)     (230.4)
Dividends paid by subsidiary to minority interests               (3.1)       (2.1)       (3.0)
---------------------------------------------------------------------------------------------
Net cash flows used in financing activities                    (181.9)      (43.2)      (23.8)
---------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents            17         810.4        81.0       287.7
Cash and cash equivalents at the beginning of the    17         785.4       522.0       522.0
period
Effect of exchange rate changes on cash and cash     17           8.4       (20.8)      (24.3)
equivalents
---------------------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period   13       1,604.2       582.2       785.4
---------------------------------------------------------------------------------------------


INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 June 2007

                               Attributable to equity shareholders of the parent
                             ---------------------------------------------------
                                                
$million              Notes                        Foreign     
                                                  currency               
                              Share     Share  translation  Reserve  Retained             Minority     Total
                            capital   premium      reserve     fund  earnings    Total   interests    equity
------------------------------------------------------------------------------------------------------------
At 1 January 2006             173.3     503.4        147.9      9.4   1,765.8  2,599.8        26.3   2,626.1
Profit for the period             -         -            -        -     632.7    632.7         6.2     638.9
Currency translation              -         -        273.4        -         -    273.4         3.3     276.7
differences
------------------------------------------------------------------------------------------------------------
                                  -         -        273.4        -     632.7    906.1         9.5     915.6
Contribution to                   -         -            -        -         -        -         1.6       1.6
charter capital of
subsidiary by
minority shareholders
Transfer to reserve               -         -            -     28.2     (28.2)       -           -         -
fund
Gain from dilution of             -         -            -        -       8.7      8.7        (8.7)        -
minority interest in
subsidiary
Acquisition of                    -         -            -        -         -        -         0.9       0.9
minority interest in
subsidiary
Equity dividends                  -         -            -        -         -        -        (0.9)     (0.9)
declared by
subsidiary to
minority shareholders
Equity dividends        9         -         -            -        -    (168.3)  (168.3)          -    (168.3)
declared by the
Company
------------------------------------------------------------------------------------------------------------
At 30 June 2006               173.3     503.4        421.3     37.6   2,210.7  3,346.3        28.7   3,375.0
------------------------------------------------------------------------------------------------------------
At 1 January 2006             173.3     503.4        147.9      9.4   1,765.8  2,599.8        26.3   2,626.1
Profit for the year               -         -            -        -   1,399.7  1,399.7        13.4   1,413.1
Currency translation              -         -         80.7        -         -     80.7         0.4      81.1
differences
------------------------------------------------------------------------------------------------------------
                                  -         -         80.7        -   1,399.7  1,480.4        13.8   1,494.2
Contribution to                   -         -            -        -         -        -         1.6       1.6
charter capital of
subsidiary by
minority shareholders
Transfer to reserve               -         -            -     28.2     (28.2)       -           -         -
fund
Gain from dilution of             -         -            -        -       7.8      7.8        (7.8)        -
minority interest in
subsidiary
Acquisition of                    -         -            -        -         -        -         1.0       1.0
minority interest in
subsidiary  
Equity dividends                  -         -            -        -         -        -        (3.0)     (3.0)
declared by
subsidiary to
minority shareholders
Equity dividends        9         -         -            -        -    (228.1)  (228.1)          -    (228.1)
declared by the 
Company
------------------------------------------------------------------------------------------------------------
At 31 December 2006           173.3     503.4        228.6     37.6   2,917.0  3,859.9        31.9   3,891.8
------------------------------------------------------------------------------------------------------------
Profit for the period             -         -            -        -     794.2    794.2         7.3     801.5
Currency translation              -         -        128.0        -         -    128.0         1.2     129.2
differences
------------------------------------------------------------------------------------------------------------
                                  -         -        128.0        -     794.2    922.2         8.5     930.7
Equity dividends                  -         -            -        -         -        -        (0.5)     (0.5)
declared by
subsidiary to
minority shareholders
Equity dividends        9         -         -            -        -    (120.1)  (120.1)          -    (120.1)
declared by the
Company
------------------------------------------------------------------------------------------------------------
At 30 June 2007               173.3     503.4        356.6     37.6   3,591.1  4,662.0        39.9   4,701.9
------------------------------------------------------------------------------------------------------------


NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Six months ended 30 June 2007


1. General information

Kazakhmys PLC is a public limited company incorporated in the United Kingdom of
Great Britain and Northern Ireland. The Company's registered address is 6th
Floor, Cardinal Place, 100 Victoria Street, London, SW1E 5JL, United Kingdom.
The Group comprises the Company and its consolidated subsidiaries.

The Group's operations are primarily conducted through the Company's principal
subsidiary, Kazakhmys LLC. Its major business is the mining and processing of
copper ore into cathode copper and copper wire, and the refining and sale of
precious metals and other by-products of its copper mining process. It also
provides other services to various external customers.

These interim consolidated financial statements are for the six months ended 30
June 2007. The information for the year ended 31 December 2006 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. A copy of the statutory accounts for that year, which were prepared in
accordance with International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) and interpretations issued by
the International Financial Reporting Interpretations Committee (IFRIC) of the
IASB, as adopted by the European Union up to 31 December 2006, has been
delivered to the Register of Companies. The auditors' report under section 235
of the Companies Act 1985 in relation to those accounts was unqualified.

2. Basis of preparation

(a) Interim Consolidated Financial Statements

The interim consolidated financial statements have been prepared in accordance
with IAS 34 'Interim Financial Reporting'. The interim consolidated financial
statements do not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction with the Group's
annual financial statements for the year ended 31 December 2006.

(b) Comparative figures

Where a change in the presentational format of the interim consolidated
financial statements has been made during the period, comparative figures have
been restated accordingly.

3. Significant accounting policies

The interim consolidated financial statements have been prepared under a
historical cost basis, except for certain classes of property, plant and
equipment which have been revalued at 1 January 2002 to determine deemed cost as
part of the first-time adoption of IFRS at that date, and derivative financial
instruments which have been measured at fair value. The interim consolidated
financial statements are presented in US dollars ($) and all monetary amounts
are rounded to the nearest million ($million) except when otherwise indicated.

The accounting policies adopted are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 31
December 2006, except for the adoption of new Standards and Interpretations,
noted below. Adoption of these standards and interpretations did not have any
significant effect on the financial position or performance of the Group.

   • IFRS 7 'Financial Instruments: Disclosures' and consequential amendments
     to IAS 1 'Presentation of Financial Statements: Capital disclosures'. The
     Group adopted IFRS 7 and IAS 1 as of 1 January 2007, which require an entity
     to disclose additional information about its financial instruments, their
     significance and the nature and extent of risks to which they give rise.
   • IFRIC 9 'Reassessment of Embedded Derivatives'. The Group adopted IFRIC
     9 as of 1 January 2007, which states that the date to assess the existence
     of an embedded derivative is the date that an entity first becomes party to
     the contract that significantly modifies the cash flows.
   • IFRIC 10 'Interim financial reporting and impairment'. The Group adopted
     IFRIC 10 as of 1 January 2007, which requires that an entity must not
     reverse an impairment loss recognised in a previous interim period in
     respect of goodwill or an investment in either an equity instrument or a
     financial asset carried at cost.

In preparing the interim consolidated financial statements the Group has adopted
all the extant accounting standards issued by the IASB and all the extant
interpretations issued by the IFRIC as at 30 June 2007.


The following foreign exchange rates against the US dollar have been used in the
preparation of the interim consolidated financial statements:

                                   30 June 2007        30 June 2006      31 December 2006
                                   ------------------------------------------------------
                                     Spot   Average      Spot   Average      Spot   Average
-------------------------------------------------------------------------------------------
Kazakhstan tenge                   122.31    123.16    118.69    127.10    127.00    126.09
Euro                                 0.74      0.75      0.80      0.81      0.76      0.80
UK pound sterling                    0.50      0.51      0.55      0.56      0.51      0.54
-------------------------------------------------------------------------------------------


4. Segment information

Segment information is presented in respect of the Group's primary basis of
segmentation in business segments, which are based on the Group's management and
internal reporting structures.


Segment results, assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise corporate head office assets and liabilities, income
taxes payable, deferred taxes and dividends payable/receivable as well as the
assets and liabilities of Kazakhmys Petroleum LLP.


The Group's activities principally relate to:

   • Kazakh Mining business which involves the production and sale of:
     - Copper cathodes and copper rod;
     - Zinc and zinc concentrate;
     - Gold and silver; and
     - Other by-products (lead, rhenium, selenium, cadmium, sulphuric acid).
   • German copper processing operation of semi-finished products; and
   • Kazakh oil and gas exploration and development activity.


(a) Business segments

Kazakh Mining

The Kazakh Mining business, which involves the processing and sale of copper and
other metals, is managed as one business segment. The products are subject to
the same risks and returns, exhibit similar long-term financial performance and
are sold through the same distribution channels. The Group mines substantially
all the copper ore it processes and utilises most of the copper concentrate it
processes. The Group has a number of activities that exist solely to support the
mining operations including power generation, coal mining and transportation.
These other activities generate less than 10% of total revenues (both external
and internal) and the related assets are less than 10% of total assets.


The UK operation consists of two functions:

   • A trading function responsible for the purchases of products from the
     Kazakh Mining operations, application of an appropriate mark-up and then
     onward sale to third parties; and
   • A corporate head office function.

For the purposes of business segmental reporting, the trading function is
regarded as a sales function on behalf of the Kazakh Mining business and
consequently the assets and liabilities related to those trading operations,
i.e. trade creditors and trade receivables, are included with the Kazakh Mining
business segment. The expenses, assets and liabilities of the corporate head
office function are included within unallocated items.

The price at which sales are made to the Company by Kazakhmys LLC is based on
the prevailing price of commodities as determined by the LME.

MKM

MKM operates in Germany and manufactures copper and copper alloy semi-finished
products. MKM faces different risks to the Group's Kazakh Mining business and is
therefore shown as a separate business segment.

Kazakhmys Petroleum LLP

In April 2007, the Group acquired Kazakhmys Petroleum LLP (previously called
Dostan-Temir LLP), a company which holds a licence to conduct oil and gas
exploration and development activity in the East Akzhar petroleum block in
Western Kazakhstan. In accordance with IAS 14 'Segment reporting', since the
revenues, results and net assets of the company are all less than 10% of the
Group's, the expenses, assets and liabilities of Kazakhmys Petroleum LLP are
included within unallocated items.

Segmental information by business segment for the periods ended 30 June 2007, 30
June 2006 and 31 December 2006 is presented below.


(i) Income statement information

                            Six months ended     Six months ended         Year ended
                              30 June 2007         30 June 2006        31 December 2006
                        ---------------------------------------------------------------
$million                 Kazakh     MKM    Total   Kazakh     MKM    Total   Kazakh      MKM    Total
                         Mining                    Mining                    Mining
-----------------------------------------------------------------------------------------------------
Sales to external       1,978.0   811.3  2,789.3  1,520.9   758.9  2,279.8  3,330.4  1,716.1  5,046.5
customers
-----------------------------------------------------------------------------------------------------
Gross profit            1,364.6    52.1  1,416.7  1,073.0    53.4  1,126.4  2,364.5     69.6  2,434.1
Operating costs          (171.2)  (26.3)  (197.5)   (99.9)  (23.4)  (123.3)  (282.4)   (48.0)  (330.4)
-----------------------------------------------------------------------------------------------------
Segment results         1,193.4    25.8  1,219.2    973.1    30.0  1,003.1  2,082.1     21.6  2,103.7
Unallocated costs                          (15.9)                    (18.6)                     (32.1)
------------------------------------------------------------------------------------------------------
Profit before taxation,                  1,203.3                     984.5                    2,071.6
finance items and
negative goodwill
Net finance (costs)/                       (17.5)                    (35.1)                      89.7
income
Recognition of negative                        -                       6.5                        6.5
goodwill
------------------------------------------------------------------------------------------------------
Profit before taxation                   1,185.8                     955.9                    2,167.8
Income tax expense                        (384.3)                   (317.0)                    (754.7)
------------------------------------------------------------------------------------------------------
Profit for the period                      801.5                     638.9                    1,413.1
------------------------------------------------------------------------------------------------------




(ii) Balance sheet information

                            At 30 June 2007      At 30 June 2006     At 31 December 2006     
                           ------------------------------------------------------------------
$million                 Kazakh     MKM    Total   Kazakh     MKM    Total   Kazakh      MKM    Total
                         Mining                    Mining                    Mining
-----------------------------------------------------------------------------------------------------
Assets
Tangible and            1,974.2   160.7  2,134.9  1,900.1   167.8  2,067.9  1,816.1    166.1  1,982.2
intangible assets
Non-current                 5.2     2.0      7.2      4.1     3.2      7.3      3.5      2.7      6.2
investments
Operating assets (1)      736.1   419.8  1,155.9    527.5   387.8    915.3    713.4    395.2  1,108.6
Current investments       357.2       -    357.2    823.8       -    823.8  1,237.2        -  1,237.2
Cash and cash           1,179.9    18.0  1,197.9     96.8    18.6    115.4    405.0     30.0    435.0
equivalents
-----------------------------------------------------------------------------------------------------
Segment assets          4,252.6   600.5  4,853.1  3,352.3   577.4  3,929.7  4,175.2    594.0  4,769.2
-----------------------------------------------------------------------------------------------------
Unallocated assets:
Non-current assets                       1,635.8                   1,154.5                    1,156.3
Current assets                              10.0                      21.6                        6.0
Dividends                                      -                         -                      304.5
receivable
Cash and cash                              406.3                     466.8                      350.4
equivalents
Elimination                             (1,161.5)                 (1,160.5)                  (1,465.9)
-----------------------------------------------------------------------------------------------------
Total assets                             5,743.7                   4,412.1                    5,120.5
-----------------------------------------------------------------------------------------------------
Liabilities
Employee benefits         125.9      9.1   135.0     82.9     8.9     91.8     85.0      7.0     92.0
and provisions
Operating                  86.5     73.0   159.5    147.8    29.5    177.3    599.5     37.9    637.4
liabilities (2)
Segment liabilities       212.4     82.1   294.5    230.7    38.4    269.1    684.5     44.9    729.4
Unallocated
liabilities:
Other payables                             44.6                       26.9                       12.0
Deferred tax                              353.7                      280.2                      347.7
liability
Borrowings                                221.0                      184.6                      277.3
Income tax payable                        138.2                      285.5                      176.9
Elimination                               (10.2)                      (9.2)                    (314.6)
-----------------------------------------------------------------------------------------------------
Total liabilities                       1,041.8                    1,037.1                    1,228.7
-----------------------------------------------------------------------------------------------------

(1) Operating assets include inventories, trade and other receivables and prepayments and other current assets.

(2) Operating liabilities include trade and other payables and dividends payable by Kazakhmys LLC to the Company.

(iii) Earnings before interest, tax, depreciation and amortisation (EBITDA)
      excluding special items (1) by business segments

                            Six months ended       Six months ended          Year ended
                              30 June 2007           30 June 2006         31 December 2006

                           -------------------------------------------------------------------------
$million           Kazakh     MKM      Un-    Total   Kazakh    MKM       Un-  Total    Kazakh   MKM      Un-    Total
                   Mining        allocated            Mining        allocated           Mining      allocated
----------------------------------------------------------------------------------------------------------------------
Profit/(loss)     1,193.4    25.8    (15.9) 1,203.3   973.1    30.0    (18.6)  984.5   2,082.1  21.6    (32.1) 2,071.6
before taxation,
finance items and
negative goodwill
Special items:
Add/(less):           3.8       -        -      3.8   (10.2)      -        -   (10.2)      1.4     -        -      1.4
write off/
(back) of property,
plant and equipment
Add/(less):           1.7     0.1        -      1.8     3.6    (0.1)     0.5     4.0       8.9   0.1      0.6      9.6
loss/(gain)
on disposal of 
property, plant and
equipment
----------------------------------------------------------------------------------------------------------------------
Profit /(loss)    1,198.9    25.9    (15.9) 1,208.9   966.5    29.9    (18.1)  978.3   2,092.4  21.7    (31.5) 2,082.6
before taxation,
finance items and
negative goodwill
excluding special
items
Add:                101.8    11.1      0.5    113.4    91.4    10.4      0.1   101.9     200.8  21.8      0.4    223.0
depreciation
and depletion
Add:                  1.3     0.1        -      1.4     0.9     0.2        -     1.1       2.4   0.4        -      2.8
amortisation
----------------------------------------------------------------------------------------------------------------------
EBITDA            1,302.0    37.1    (15.4) 1,323.7 1,058.8    40.5    (18.0) 1,081.3  2,295.6  43.9    (31.1) 2,308.4
excluding special
items
----------------------------------------------------------------------------------------------------------------------

(1)EBITDA excluding special items is defined as profit before interest, taxation, depreciation and amortisation, 
as adjusted for special items. Special items are those items which are non-recurring or variable non-trading in 
nature and which do not impact the underlying trading performance of the business.



(iv) Net liquid funds/(debt) by business segments

                              Six months ended       Six months ended          Year ended
                                  30 June 2007           30 June 2006         31 December 2006
                             -----------------------------------------------------------------
$million           Kazakh     MKM(1)   Un-    Total   Kazakh    MKM       Un-  Total    Kazakh   MKM      Un-    Total
                   Mining        allocated(2)         Mining        allocated           Mining      allocated
----------------------------------------------------------------------------------------------------------------------
Cash and cash     1,179.9    18.0    406.3  1,604.2     96.8   18.6     466.8  582.2     405.0  30.0    350.4    785.4
equivalents
Current investments 357.2       -        -    357.2    823.8      -         -  823.8   1,237.2     -        -  1,237.2
Borrowings              -  (305.5)  (270.0)  (575.5)       - (378.5)        - (378.5)        - (359.9)      -  (359.9)
Inter-segment           -    84.5    270.0    354.5        -  194.0         -  194.0         -   82.6       -     82.6
borrowings
Finance leases          -       -        -        -        -   (0.1)        -   (0.1)        -      -       -        -
----------------------------------------------------------------------------------------------------------------------
Net liquid 
funds/(debt)      1,537.1  (203.0)   406.3  1,740.4    920.6 (166.0)    466.8 1,221.4  1,642.2 (247.3)  350.4  1,745.3
----------------------------------------------------------------------------------------------------------------------
(1) Borrowings of MKM include amounts borrowed from the Kazakh Mining segment

(2) Unallocated borrowings include amounts borrowed by the corporate head office
functions from the Kazakh Mining segment.


(v) Capital expenditure, depreciation, write off/(back) of assets and impairment
losses by business segments

                      Six months ended       Six months ended          Year ended
                        30 June 2007           30 June 2006         31 December 2006
                     ---------------------------------------------------------------
$million           Kazakh     MKM      Un-    Total   Kazakh    MKM       Un-  Total    Kazakh   MKM      Un-    Total
                   Mining        allocated            Mining        allocated           Mining      allocated
----------------------------------------------------------------------------------------------------------------------
Property,           182.6     2.6      1.6    186.8    159.0    3.0       3.0 165.0      328.4   4.4      5.2    338.0
plant and
equipment
Mine                 11.6       -        -     11.6      5.9      -         -   5.9        6.7     -        -      6.7
stripping
costs
Intangible            7.3       -    478.4    485.7      0.7      -         -   0.7        8.8   0.2        -      9.0
assets
----------------------------------------------------------------------------------------------------------------------
Capital             201.5     2.6    480.0    684.1    165.6    3.0       3.0 171.6      343.9   4.6      5.2    353.7
expenditure
----------------------------------------------------------------------------------------------------------------------
Depreciation        101.8    11.1      0.5    113.4     91.4   10.4       0.1 101.9      200.8  21.8      0.4    223.0
and depletion
Amortisation          1.3     0.1        -      1.4      0.9    0.2         -   1.1        2.4   0.4        -      2.8
----------------------------------------------------------------------------------------------------------------------
Depreciation,       103.1    11.2      0.5    114.8     92.3   10.6       0.1 103.0      203.2  22.2      0.4    225.8
depletion and
amortisation
----------------------------------------------------------------------------------------------------------------------
Write off/            3.9     1.0        -      4.9     (7.0)    1.3        -  (5.7)       8.3   1.6        -      9.9
(back) of
assets and
impairment
losses
----------------------------------------------------------------------------------------------------------------------


(b) Revenues by product

$million                                               Six months   Six months         Year
                                                            ended        ended        ended
                                                          30 June      30 June  31 December
                                                             2007         2006         2006
-------------------------------------------------------------------------------------------
Kazakh Mining
Copper cathodes                                           1,406.9      1,060.2      2,389.0
Zinc concentrate                                            154.1         59.1        128.0
Copper rods                                                 117.7         98.6        196.1
Silver in granules                                           98.5        117.8        239.1
Zinc metal                                                   89.3        102.4        201.3
Gold bullion                                                 29.2         28.2         51.2
Other by-products                                            50.4         14.7         38.1
Other revenue                                                31.9         39.9         87.6
-------------------------------------------------------------------------------------------
                                                          1,978.0      1,520.9      3,330.4
-------------------------------------------------------------------------------------------
MKM
Wire                                                        385.1        416.5        925.8
Sheet steel and steel strips                                247.3        190.6        432.8
Tubes and bars                                              161.3        119.5        272.9
Metal trade                                                  17.6         32.3         84.6
-------------------------------------------------------------------------------------------
                                                            811.3        758.9      1,716.1
-------------------------------------------------------------------------------------------
Total revenues                                            2,789.3      2,279.8      5,046.5
-------------------------------------------------------------------------------------------


Provisional pricing

Almost all copper sales agreements provide for provisional pricing of sales in
the month of sale with final pricing settlement based on the average LME copper
price for the month following the sale.

For the six months ended 30 June 2007 gains of $70.3 million (30 June 2006:
$57.5 million, 31 December 2006: $49.8 million) relating to the difference
between provisional pricing and final pricing have been included within
revenues.

At 30 June 2007, copper sales totalling 7,423 tonnes (30 June 2006: 2,496
tonnes, 31 December 2006: 4,262 tonnes) remained to be finally priced and were
recorded at that date at an average price of $7,758 per tonne (30 June 2006:
$8,474 per tonne, 31 December 2006: $6,761 per tonne) based on provisional
invoices. The gain on sales contracts of $2.2 million arising in July 2007 and
relating to contracts previously priced in June 2007 will be recognised in the
second half of the year ending 31 December 2007.


(c) Revenues by destination

                                                                               Six months
                                                                                 ended 30
                                                                                June 2007
$million                                       Europe       China       Other       Total
-----------------------------------------------------------------------------------------
Sales to third parties                        1,565.4       867.3       356.6     2,789.3
-----------------------------------------------------------------------------------------

                                                                               Six months
                                                                                 ended 30
                                                                                June 2006
$million                                       Europe       China       Other       Total
-----------------------------------------------------------------------------------------
Sales to third parties                        1,659.2       302.5       318.1     2,279.8
-----------------------------------------------------------------------------------------

                                                                               Year ended
                                                                              31 December
                                                                                     2006
$million                                       Europe       China       Other       Total
-----------------------------------------------------------------------------------------
Sales to third parties                        3,770.1       641.8       634.6     5,046.5
-----------------------------------------------------------------------------------------


5. Write off/(back) of assets and impairment losses



$million                                              Six months   Six months          Year
                                                           ended        ended         ended
                                                         30 June      30 June   31 December
                                                            2007         2006          2006
-------------------------------------------------------------------------------------------
Write off/(back) of property, plant and equipment            3.8        (10.2)          1.4
Provisions against/(release of provisions for)               0.6         (1.2)          0.1
prepayments and other current assets
Release of impairment of investments                           -            -          (1.9)
Provisions against/(release of provisions for) trade         0.5          1.1          (8.3)
and other receivables
Provisions against obsolete inventories                        -          4.6          18.6
-------------------------------------------------------------------------------------------
                                                             4.9         (5.7)          9.9
-------------------------------------------------------------------------------------------


6. Finance income and finance costs

$million                                             Six months   Six months          Year
                                                          ended        ended         ended
                                                        30 June      30 June   31 December
                                                           2007         2006          2006
-------------------------------------------------------------------------------------------
Finance income:
Interest income                                            45.9         34.0          78.5
Foreign exchange gains                                     64.2         28.9         188.3
-------------------------------------------------------------------------------------------
Total finance income                                      110.1         62.9         266.8
-------------------------------------------------------------------------------------------
Finance costs:
Interest expense                                           (6.1)        (1.7)         (8.0)
Interest on employee obligations                           (1.7)        (1.0)         (3.0)
Unwinding of discount on provisions                        (2.9)        (2.6)         (4.2)
-------------------------------------------------------------------------------------------
Finance costs before foreign exchange losses              (10.7)        (5.3)        (15.2)
Foreign exchange losses                                  (116.9)       (92.7)       (161.9)
-------------------------------------------------------------------------------------------
Total finance costs                                      (127.6)       (98.0)       (177.1)
-------------------------------------------------------------------------------------------

7. Income tax
(a) Income tax expense

Major components of income tax expense for the periods presented are:

$million                                            Six months    Six months          Year
                                                         ended         ended         ended
                                                       30 June       30 June   31 December
                                                          2007          2006          2006
------------------------------------------------------------------------------------------
Current income tax
Corporate income tax - current period (UK)                12.8           0.2           5.2
Corporate income tax - current period (overseas)         336.4         281.0         653.5
Corporate income tax - prior periods                      (3.2)         15.0           0.4
Excess profits tax - current period                       29.9          24.3          77.3
Excess profits tax - prior periods                        (6.7)            -         (49.4)
------------------------------------------------------------------------------------------
                                                         369.2         320.5         687.0
------------------------------------------------------------------------------------------
Deferred income tax
Corporate income tax - current period                     15.7          (4.5)         63.0
Corporate income tax - prior periods                     (10.5)            -          17.1
Excess profits tax - current period                        9.9           1.0         (12.4)
------------------------------------------------------------------------------------------
                                                          15.1          (3.5)         67.7
------------------------------------------------------------------------------------------
Income tax expense                                       384.3         317.0         754.7
------------------------------------------------------------------------------------------




(b) Income tax reconciliation

The tax assessed on the profit for the period is higher than the standard rate
of corporation tax in the tax jurisdictions in which the Group operates.


A reconciliation of income tax expense applicable to accounting profit before
income tax at the statutory income tax rate to income tax expense at the Group's
effective income tax rate for the periods presented is as follows:

$million                                            Six months    Six months          Year
                                                         ended         ended         ended
                                                       30 June       30 June   31 December
                                                          2007          2006          2006
------------------------------------------------------------------------------------------
Profit before taxation                                 1,185.8         955.9       2,167.8
------------------------------------------------------------------------------------------
At statutory income tax rate of 30%                      355.7         286.8         650.3
(Over)/underprovided in previous years -                (10.5)             -          17.1
deferred income tax
(Over)/underprovided in previous years - current         (3.2)          15.0           0.4
income tax
Unrecognised tax losses                                      -           5.6          10.4
Effect of higher tax rate in Germany                       1.4           1.4           0.5
Unremitted overseas earnings                              20.0           6.8          91.8
Non deductible expenses/(non taxable income):
  Non taxable income on zinc plant                       (19.7)        (26.5)        (46.4)
  Recognition of negative goodwill                           -         (2.0)         (2.0)
  Non deductible expenses                                  7.5           4.6          17.1
Excess profits tax                                        33.1          25.3          15.5
------------------------------------------------------------------------------------------
At effective income tax rate of 32.4% (30 June           384.3         317.0         754.7
2006: 33.2%, 31 December 2006: 34.8%)
------------------------------------------------------------------------------------------


Corporate income tax is calculated at 30% of the assessable profit for the
period for the Company and Kazakhmys LLC. The MKM tax rate is calculated at
37.34% (30 June 2006: 35.98%, 31 December 2006: 35.98%) and relates to German
corporate income tax and trade tax.

Excess profits tax is levied on profitable subsoil contracts where the
cumulative internal rate of return exceeds 20% in a given period. The effective
rate for excess profits tax for those subsoil contracts liable to this tax is
15% (30 June 2006: 8%, 31 December 2006: 13%).




8. Earnings per share
(a) Basic and diluted EPS

Basic EPS is calculated by dividing profit for the period attributable to equity
shareholders of the Company by the weighted average number of ordinary shares of
20 pence each outstanding during the period. The Company has no dilutive
potential ordinary shares.


The following reflects the income and share data used in the EPS computations.

$million                                             Six months    Six months          Year
                                                          ended         ended         ended
                                                        30 June       30 June   31 December
                                                           2007          2006          2006
-------------------------------------------------------------------------------------------
Net profit attributable to equity shareholders of         794.2         632.7       1,399.7
the Company
-------------------------------------------------------------------------------------------

Number (unless otherwise stated)                     Six months    Six months          Year
                                                          ended         ended         ended
                                                        30 June       30 June   31 December
                                                           2007          2006          2006
-------------------------------------------------------------------------------------------
Number of shares
Weighted average number of ordinary shares of 20    467,474,200   467,474,200   467,474,200
pence each for EPS calculation
-------------------------------------------------------------------------------------------
EPS - basic and diluted ($)                                1.70          1.35          2.99
-------------------------------------------------------------------------------------------


(b) EPS based on Underlying Profit

The Group's Underlying Profit is the profit for the period after adding back
items which are non-recurring or variable in nature, which do not
impact the underlying trading performance of the business and their resultant
tax and minority interest effects, is shown in the table below. EPS based on
Underlying Profit is calculated by dividing Underlying Profit by the weighted
average number of ordinary shares of 20 pence each outstanding during the
period. The Directors believe EPS based on Underlying Profit provides a more
consistent measure for comparing the underlying trading performance of the
Group.

The following shows the reconciliation of Underlying Profit from the reported
profit and the share data used in the computations for EPS based on Underlying
Profit:


$million                                               Six months   Six months         Year
                                                            ended        ended        ended
                                                          30 June      30 June  31 December
                                                             2007         2006         2006
-------------------------------------------------------------------------------------------
Net profit attributable to equity shareholders of the       794.2        632.7      1,399.7
Company
Special items:
  Recognition of negative goodwill                              -        (6.5)        (6.5)
  Write off/(back) of property, plant and equipment           1.8       (10.2)          1.4
  Loss on disposal of property, plant and equipment             -          4.0          9.6
Tax effect of non-recurring items                           (0.3)        (0.8)        (1.5)
Minority interest effect of non-recurring items               0.1          0.1            -
-------------------------------------------------------------------------------------------
Underlying Profit                                           799.6        619.3      1,402.7
-------------------------------------------------------------------------------------------

Number (unless otherwise stated)                       Six months   Six months         Year
                                                            ended        ended        ended
                                                          30 June      30 June  31 December
                                                             2007         2006         2006
-------------------------------------------------------------------------------------------
Weighted average number of ordinary shares of 20      467,474,200  467,474,200  467,474,200
pence each for EPS based
on Underlying Profit calculation
-------------------------------------------------------------------------------------------
EPS based on Underlying Profit - basic and diluted ($)       1.71         1.32         3.00
-------------------------------------------------------------------------------------------


9. Dividends paid and proposed

The dividends declared and paid during the six months ended 30 June 2007 and
2006, and the year ended 31 December 2006 are as follows:


Dividends declared by the Company during reporting periods

                                                                  Per share     Amount
                                                                   US cents   $million
--------------------------------------------------------------------------------------
Six months ended 30 June 2007
Final dividend in respect of year ended 31 December 2006 (sourced     25.7      120.1
from 2006 earnings)
--------------------------------------------------------------------------------------
Six months ended 30 June 2006
Final dividend in respect of year ended 31 December 2005 (sourced     36.0      168.3
from 2005 earnings)
--------------------------------------------------------------------------------------
Year ended 31 December 2006
Final dividend in respect of year ended 31 December 2005 (sourced     36.0      168.3
from 2005 earnings)
--------------------------------------------------------------------------------------
Interim dividend in respect of year ended 31 December 2006 (sourced   12.8      59.8
from 2006 earnings)
--------------------------------------------------------------------------------------
                                                                      48.8      228.1
--------------------------------------------------------------------------------------

Dividends declared by the Company after period end
                                                                  Per share     Amount
                                                                   US cents   $million
--------------------------------------------------------------------------------------
Declared by Directors on 3 September 2007 (not recognised as a
liability as at 30 June 2007)
  Interim dividend in respect of year ended 31 December 2007 (1)       13.6      63.9
  Special dividend in respect of year ended 31 December 2007 (1)       50.0      235.0
--------------------------------------------------------------------------------------
                                                                       63.6      298.9
--------------------------------------------------------------------------------------

(1) Based on the number of ordinary shares in issue of 470,033,865 following the
issue of ordinary shares in consideration for the transfer of additional units
in Kazakhmys LLC previously owned by minority shareholders (see note 19(b)).


10. Intangible assets

During the six months ended 30 June 2007, the Group acquired licences totalling
$485.3 million (30 June 2006: $6.5 million, 31 December 2006: $8.8 million).
Included within this amount is $450.0 million in relation to the purchase of
Dostan-Temir LLP and the related oil and gas licence, which together have been 
treated as an asset acquisition. Of the $485.3 million, $33.9 million was 
capitalised by Group in respect of contractual reimbursements to the Government 
for geological information and investments made to society (30 June 2006: $5.9 million, 
31 December 2006: $8.6 million). These latter amounts are non-cash items and are
recorded within provisions for payments of licences. In addition to the above,
during the six months ended 30 June 2007 intangible assets:

   • increased by $1.1 million as a result of foreign exchange movements on
     translation;
   • increased by $0.4 million as a result of other intangible asset
     acquisitions; and
   • decreased by $1.4 million as a result of the amortisation expense.



11. Property, plant and equipment

During the six months ended 30 June 2007, the Group acquired property, plant and
equipment with a cost of $186.8 million (30 June 2006: $165.0 million, 31
December 2006: $338.0 million), of which $115.8 million related to new and
expansionary projects (30 June 2006: $95.4 million, 31 December 2006: $260.1
million).

Assets with a book value of $4.2 million were disposed of by the Group during
the six months ended 30 June 2007 (30 June 2006: $4.1 million, 31 December 2006:
$13.0 million) resulting in a loss on disposal of $1.8 million (30 June 2006:
$4.0 million, 31 December 2006: $9.6 million).

In addition to the above additions and disposals, during the six months ended 30
June 2007 property, plant and equipment:

   • increased by $69.0 million as a result of foreign exchange movements on
     translation;
   • decreased by $3.8 million as a result of write offs; and
   • decreased by $109.8 million as a result of the depreciation expense.


12. Current investments

Current investments include bank deposits of $357.2 million (30 June 2006:
$823.8 million, 31 December 2006: $1,186.7 million) with a maturity at inception
of greater than three months, and assets held for trading of $nil (30 June 2006:
$nil, 31 December 2006: $50.5 million). Bank deposits are held with major
Kazakhstan banks and local branches of international financial institutions.


13. Cash and cash equivalents

$million                                                   As at      As at       As at
                                                         30 June    30 June 31 December
                                                            2007       2006        2006
---------------------------------------------------------------------------------------
Cash deposits with maturities of less than three months  1,477.0      435.4       647.3
Cash at bank                                               126.8      146.6       137.8
Petty cash                                                   0.4        0.2         0.3
---------------------------------------------------------------------------------------
                                                         1,604.2      582.2       785.4
---------------------------------------------------------------------------------------

Cash deposits are principally held with major western European and U.S. financial
institutions and their triple A rated managed liquidity funds.


14. Share capital and reserves

(a) Authorised and allotted share capital

                                                                Number £ million  $ million
-------------------------------------------------------------------------------------------
At 30 June 2007, 30 June 2006 and 31 December 2006
Authorised share capital - ordinary shares of 20 pence     750,000,000     150.0         -
each
-------------------------------------------------------------------------------------------
Allotted and called up share capital                       467,474,200      93.5     173.3
-------------------------------------------------------------------------------------------

(b) Reserves

(i) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of Kazakhmys LLC and
MKM into US dollars.


(ii) Reserve fund

In accordance with legislation of the Republic of Kazakhstan the reserve fund
comprises prescribed transfers from retained earnings amounting to 15% of
Kazakhmys LLC's charter capital. During the six months ended 30 June 2006, the
reserve fund was increased by $28.2 million as a result of the contributions to
charter capital of Kazakhmys LLC (see Note 14(c)).


(c) Capital contributions to charter capital of Kazakhmys LLC

Between 31 January 2006 and 14 March 2006, the Company made capital
contributions of $186.8 million to its subsidiary, Kazakhmys LLC. Minority
shareholders contributed a further $1.6 million to the charter capital. As the
Company took up the rights of minority shareholders who did not subscribe to the
initial capital contribution, the Company's share in Kazakhmys LLC increased
from 98.68% at 31 December 2005 to 99.08% at 30 June 2006, 31 December 2006 and
30 June 2007.


15. Borrowings

In May 2006, MKM entered into a loan credit agreement with Deutsche Bank for a
long-term loan of €230 million to repay borrowings from Dresden Bank and
intercompany balances due to Kazakhmys LLC, and for general working capital
purposes. The interest payable is EURIBOR + 1.45%. The Deutsche Bank loan is
secured over the inventories and receivables of MKM. At 30 June 2007, the amount
of inventories and receivables of MKM held as security for the borrowings was
$223.6 million and $196.0 million (30 June 2006: $199.5 million and $188.2
million, 31 December 2006: $240.9 million and $154.2 million) respectively.
Kazakhmys LLC acts as guarantor of the loan.



16. Reconciliation of profit before taxation to net cash inflow from operating
activities

$million                                             Six months   Six months         Year
                                                          ended        ended        ended
                                                        30 June      30 June  31 December
                                                           2007         2006         2006
-----------------------------------------------------------------------------------------
Profit before taxation                                  1,185.8        955.9      2,167.8
Interest income                                           (45.9)       (34.0)       (78.5)
Interest expense                                            6.1          1.7          8.0
Depreciation and depletion                                113.4        101.9        223.0
Amortisation                                                1.4          1.1          2.8
Recognition of negative goodwill                              -         (6.5)        (6.5)
Write off/(back) of assets and impairment losses            4.9         (5.7)         9.9
Unrealised foreign exchange loss/(gain)                    37.2         46.5        (39.2)
Gain on disposal of assets held for trading                (0.5)           -            -
Loss on disposal of property, plant and equipment           1.8          4.0          9.6
-----------------------------------------------------------------------------------------
Operating cash flows before changes in working          1,304.2      1,064.9      2,296.9
capital and provisions
Decrease/(increase) in inventories                         68.6       (123.0)      (339.2)
Increase in prepayments and other current assets          (35.9)       (32.7)       (64.8)
Increase in trade and other receivables                   (63.6)        (7.3)       (11.1)
Increase in employee benefits                               2.8          0.7          2.3
Increase/(decrease) in provisions                           1.3         (9.5)         2.1
(Decrease)/increase in trade and other payables          (145.9)       (25.2)       156.1
-----------------------------------------------------------------------------------------
Cash inflow before interest and income tax paid         1,131.5        867.9      2,042.3
Interest paid                                              (6.2)        (0.2)        (6.8)
Income tax paid                                          (427.1)      (169.2)      (623.3)
-----------------------------------------------------------------------------------------
Net cash inflow from operating activities                 698.2        698.5      1,412.2
-----------------------------------------------------------------------------------------




17. Movement in net liquid funds

                                                                           
                                            At                     Net      Other         At
                                     1 January                exchange   non-cash    30 June
$million                                  2007  Cash flow  translation  movements(1)    2007
--------------------------------------------------------------------------------------------
Cash and cash equivalents                785.4     810.4           8.4         -     1,604.2
Current investments                    1,237.2    (885.6)         47.2     (41.6)      357.2
Borrowings                              (277.3)     58.7          (2.4)        -      (221.0)
--------------------------------------------------------------------------------------------
Net liquid funds                       1,745.3     (16.5)         53.2     (41.6)    1,740.4
--------------------------------------------------------------------------------------------
                                                            
                                            At                     Net      Other         At
                                     1 January                exchange   non-cash    30 June
$million                                  2006  Cash flow  translation  movements(1)    2006
--------------------------------------------------------------------------------------------
Cash and cash equivalents                522.0       81.0        (20.8)         -      582.2
Current investments                      356.5      446.2         73.2      (52.1)     823.8
Borrowings                               (48.8)    (125.7)       (10.8)       0.8     (184.5)
Finance leases                            (0.2)       0.1            -          -       (0.1)
--------------------------------------------------------------------------------------------
Net liquid funds                         829.5      401.6         41.6      (51.3)   1,221.4
--------------------------------------------------------------------------------------------

                                                           
                                            At                     Net      Other           At
                                     1 January                exchange   non-cash  31 December
$million                                  2006  Cash flow  translation  movements(1)      2006
----------------------------------------------------------------------------------------------
Cash and cash equivalents                522.0      287.7        (24.3)         -        785.4
Current investments                      356.5      834.5         12.8       33.4      1,237.2
Borrowings                              (48.8)     (208.2)       (13.8)      (6.5)      (277.3)
Finance leases                           (0.2)        0.2            -          -            -
----------------------------------------------------------------------------------------------
Net liquid funds                         829.5      914.2        (25.3)      26.9      1,745.3
----------------------------------------------------------------------------------------------

(1) Other non-cash movements comprise foreign exchange losses/gains incurred by
the Company's subsidiaries and recognised in the consolidated income statement.



18. Related party disclosures
(a) Transactions with related parties

Transactions between the Company and its subsidiaries, which are related parties
of the Company, have been eliminated on consolidation.

The Group operates a number of companies under trust management agreements with
local and state authorities. The activities include heating distribution
systems, road maintenance and aviation services. The purpose of these agreements
is to provide public and social services without any material financial benefit
for the Group. Transactions between the Group and these companies are conducted
on an arm's length basis. The volume and quantities of these transactions
between the Group and the other related parties are not significant.

(b) Option agreement with Executive Chairman

On 14 March 2006, the Company announced that an entity wholly owned by the
Company's Executive Chairman, Vladimir Kim, had agreed to acquire a 25% stake in
ENRC Kazakhstan Holding B.V. (EKH), the holding company for certain assets of
the Eurasia Natural Resources group's metals and mining business. EKH primarily
operates in Kazakhstan producing, in particular, chrome, iron ore and alumina.
Following the completion of a subsequent restructuring of the EKH group of
companies, a new entity ultimately wholly owned by Vladimir Kim, is now the
direct holder of an 18.8% interest in the issued share capital of Eurasian
Natural Resource Corporation PLC (ENRC), representing the original 25% stake in
EKH. The Company has been given the benefit of a call option in respect of
Vladimir Kim's shareholding in ENRC. The terms of the call option allow the
Company, at its absolute discretion, from 1 January 2007 to and until 31
December 2007, to call for Vladimir Kim's interest in ENRC to be transferred to
the Company for a consideration representing 100% of the initial investment of
$751 million plus a 10% margin (reflecting the risk of the initial investment)
and the actual financing and transaction costs incurred by Vladimir Kim less any
dividends paid to Vladimir Kim as a result of holding the stake. This is
provided that, as required by the Listing Rules, this consideration and the
terms of the option are determined by an independent adviser to be fair and
reasonable so far as the remaining shareholders of the Company are concerned.
Vladimir Kim is not permitted to dispose of his interest in ENRC before 1
January 2008 without the consent of the Company. The proposed exercise of the
call option will comply with all class tests and related party rules relevant to
the Company.

The accounting treatment of the option is governed by IAS 39 'Financial
Instruments: Recognition and Measurement'. IAS 39 contains special accounting
requirements for those equity instruments that do not have a quoted market price
in an active market and derivatives that are linked to, and must be settled by
delivery of, such unquoted equity instruments. If the fair value of such equity
instruments cannot be reliably measured, they must be measured at cost, less
impairment. To be able to reliably measure the option, the variability in the
range of fair value estimates should not be significant, and the probabilities
of the various estimates within the range should be capable of being reasonably
assessed. There currently remain significant differences in the fair value
estimates being obtained for ENRC from external advisers and those estimated by
other parties, and the probability of each value cannot be reasonably assessed.
The Directors have therefore considered the requirements of IAS 39 in this
regard and are of the view that the fair value cannot be reliably measured on
the basis that, to-date, insufficient information on ENRC's financial
performance, position and cash flows has been made available to the Company in
order to arrive at a reliable valuation of the option as construed by IAS 39.
Consequently the option is valued at cost, which is nil, due to the fact that no
payment was made by the Company to enter into the option with Vladimir Kim.


19. Events after the balance sheet date

(a) Business acquisition

On 5 July 2007 the Group acquired 96.34% of the ordinary shares of Eurasia Gold
Inc. (Eurasia Gold) a company listed on the Toronto Stock Exchange. Since the
offer was accepted by holders of more than 90% of the Eurasia Gold shares,
Kazakhmys Gold Inc., an indirectly wholly owned subsidiary of Kazakhmys PLC, is
now exercising its right under the compulsory acquisition provisions of the
Business Corporations Act (British Columbia) to acquire all outstanding Eurasia
Gold shares not already owned by Kazakhmys Gold Inc. at the same price of
CA$0.85 for each Eurasia Gold share. The principal activity of Eurasia Gold and
its subsidiaries is the mining and processing of gold ore into refined ore.


Eurasia Gold was purchased for a consideration of $260.1 million. The Group will
finalise the determination of fair values of the purchased company by 31
December 2007 due to the timing of the acquisition. At the acquisition date, the
net identifiable assets and liabilities of Eurasia Gold, including preliminary
fair value adjustments, were as follows:



                                                         Carrying
                                                            value  Preliminary    Preliminary
                                                   at acquisition   fair value  fair value at
$million                                                     date  adjustments    acquisition(1)
------------------------------------------------------------------------------------------------
Assets
Property, plant and equipment (2)                            16.2        230.8          247.0
Other assets (including intangible assets) (2)                2.0         (1.2)           0.8
Inventories (3)                                              11.2          4.2           15.4
Trade and other receivables                                   9.0            -            9.0
Cash and cash equivalents                                    11.6            -           11.6
Liabilities
Deferred tax liabilities (4)                                    -        (47.7)         (47.7)
Provisions                                                   (1.2)           -           (1.2)
Loans and borrowings                                         (9.2)         3.3           (5.9)
Trade and other payables                                     (4.0)           -           (4.0)
----------------------------------------------------------------------------------------------
Net identifiable assets                                      35.6        189.4          225.0
----------------------------------------------------------------------------------------------
96.34% share of the fair value of net assets acquired                                   216.8
Goodwill arising on purchase of 96.34% interest (5)                                      43.3
----------------------------------------------------------------------------------------------
Purchase consideration paid                                                             260.1
----------------------------------------------------------------------------------------------

(1) Fair values at acquisition will be finalised by 31 December 2007.

(2) Fair value adjustments have been made to reflect initial estimates of the fair
values of land and buildings, plant and machinery, reserves and resources and
other exploration and development projects.

(3) Inventories have been revalued to their net realisable value.

(4) The increase in the deferred tax liability largely reflects the tax effect of
the fair value adjustments.

(5) Goodwill has been recognised as a consequence of the requirement to recognise
a deferred tax liability on the fair value adjustments.


(b) Purchase of Kazakhmys LLC minority share

The Company is due to issue 2,559,665 ordinary shares of 20 pence each and has
paid $11.5 million in consideration for the transfer to it of 227,959,211 units
in Kazakhmys LLC previously owned by minority shareholders. As result of this,
the Company's interest in Kazakhmys LLC will increase from 99.08% as at 30 June
2007 to 99.73% and the allotted and called up share capital of the Company will
increase from 467,474,200 to 470,033,865 ordinary shares of 20 pence each.


(c) Exercise of option agreement with Executive Chairman

On 3 September 2007, the independent Directors of the Board approved an
announcement setting out their decision to exercise the call option over
Vladimir Kim's 18.8% interest in Eurasian Natural Resources Corporation PLC for
an estimated cost of $810 million. This is subject to the approvals of the
Government of Kazakhstan and the independent shareholders of the Company.

(d) Interim dividend

On 3 September 2007 the Directors declared an interim dividend in respect of the
year ended 31 December 2007 of 13.6 US cents per ordinary share together with a
special dividend of 50.0 US cents per ordinary share. The interim and special
dividends will be paid together on 5 October 2007 to shareholders on the
register as at 14 September 2007. For those shareholders who have elected to
receive their dividends in sterling, the currency conversion rate to convert the
dividend into UK pounds sterling will be £0.4970 to the US dollar. This is based
on the average exchange rates for the five business days ending two days before the
date of the interim results announcement.



PRODUCTION AND SALES FIGURES

Six months ended 30 June 2007


1. Summary of significant production and sales figures

                                                                        30 June    30 June
kt (unless otherwise stated)                                               2007       2006
------------------------------------------------------------------------------------------
Kazakh Mining:
Ore mined                                                                17,994     20,127
Copper content in ore mined (%)                                            1.21       1.10
------------------------------------------------------------------------------------------
Copper cathode production:
  From own concentrate                                                      163        169
  From purchased concentrate                                                 27         18
------------------------------------------------------------------------------------------
Total copper cathodes produced (excluding tolling)                          190        187
Tolling                                                                       1          1
------------------------------------------------------------------------------------------
Total copper cathodes produced (including tolling)                          191        188
------------------------------------------------------------------------------------------
Total copper cathodes and copper rods sold                                  220        178
------------------------------------------------------------------------------------------
MKM:
Wire sales                                                                   79         82
Flat sales                                                                   34         31
Tubes and bars sales                                                         23         21
------------------------------------------------------------------------------------------
Total MKM sales                                                             136        134
------------------------------------------------------------------------------------------

2. Mining

Metal Mining

                             Ore        Copper        Zinc          Gold         Silver
                           mined
------------------------------------------------------------------------------------------
                              30     30     30    30    30     30     30      30     30    30
                            June   June   June  June   June  June   June    June   June  June
                            2007   2006   2007  2006  2007   2006   2007    2006   2007   2006
                              kt     kt      %     %     %      %    g/t     g/t    g/t    g/t
----------------------------------------------------------------------------------------------
Zhezkazgan Complex:
North                      1,344  1,620  0.66   0.67     -      -      -      -   8.66   7.31
South                      3,137  3,434  0.69   0.73     -      -      -      -  17.50  12.82
Stepnoy                    1,447  1,693  0.80   0.79     -      -      -      -  12.01  17.42
East                       2,753  2,886  0.81   0.91     -      -      -      -  17.06  20.04
West                       1,047  1,386  0.37   0.40     -      -      -      -  10.92  12.93
Annensky                   1,649  2,435  1.04   1.13     -      -      -      -  25.60  22.17
Zhaman-Aybat               1,439    596  1.30   1.11     -      -      -      -   9.08   5.46
---------------------------------------------------------------------------------------------
Total Zhezkazgan Complex  12,816 14,050  0.81   0.82     -      -      -      -  15.42  15.54
---------------------------------------------------------------------------------------------
Balkhash Complex: 
Kounrad                      178  1,175  0.31   0.34     -      -      -      -   0.80   1.89
Shatyrkul                    213    244  2.22   2.04     -      -   0.29   0.29   1.90   2.48
Sayak I and Sayak III        702    867  1.05   1.12     -      -   0.27   0.25   5.44   5.95
---------------------------------------------------------------------------------------------
Total Balkhash Complex     1,093  2,286  1.15   0.82     -      -   0.27(1)0.26(1)4.00   3.49
---------------------------------------------------------------------------------------------
East Region:
Orlovskoe                    618    833  4.61   4.28  4.23   3.90   0.57  0.57   54.40  54.47
Belousovskoe                  72    132  0.83   0.91  2.84   3.26   0.48  0.50   43.00  49.85
Irtyshskoe                   202    252  1.33   1.19  3.07   2.63   0.36  0.29   53.10  40.02
Nikolaevskoe                 275    380  1.72   1.06  3.05   2.07   0.61  0.21   29.89  22.04
Yubileyno-Snegirikhinskoe    203    189  3.09   4.32  3.23   3.17   0.62  0.57   42.86  42.74
Artemyevskoe                 803    532  1.71   1.68  5.44   6.85   1.49  1.75  109.06 161.32
---------------------------------------------------------------------------------------------
Total East region          2,173  2,318  2.60   2.63  4.28   4.04   0.89  0.75   69.90  70.90
---------------------------------------------------------------------------------------------
Karaganda Region:
Abyz                           -    184     -   1.68  -      3.47      -  3.71       -  47.65
Nurkazgan                  1,106  1,023  1.17   1.22  -         -   0.31  0.31    2.65   3.76
Kosmurun                     806    266  4.00   4.29  2.10      -   1.63  1.53   28.17  22.70
---------------------------------------------------------------------------------------------
Total Karaganda Region     1,912  1,473  2.36   1.83  2.10(2)3.47(4)0.86  0.96   13.41  12.67
---------------------------------------------------------------------------------------------
Total Kazakh Mining       17,994 20,127  1.21   1.10  3.69(3)4.00(5)0.77  0.70(6)21.09  20.34
---------------------------------------------------------------------------------------------


(1) Production only from Shatyrkul and Sayak I and Sayak III mines in Balkhash Complex.

(2) Production only from Kosmurun mine.

(3) Production only from East Region and Kosmurun mine of Karaganda Region.

(4) Production only from Abyz mine.

(5) Production only from East Region and Abyz mine of Karaganda Region.

(6) Production only from Balkhash Complex (excluding Kounrad mine), East Region
and Karaganda Region.



Coal Mining

                                      Coal              Waste              Strip
                                     mined           stripped              ratio
                                  --------------------------------------------------------
                                   30 June  30 June   30 June  30 June   30 June  30 June
kt                                    2007     2006      2007     2006      2007     2006
-----------------------------------------------------------------------------------------
Molodezhnoe                          3,217    3,231     5,822    4,699      1.81     1.45
Kuu-Chekinskoe                         429      500     1,917    2,048      4.47     4.09
-----------------------------------------------------------------------------------------
Total                                3,646    3,731     7,739    6,747      2.12     1.81
-----------------------------------------------------------------------------------------


3. Processing

Copper processing

                                                    Copper               Copper
                                               concentrate                   in
                                                  produced          concentrate
                                            --------------------------------------------
                                                   30 June  30 June     30 June  30 June
                                                      2007     2006        2007     2006
                                                        kt       kt           %        %
----------------------------------------------------------------------------------------
Zhezkazgan Complex:
Zhezkazgan No.1                                        100       90        40.3     39.6
Zhezkazgan No.2                                         89      104        39.3     39.5
Satpayev                                                58       86        30.5     28.0
----------------------------------------------------------------------------------------
Total Zhezkazgan Complex                               247      280        37.7     36.0
-----------------------------------------------------------------------------------------
Balkhash Complex:
Balkhash                                                92      133        17.2     18.3
----------------------------------------------------------------------------------------
Total Balkhash Complex                                  92      133        17.2     18.3
----------------------------------------------------------------------------------------
East Region:
Orlovskoe                                              128      160        20.6     20.1
Belousovskoe                                            10        6        16.6     13.5
Irtyshskoe                                              14       13        15.8     13.4
Nikolaevskoe                                            79       81        17.0     16.0
----------------------------------------------------------------------------------------
Total East Region                                      231      260        18.9     18.4
----------------------------------------------------------------------------------------
Karaganda Region:
Karagaily (Abyz)                                         -       44           -      3.8
Karagaily (Kosmurun)                                   159       27        15.5     17.3
----------------------------------------------------------------------------------------
Total Karaganda Region                                 159       71        15.5      9.0
----------------------------------------------------------------------------------------
Own copper concentrate processed by third               21       17        26.2     24.2
party
----------------------------------------------------------------------------------------
Total Kazakh Mining (own concentrate)                  750      761        24.4     24.1
----------------------------------------------------------------------------------------
Purchased concentrate                                   73       91        25.7     21.0
----------------------------------------------------------------------------------------
Total Kazakh Mining (own and purchased                 823      852        24.5     23.8
concentrate)
----------------------------------------------------------------------------------------




4. Zinc and precious metals processing

                                 Zinc              Zinc          Silver(1)           Gold(1)
                          concentrate                in
                             produced       concentrate       
                           -------------------------------------------------------------------------
                              30 June  30 June  30 June   30 June  30 June  30 June  30 June 30 June 
                                 2007     2006     2007      2006     2007     2006     2007    2006
                                   kt       kt        %         %      g/t      g/t      g/t     g/t
----------------------------------------------------------------------------------------------------
Zhezkazgan Complex:
Zhezkazgan No.1                     -        -        -         -    715.1    776.6       -       -
Zhezkazgan No.2                     -        -        -         -    705.8    701.3       -       -
Satpayev                            -        -        -         -    733.1    576.9       -       -
----------------------------------------------------------------------------------------------------
Total Zhezkazgan Complex            -        -        -         -    715.9    687.5       -       -
----------------------------------------------------------------------------------------------------
Balkhash Complex:
Balkhash                            -        -        -         -     63.0     54.4     2.5     2.8
----------------------------------------------------------------------------------------------------
Total Balkhash Complex              -        -        -         -     63.0     54.4     2.5     2.8
----------------------------------------------------------------------------------------------------
East Region:
Orlovskoe                          42       51     45.3      45.0    105.8    106.7     1.2     1.2
Belousovskoe                        5        7     41.4      43.9    223.2    590.8     3.3     5.7
Irtyshskoe                          8        7     36.0      38.4    557.3    422.9     2.4     2.3
Nikolaevskoe                       38       28     41.9      40.9    207.1    137.2     2.5     1.4
Artemyevskoe (KazZinc)             59       56     53.0      51.7  2,479.2  2,697.5    13.9    14.5
----------------------------------------------------------------------------------------------------
Total East Region                 152      149     46.8(2)   44.1(2) 172.7(2) 143.2(2)  1.8(2)  1.4(2)
----------------------------------------------------------------------------------------------------
Karaganda Region:
Karagaily                           -        5        -      33.8     84.9    124.7    3.6     8.4
----------------------------------------------------------------------------------------------------
Total Karaganda Region              -        5        -      33.8     84.9    124.7    3.6     8.4
----------------------------------------------------------------------------------------------------
Total Kazakh Mining               152      154     46.8      45.8    323.7    330.5    2.5     2.9
----------------------------------------------------------------------------------------------------

(1) Grade in grams per tonne of copper concentrate

(2) Production from own concentrators.



5. Copper Smelter/Refinery - copper cathodes production

                                 Concentrate            Copper in           Copper
                                     smelted          concentrate         cathodes
                            --------------------------------------------------------------
                                     30 June  30 June     30 June 30 June  30 June 30 June
                                        2007     2006        2007    2006     2007    2006
                                          kt       kt           %       %       kt      kt
------------------------------------------------------------------------------------------
Zhezkazgan Complex:
Own concentrate                          282      329        35.6    33.0       90     102
Purchased concentrate                      6        9        32.9    26.8        4       3
Other (1)                                  4        3        30.4    35.8        -       1
------------------------------------------------------------------------------------------
Total Zhezkazgan Complex                 292      341        35.5    32.9       94     106
------------------------------------------------------------------------------------------
Balkhash Complex:
Own concentrate                          453      461        18.0    16.6       73      65
Purchased concentrate                     94       83        24.9    20.1       23      15
Other (1)                                  2       22        68.7     6.3        -       1
------------------------------------------------------------------------------------------
Total Balkhash Complex                   549      566        19.3    16.7       96      81
------------------------------------------------------------------------------------------
Total Kazakh Mining (excluding           841      907        24.9    22.8      190     187
tolling)
------------------------------------------------------------------------------------------
Tolling                                    1        1        58.9    74.2        1       1
------------------------------------------------------------------------------------------
Total Kazakh Mining (including           842      908        23.9    22.3      191     188
tolling)
------------------------------------------------------------------------------------------

(1) Includes materials recovered (slag, scrap, etc.) reprocessed at both
Zhezkazgan and Balkhash Complexes.




6. Copper Smelter/Refinery - copper rod and acid production

                                                      Copper                Acid
                                                         rod          production
                                     ----------------------------------------------------
                                                     30 June  30 June    30 June  30 June
kt                                                      2007     2006       2007     2006
-----------------------------------------------------------------------------------------
Total Kazakh Mining (all Zhezkazgan Complex)              18       14         81      106
-----------------------------------------------------------------------------------------


7. Zinc Smelter/Refinery - zinc metal production

                                        Zinc              Zinc in              Zinc
                                 concentrate          concentrate             metal
                                     smelted
                                     ----------------------------------------------------
                                     30 June  30 June     30 June  30 June  30 June 30 June
                                        2007     2006        2007     2006     2007    2006
                                          kt       kt           %        %       kt      kt
-------------------------------------------------------------------------------------------
Total Kazakh Mining (all                  76       85        34.1     45.7       27      34
Balkhash Complex)
-------------------------------------------------------------------------------------------


8. Precious metal production

                                                      Silver                Gold
                                     ----------------------------------------------------
                                                     30 June   30 June   30 June   30 June
koz                                                     2007      2006      2007      2006
------------------------------------------------------------------------------------------
Kazakh Mining                                         10,104    10,660        52        54
Tolling                                                    7        32        19        24
------------------------------------------------------------------------------------------
Total Kazakh Mining (including tolling)               10,111    10,692        71        78
------------------------------------------------------------------------------------------


9. Other production - Kazakh Mining

                                                                      30 June     30 June
                                                                         2007        2006
-----------------------------------------------------------------------------------------
Electricity power space (GWh)                                           3,203       3,358
Heating power (KGcal)                                                   2,488       2,431
Enamel wire (t)                                                           440         195
Lead dust (t)                                                           5,428       7,236
-----------------------------------------------------------------------------------------




10. Kazakh Mining sales

                                                     30 June             30 June
                                                        2007                2006
-----------------------------------------------------------------------------------------
                                                        kt(1) $million     kt(1) $million
-----------------------------------------------------------------------------------------
Copper cathode                                           203   1,406.9       163   1,060.2
Copper rod                                                17     117.7        15      98.6
------------------------------------------------------------------------------------------
Total copper sales                                       220   1,524.6       178   1,158.8
------------------------------------------------------------------------------------------
Zinc concentrate                                         132     154.1        81      59.1
Zinc metal                                                25      89.3        37     102.4
Silver (koz)                                           7,395      98.5    10,835     117.8
Gold (koz)                                                45      29.2        47      28.2
------------------------------------------------------------------------------------------

(1) Kilotonne (unless otherwise stated).



11. Average realised prices

                                                                      30 June     30 June
                                                                         2007        2006
-----------------------------------------------------------------------------------------
Copper ($/t)                                                            6,930       6,510
Zinc ($/t)                                                              3,572       2,768
Silver ($/oz)                                                           13.32       10.87
Gold ($/oz)                                                               649         600
-----------------------------------------------------------------------------------------


12. MKM production and sales

                                              30 June 2007               30 June 2006
                            --------------------------------------------------------------
kt                                              Production     Sales  Production     Sales
------------------------------------------------------------------------------------------
Wire rod                                                60        59          62        62
Drawn wire                                              20        20          20        20
------------------------------------------------------------------------------------------
Total wire                                              80        79          82        82
------------------------------------------------------------------------------------------
Pre-rolled                                               2         2           1         1
Sheets                                                   7         7           8         7
Strips                                                  25        25          23        23
------------------------------------------------------------------------------------------
Total flat                                              34        34          32        31
------------------------------------------------------------------------------------------
Tubes                                                   10        10          10        10
Bars                                                    13        13          11        11
------------------------------------------------------------------------------------------
Total tubes and bars                                    23        23          21        21
------------------------------------------------------------------------------------------
Total MKM                                              137       136         135       134
------------------------------------------------------------------------------------------




GLOSSARY


Capital Employed
The aggregate of equity attributable to shareholders, minority interests and
borrowings


Cash cost of copper after by-products
The US cents per pound cost of copper after revenues arising from by-products


CIS
Commonwealth of Independent States


Dollar or $
United States dollars, the currency of the United States of America


EBITDA
Earnings before interest, tax, depreciation and amortisation


EPS
Earnings per share


EPS based on Underlying Profit
Earnings per share based on Underlying Profit is calculated by dividing
Underlying Profit by the weighted average number of ordinary shares of 20 pence
each outstanding during the year


EPT
Excess profits tax


ENRC
Eurasian Natural Resources Corporation PLC


EURIBOR
European Inter Bank Offer Rate


Free Cash Flow
Net cash flows from operating activities less sustaining capital expenditure on
tangible and intangible assets and investment in mine stripping costs


g/t
grammes per metric tonne


GWh
Gigawatt-hour, one gigawatt-hour represents one hour of electricity consumed at
a constant rate of one gigawatt


Government
The Government of the Republic of Kazakhstan


IAS
International Accounting Standards


JORC
Joint Ore Reserves Committee


Kazakh Mining
The Kazakh mining operations, which involve the processing and sale of copper
and other metals


Kazakhmys LLC

Kazakhmys Corporation LLC, the Group's principal operating subsidiary in
Kazakhstan


Kazakhstan
The Republic of Kazakhstan


Kgcal
One thousand Gigacalories, units of heat energy


km
Kilometres


koz
Thousand ounces


kt
Thousand metric tonnes


KZT or tenge
Kazakhstan tenge, the official currency of Kazakhstan


LME
London Metal Exchange


LSE
London Stock Exchange


MKM
Mansfelder Kupfer und Messing GmbH, the Group's operating subsidiary in the
Federal Republic of Germany


Ounce or oz
A troy ounce


ROCE
Return on Capital Employed, defined as profit before taxation, finance items and
negative goodwill over capital employed


$/t or $/tonne
US dollars per metric tonne


Special items
Those items which are non-recurring or variable in nature and which do not
impact the underlying trading performance of the business. Special items are set
out in note 4(a) to the financial statements


t
metric tonnes


Underlying Profit
Profit for the year after adding back items which are non-recurring or variable
in nature and which do not impact the underlying trading performance of the
business and their resultant tax and minority interest effects






                      This information is provided by RNS
            The company news service from the London Stock Exchange