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Kazakhmys PLC (KAZ)

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Wednesday 24 October, 2007

Kazakhmys PLC

Q3 Production Summary

Kazakhmys PLC
24 October 2007


         Kazakhmys PLC Production Summary for nine months and the third
                        quarter ended 30 September 2007

•  Total copper cathode production of 277.1* thousand tonnes for the
   first nine months of 2007, 6% lower than the same period of 2006.
      -   Total copper cathode output declined 5% in Q3 from the previous
          quarter, to 86.7 thousand tonnes, with production of cathodes from 
          own concentrate increasing by 8% to 85.9 thousand tonnes, benefiting 
          from the processing of stockpiled material.

•  By-product production generally reflected the lower level of ore
   output:
      -   Zinc in concentrate production was 101.2 thousand tonnes over the
          first nine months of 2007, a decrease of 6% compared to the same 
          period in 2006.
      -   Gold production from own concentrate increased by 3% while silver
          production declined by 7%, compared to the first 9 months of 2006.

•  Equipment availability and efficiency continues to affect output;
   although improvements are being seen in several areas, this remains an area 
   of management focus

Oleg Novachuk, Chief Executive Officer, said "As mentioned in our production
update earlier this month, output has dropped over the past quarter and while we
will endeavour to raise production in the last few months of the year, copper
cathode production from own ore in 2007 is likely to be moderately below the
level of 2006. Management is focused on maximising the efficiency of the
existing operations along with delivering our various growth projects and I look
forward to updating on these matters at the 2007 preliminary results".

* Excludes tolled material


For further information please contact:
--------------------------------------------------------------------------------
John Smelt, Head of Corporate Communications          Tel: +44 20 7901 7882
                                                      Tel: +44 787 964 2675

Sergei Stephantsov, Investor Relations Manager        Tel: +44 20 7901 7814
Kazakhmys PLC
================================================================================
Robin Walker
Finsbury                                              Tel: +44 20 7251 3801
--------------------------------------------------------------------------------


Notes to Editors

Kazakhmys PLC is the largest copper producer in Kazakhstan and one of the
leading copper producers in the world. Kazakhmys is a fully integrated copper
producer from mining ore through to the production of finished copper cathode
and rod. The Group produces significant volumes of other metals as by-products,
including zinc, silver and gold. Existing operations include 19 open pit and
underground mines, 9 concentrators, two copper smelting and refining complexes,
a copper rod plant, a zinc plant and a precious metals refinery. Production is
backed by a captive power supply and significant rail infrastructure. Kazakhmys
also owns MKM, a copper products fabrication company in Germany, and has Gold
and Petroleum Divisions with assets in Kazakhstan and Central Asia. The Group's
strategic aim is to diversify and participate in the development of the
significant natural resource opportunities in Central Asia.




Copper
--------------------------------------------------------------------------------
Kazakhmys Group Copper Production
                                     9m        9m       Q3       Q2        Q3
                                   2007      2006     2007     2007      2006
--------------------------------------------------------------------------------
Ore extraction         '000 t    26,236    30,255    8,242    9,063    10,128
--------------------------------------------------------------------------------
Average copper grade        %      1.21      1.12     1.21     1.18      1.16
--------------------------------------------------------------------------------
Average zinc grade(1)       %      3.77      4.23     3.96     3.67      4.75
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Copper in Concentrate  '000 t     293.1     314.0     91.6     96.8     111.4
--------------------------------------------------------------------------------
own concentrate        '000 t     263.1     283.6     80.3     89.3     100.1
--------------------------------------------------------------------------------
purchased concentrate  '000 t      30.0      30.5     11.3      7.5      11.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Copper Cathodes(2)     '000 t     278.2     295.2     87.0     91.5     107.3
--------------------------------------------------------------------------------
own concentrate        '000 t     249.5     265.5     86.0     79.7      96.5
--------------------------------------------------------------------------------
purchased concentrate  '000 t      27.6      28.1      0.7     11.6      10.6
--------------------------------------------------------------------------------
tolling concentrate    '000 t       1.1       1.7      0.3      0.2       0.3
--------------------------------------------------------------------------------
Copper Rod             '000 t      26.9      22.4      9.0      9.0       8.1
--------------------------------------------------------------------------------
1  Complex ores only
2  Includes copper used to produce copper rod


Ore extraction in Q3 2007 was 9% lower than in the previous quarter, at 8.2
million tonnes, and 19% below the same period of 2006. This was mainly due to
the impact of reduced output at Kounrad mine in the Balkhash region, and lower
output from Zhezkazgan, including the previously announced flooding at South
mine, which occurred in September. Output in the Karaganda and East regions was
slightly down over the quarter, with Kosmurun mine (Karaganda) maintaining its
strong performance over the nine months compared to 2006 and reaching its
projected capacity.

Copper grades in the first 9 months of 2007 have continued to be higher than in
the corresponding period of 2006, increasing from 1.12% to 1.21% primarily due
to the benefits of the Group's newer mines, such as Zhomart mine (Zhezkazgan),
and lower output from Kounrad (Balkhash). The effects of higher average ore
grade partially offset lower ore extraction.

The availability of spare parts in particular for hauling and loading equipment,
mentioned in earlier production reports, and partly a consequence of high mining
and infrastructure activity in the region, had an adverse impact at several
mines. Increased lead times for the delivery of new equipment have been
experienced in most areas and combined with equipment availability are an
increasing focus for management.

As mentioned in previous production reports, the majority of the Zhezkazgan
mines are at a mature stage and, as a result, considerable work in efficiencies
and expansions is being carried out in order to maintain current output levels.
In the medium term this will be balanced by a series of small development
projects in Zhezkazgan region, such as Sary-Oba, and Taskura, and an increase in
production volumes in the Karaganda region with new mine developments, such as
Akbastau, North Nurkazgan and West Nurkazgan underground.

There have been some delays in completing the construction of new concentrators
and concentrator upgrades. Nurkazgan concentrator is currently in commissioning
and is expected to ramp up to full capacity of 4,000 thousand tonnes towards the
end of H1 2008. This will then be able to take advantage of some 1.4 million
tonnes of stockpiled ore.

At the Karagaily concentrator, final technological tests are being carried out
to maximise metal recoveries from complex copper-zinc ores. Some stockpiled
material at Karagaily is likely to be processed at Nikolayevsky concentrator
from October, where an upgrade was completed in September.

The total production of copper cathode in the first 9 months of 2007 was 6%
lower than the same period of 2006, at 277.1 thousand tonnes. Total cathode
output in Q3 2007, at 87.0 thousand tones, was primarily reduced due to
significantly lower volumes of output from purchased concentrate Inventories of
purchased concentrate have increased at Balkhash smelter, which underwent
maintenance work in September 2007, and this material is likely to be processed
in Q4 2007. Copper cathode production from own concentrate increased by 8% in Q3
2007 primarily due to processing of inventory, which was reduced by 5.9 thousand
tonnes.




By-products
--------------------------------------------------------------------------------
Kazakhmys Group By-products Production

                                    9m         9m       Q3       Q2       Q3
                                  2007       2006     2007     2007     2006
--------------------------------------------------------------------------------
Zinc in Concentrate  '000 t      101.2      107.1     30.0     32.6     36.6
--------------------------------------------------------------------------------
Zinc Metal           '000 t       33.1       45.9      5.7     12.5     12.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Silver              '000 oz     14,840     15,993    4,730    5,089    5,301
--------------------------------------------------------------------------------
own production      '000 oz     14,830     15,954    4,726    5,087    5,295
--------------------------------------------------------------------------------
tolling             '000 oz         10         39        3        2        6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gold                '000 oz      103.2      120.6     32.6     36.6     42.9
--------------------------------------------------------------------------------
own production      '000 oz       81.2       79.2     29.8     32.2     25.6
--------------------------------------------------------------------------------
tolling             '000 oz       22.0       41.4      2.8      4.4     17.3
--------------------------------------------------------------------------------


The production of zinc in Q3 2007 reflects a similar pattern to that seen in the
first six months of the year. Lower zinc grades and lower volumes of zinc
containing ores being extracted in the East region have led to zinc in
concentrate production of 101.2 thousand tonnes, 5% lower than in the first 9
months of 2006. Production of zinc in concentrate was principally affected by
lower output from Orlovskoe mine, due to equipment issues, and lower grades at
Artemyevskoe (both East region).

Zinc metal output is below the current annualised capacity of 60 thousand
tonnes, which should be partially balanced in Q4 of 2007, when the lower outside
temperatures should allow the plant to operate more efficiently. The sale of
zinc concentrate, as opposed to finished metal, remains attractive.

In the third quarter of 2007, 32.6 thousand ounces of gold was produced, a
decrease of 11% from the second quarter of 2007. 29.8 thousand ounces was
produced from own concentrate, a 7% decrease compared to the second quarter of
2007. Q3 2007 gold production was 16% higher than in the corresponding period of
2006 due to higher gold grades at the East Region (primarily Orlovskoe and
Yubileino-Snegerihinskoe mines) and Kosmurun mine in the Karaganda region. The
Abyz mine stopped production for stripping works in October 2006. The mine is
expected to resume production in early 2008.

4.7 million ounces of refined silver was produced in Q3 2007, of which, only 3
thousand ounces was produced under tolling arrangements. The decline of 11% from
Q3 2006 is mainly due to lower ore production and silver grade in Zhezkazgan.
Silver production from own material in Q3 reduced 7% to 4.7 million ounces,
compared to Q2 2007. This was principally due to lower processing of stockpiled
material, which reduced by just 314.7 thousand ounces to stand at 3.5 million
ounces at the period end.




Review by region
--------------------------------------------------------------------------------
Zhezkazgan Complex
                                     9m        9m       Q3       Q2       Q3
                                   2007      2006     2007     2007     2006
--------------------------------------------------------------------------------
Ore extraction         '000 t    18,602    21,120    5,786    6,516    7,071
--------------------------------------------------------------------------------
Average copper grade        %      0.81      0.81     0.81     0.80     0.79
--------------------------------------------------------------------------------
Copper Concentrate     '000 t     368.2     412.2    121.0    126.4    132.1
--------------------------------------------------------------------------------
Copper in Concentrate  '000 t     135.7     149.6     42.6     46.6     48.7
--------------------------------------------------------------------------------
Copper Cathodes(1)     '000 t     138.5     165.6     44.7     43.9     59.8
--------------------------------------------------------------------------------
of which tolling       '000 t        --       0.5       --       --      0.2
--------------------------------------------------------------------------------
Copper Rod             '000 t      26.9      22.4      9.0      9.0      8.0
--------------------------------------------------------------------------------
1  Includes copper used to produce copper rod


Ore extraction at the Zhezkazgan complex in the first 9 months of 2007 was 12%
lower than in corresponding period of 2006.

The reported accident at the South mine, which took place on 9 September 2007,
has resulted in flooding in two mine shafts, which prevented the removal of
mined ore. South mine produced just 109 thousand tonnes in September 2007
compared to a year to date average monthly production of 500 thousand tonnes.
The damage caused by the flood is now being rectified and the mine is expected
to resume full operation by the end of the year.

Annual comparisons are also influenced by continued lower production volumes at
Annenskoe mine following the previously reported roof fall in late 2006 which
required extensive mining works to overpass the rockfall area. Compared to Q2
2007, production volumes were also lower at Zhomart and Stepnoe mines due to the
issues with conveyor, loading and haulage equipment. North mine is waiting for
the delivery of drilling, excavator and transportation equipment, which should
allow a recovery in production.

Copper cathode production was marginally higher with a 2% increase compared to
Q2 2007 as there was the impact of moderate smelter maintenance work in the
period, compared to a 14 day maintenance shutdown at the end of May. There was
also some benefit from production from inventory.




Balkhash Complex
                                    9m        9m        Q3        Q2        Q3
                                  2007      2006      2007      2007      2006
--------------------------------------------------------------------------------
Ore extraction        '000 t     1,708     3,538       616       602     1,252
--------------------------------------------------------------------------------
Average copper grade       %      1.05      0.78      0.86      1.08      0.72
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Copper Concentrate(1) '000 t     140.3     205.2      47.8      51.3      72.1
--------------------------------------------------------------------------------
Copper in Concentrate '000 t      23.7      34.6       7.8       8.3      10.3
--------------------------------------------------------------------------------
Copper Cathodes       '000 t     139.7     128.6      42.2      47.6      47.5
--------------------------------------------------------------------------------
of which tolling      '000 t       1.1       1.0       0.3       0.2       0.1
--------------------------------------------------------------------------------
Copper Rod            '000 t        --        --        --        --        --
--------------------------------------------------------------------------------


Ore extraction at the Balkhash complex is below that of 2006, due to the
continuation of planned stripping works at Kounrad mine. In the first 9 months
the region's production was down to 1.7 million tonnes of ore, compared to 3.5
million tonnes in the corresponding period of 2006. In the first 9 months of
2006 Kounrad produced 1.9 million tonnes of ore compared to 0.4 million tonnes
in same period for 2007, most of which was in Q3. It is likely that the
stripping works will continue through much of 2008 with some intermittent
accompanying ore extraction during this period. The issues regarding drilling
and underground loading and transportation equipment at Sayak mine, mentioned in
the Q1 and Q2 production reports, still have not been fully rectified and
resulted in a 253 thousand tonnes decrease in ore extraction volumes in the
first 9 months of 2007 compared to the corresponding period of 2006.

Sayak and Kounrad mines have grades below the region's average, so that their
reduced output raised the average region's copper grade for the period from
0.78% in the first 9 months of 2006 to 1.05% in the same period of 2007. In Q3
2007 copper grades were lower than in Q2 2007, due to lower copper grades at
Shatyrkul mine, caused by higher dilution rates.

Copper cathode production declined from 47.6 thousand tonnes in Q2 2007 to 42.2
due to refurbishment at one of the two furnaces in August-September 2007. There
are no major overhauls planned at Balkhash complex furnaces in Q4 2007.




East Region
                                    9m        9m        Q3        Q2        Q3
                                  2007      2006      2007      2007      2006
--------------------------------------------------------------------------------
Ore extraction        '000 t     3,134     3,393       961     1,027     1,075
--------------------------------------------------------------------------------
Average copper grade       %      2.74      2.78      3.07      2.50      3.09
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Copper Concentrate(1) '000 t     358.8     259.5     127.4     105.2     127.4
--------------------------------------------------------------------------------
Copper in Concentrate '000 t      68.1      74.1      24.4      20.0      26.5
--------------------------------------------------------------------------------
Copper Cathodes       '000 t        --        --        --        --        --
--------------------------------------------------------------------------------
Copper Rod            '000 t        --        --        --        --        --
--------------------------------------------------------------------------------
1  Excludes concentrate processed by third parties


Ore extraction at the East region in the first 9 months of 2007 was lower than
in the same period of 2006 primarily due to lower production volumes at
Orlovskoe, Nikolayevskoe, Belousovskoe and Irtyshskoe mines. This was mainly due
to equipment availability issues.

Ore extraction in Q3 2007 was lower than in Q2 2007 due to lower production
volumes primarily at Artemyevskoe mine, partially offset by growth in output at
Orlovskoe and Yubilein-Snegirihinskoe mines. Lower production at Artemyevskoe
mine was caused by changes in geological conditions and a shift in ore
extraction towards the copper-zinc ore rather than polymetalic ores. Output was
also reduced by the ramp up of the Nikolayevskoe concentrator after the recent
upgrade, which will improve processing of polymetalic ores internally.

Lower ore output was more than offset by improved grades, primarily due to
Orlovskoe mine, where copper grade approached 6.00% in Q3, and at
Yubileino-Snegerihinskoe mine with an average grade of 3.51% in Q3. This allowed
copper in concentrate production to increase by 22%, to 24.4 thousand tonnes,
compared to the previous quarter.




Karaganda Region
                                    9m        9m        Q3        Q2        Q3
                                  2007      2006      2007      2007      2006
--------------------------------------------------------------------------------
Ore extraction        '000 t     2,792     2,204       880       917       730
--------------------------------------------------------------------------------
Average copper grade       %      2.27      2.13      2.07      2.46      2.72
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Copper Concentrate    '000 t     192.7     136.9      34.0      79.5      65.7
--------------------------------------------------------------------------------
Copper in Concentrate '000 t      29.1      18.0       4.5      12.0      11.6
--------------------------------------------------------------------------------
Copper Cathodes       '000 t        --        --        --        --        --
--------------------------------------------------------------------------------
Copper Rod            '000 t        --        --        --        --        --
--------------------------------------------------------------------------------


Ore production at Karaganda region increased from 2.2 million tonnes in the
first 9 months of 2006, to 2.8 million tonnes in the corresponding period of
2007. This was mainly due to higher production at Kosmurun mine, which increased
by 685 thousand tonnes reaching its projected capacity. The increase was partly
offset by the closure of Abyz mine, for planned stripping works, which had
produced 209.8 thousand tonnes of ore in the first nine months of 2006.

In July 2007 the new Akbastau mine, situated next to the Kosmurun mine,
commenced its first production of 40 thousand tonnes. The mine is expected to
ramp up to more consistent production in 2008.

Average copper ore grades for the first 9 month period of 2007 showed further
improvement compared to the corresponding period of 2006 due to the higher
contribution of the rich grade ores of Kosmurun mine relating to its ramping up
production and the absence of production at Abyz mine, which has below average
copper grades. In Q3 2007 the average copper grade decreased primarily due to
lower copper grades of Kosmurun copper-zinc ores.

1.4 million tonnes of Nurkazgan ore containing around 16.8 thousand tonnes of
copper was stockpiled during the period and is expected to start being processed
in Q4. The new Nurkazgan concentrator should start production more fully in
November, moving towards monthly capacity of 150 thousand tonnes and reaching
full capacity from the beginning of the next year. Stockpiles of material may
well be processed through the Nikolayevskoe and Balkhash concentrators over the
coming months, the former being able to deal with the copper-zinc complex ores.




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