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Kazakhmys PLC (KAZ)

  Print      Mail a friend       Annual reports

Thursday 29 April, 2010

Kazakhmys PLC

Production report for Q1 ende

RNS Number : 9934K
Kazakhmys PLC
29 April 2010
 



 

29 April 2010

 

Kazakhmys PLC Production Report for the First Quarter Ended 31

March 2010 & Interim Management Statement

 

 

·    Quarterly production of 78.4 kt copper cathode equivalent from own material:

§ On track to achieve annual target

§ Benefitted from increased output at several mines and a release of work in progress from 2009

 

·    By-product output slightly ahead of annual target:

§ Zinc production of 39.5 kt  assisted by higher grades and higher ore output

§ Gold production of 33.0 koz helped by a release of work in progress from 2009

§ Silver production of 3,127 koz impacted by lower grades

 

·    Kazakhmys Power:

§ Net power generated of 2,920 GWh

§ Domestic sales and demand remains firm and pricing continues to increase

§ No export sales in Q1 2010, although these should recommence during the year

 

·    Copper sales:

§ All 2010 customer contracts are complete, covering 90% of anticipated production

§ Demand for all metals remains sound

 

Oleg Novachuk, Chief Executive Officer, said "Production has gone well in Q1 2010 and we remain on target to produce just over 300 kt of copper cathode during the year.  Demand for our metals is sound and we believe that the outlook for the year is positive.  With committed funding in place we are now able to focus on our growth projects and I look forward to updating you on our progress over the course of the year."

 

For further information please contact:

Kazakhmys PLC



John Smelt

Head of Corporate Communications

Tel: +44 20 7901 7882

Tel: +44 78 7964 2675

Irene Burton

Financial Analyst

Tel: +44 20 7901 7814

Zulfira Mukhamedyarovа

Senior Manager - Media Relations

Tel: +77 27  266 3317 

Merlin



David Simonson


Tel: +44 20 7726 8400

Tom Randell


Tel: +44 20 7726 8400

Leonid Fink


Tel: +44 20 7726 8400

 

REGISTERED OFFICE

6th Floor, Cardinal Place, 100 Victoria Street, London SW1E 5JL.

 

 

Notes to Editors

Kazakhmys PLC is a leading international natural resources group with significant interests in copper, gold, zinc, silver, power generation and petroleum.

 

It is the largest copper producer in Kazakhstan and one of the top ten worldwide with 15 operating mines, 10 concentrators and 2 copper smelters. Kazakhmys Copper operations are fully integrated from mining ore through to the production of finished copper cathode and rod. Total copper cathode equivalent produced in 2009 from own ore was 320 thousand tonnes. Production is backed by a captive power supply and significant rail infrastructure.

 

Kazakhmys Copper produces significant volumes of other metals, including zinc, silver and gold. In 2009, it produced 149 thousand tonnes of zinc in concentrate. The Group is in the top ten largest silver producers in the world (17 million ounces produced in 2009).

 

Kazakhmys Gold, which acquired Eurasia Gold Inc in July 2007, includes new development and exploration opportunities. Kazakhmys Gold has measured and indicated gold equivalent resources of 2.5 million ounces. The Group produced 182 thousand ounces of gold in 2009.

 

Kazakhmys Power has a 50% interest in the coal fired Ekibastuz GRES-1 plant, the largest in Kazakhstan with a nameplate capacity of 4,000 MW.

 

Kazakhmys Petroleum is continuing its work programme at the East Akzhar exploration block, located on the eastern fringe of the Caspian depression, which was acquired in April 2007.

 

The Group is part of the FTSE-100 index of companies listed on the London Stock Exchange and is also listed on the Kazakhstan Stock Exchange (KASE). It had revenues of $3.7 billion in 2009 with EBITDA of $1.6 billion. The Group employs some 62,000 people, principally in Kazakhstan. The Group's strategic aim is to optimise its current operations, deliver its major growth projects and to diversify and participate in the development of the significant natural resource opportunities in Central Asia.



Copper Summary

Kazakhmys Copper Production



Q1

2010

 

Q4

2009

 

Q1

2009

 

Ore extraction

'000 t

7,901

7,998

7,760

 Average copper grade

%

1.15

1.19

1.20






Copper in concentrate

'000 t

81.0

91.0

87.4

 own concentrate

'000 t

81.0

91.0

87.4

 purchased concentrate

'000 t

-

-

-






Copper cathode equivalent

production1

 

'000 t

78.4

69.1

85.6

   own concentrate

'000 t

78.4

68.1

81.9

   purchased concentrate

'000 t

-

0.9

3.7

   tolling concentrate

'000 t

-

0.1

-

Copper rod

'000 t

9.0

2.1

2.1

      1Includes copper sold in concentrate and cathode converted into rod.    

 

Production of copper in 2009 benefited from the processing of stockpiles brought forward from 2008. Over the course of 2009 these stockpiles were reduced to low levels, such that production in 2010 will be largely dependent on ore mined during the year.

 

Ore output increased by 2% from 7,760 kt in Q1 2009 to 7,901 kt in Q1 2010.  This improvement reflects a general increase in output across a range of mines, with particular increases in the Karaganda region.  These increases more than offset the lower output at North mine, in Zhezkazgan.

 

The average copper grade in Q1 2010 was 1.15%, slightly lower than the two comparative periods. The reduction in grade was mainly due to lower grade at Orlovsky mine, in the East region, where operations moved to a less rich area, and increased volumes at the relatively lower grade Nurkazgan West mine in Karaganda.

 

Production of copper in concentrate in Q1 2010 was impacted by the reduction in metal mined, following the decline in grade, and a lower contribution from the processing of stockpiled material, mentioned above.

 

Copper cathode equivalent production from own concentrate, of 78.4 kt, benefited from some release of work in progress, carried over from 2009, with an increase of 15% on Q4 2009. Copper cathode equivalent production was 4% lower than Q1 2009, when there was notable processing of material brought forward from 2008.

 

No third party concentrate was purchased in the period and this is expected to remain low in 2010.  There were no sales of own copper in concentrate in Q1 2010.

 

The refurbished furnace at the Zhezkazgan smelter will be recommissioned and tested in Q2 2010.  Maintenance work will then take place on the second Zhezkazgan furnace. The surplus concentrate from Zhezkazgan is continuing to be shipped to Balkhash for processing.

 

Copper Summary

Kazakhmys Copper Production (CONTINUED)

One of the furnaces at the Balkhash smelter was closed for annual maintenance during most of the quarter, but was brought back into production in early March 2010.  Modernisation of the Balkhash furnaces will continue over the next two to three years to enhance their productivity and reliability.  This work will include increasing the temperature for the smelting process, which should lead to higher recovery rates, upgrading the water-cooling system and other renovation work.

 

Production of copper rod increased compared to Q1 and Q4 2009, reflecting improved premiums.  In 2010 approximately 10% of annual cathode production is likely to be processed into rods, for sale into China and to customers in Kazakhstan.

 


By-products Summary

Kazakhmys copper By-products Production

 



Q1

2010

 

Q4

2009

 

Q1

2009

 

Zinc in concentrate

'000 t

39.5

40.5

39.8

Zinc metal

'000 t

-

-

8.6

Average zinc grade

%

4.74

4.56

4.26






Silver

'000 oz

3,127

3,701

4,438

 own production1

'000 oz

3,127

3,698

4,437

 tolling2

'000 oz

-

3

1

Average silver grade

g/tonne

20.44

22.16

21.88






Gold

'000 oz

36.3

34.6

30.3

 own production1

'000 oz

33.0

30.6

29.0

 tolling2

'000 oz

3.3

4.0

1.3

Average gold grade

g/tonne

0.80

0.70

0.68

       1 Includes slimes from purchased concentrate.

      2 Represents tolled materials provided via third parties.

 

Summary

Similar to copper, there was no contribution to by-product output from stockpiled ore in Q1 2010.  The higher recovery rates in processing, which were achieved during 2009, have been maintained in Q1 2010.  

 

Zinc by-product

The production of zinc in concentrate, of 39.5 kt in Q1 2010, was in line with the comparable quarters in 2009.  There was an increase in zinc metal mined, due to higher grades, ore output and an improvement in recovery rates compared to Q1 2009. These positive factors offset the lower contribution from the processing of stockpiled ore, carried over from 2008 and processed in 2009.

 

Silver by-product

Lower silver grades in the Zhezkazgan region and the absence of material from stockpiled ores, led to lower silver in concentrate production.

 

The decrease in Q1 2010, compared to Q1 2009, particularly reflects the significant release (around 700 koz) of work in progress which was carried forward from 2008 and processed in Q1 2009.

 

Gold by-product

There was an increase in gold mined in Q1 2010, mainly due to the higher contribution from Abyz mine, in the Karaganda region.  This is not seen in an increase of production of gold in concentrate, as the comparable quarters benefited from the processing of stockpiled ore.

 

Own gold production however, of 33.0 koz in Q1 2010, was ahead of the comparative quarters, due to a release of work in progress carried over from December 2009.

 

 

 

Kazakhmys Copper Review by Region

Zhezkazgan Complex



Q1

2010

 

Q4

2009

 

Q1

2009

 

Ore extraction

'000 t

5,428

5,691

5,908

Average copper grade

%

0.86

0.88

0.87






Copper concentrate

'000 t

115.3

122.1

128.0

Copper in concentrate

'000 t

41.6

44.6

45.2






Copper cathodes1

'000 t

28.3

20.9

31.1

 own concentrate

'000 t

28.3

20.9

31.1

 purchased concentrate

'000 t

-

-

-

 tolling2

'000 t

-

-

-

Copper rod

'000 t

9.0

2.1

2.1

      1 Includes copper used to produce copper rod.

     2 Represents tolled materials provided via third parties.

 

 

 

Ore extraction at the Zhezkazgan complex of 5,428 kt in Q1 2010 was 8% lower than Q1 2009. This decrease was mainly due to a reduction in volumes at North mine, following the closure of the Taskora open pit in Q4 2009, and the commencement of extensive stripping work at the beginning of 2010. Mining should resume during H2 2010, gradually ramping up in the second half of the year.

 

There was an increase in ore production at South and Zhomart mines in Q1 2010 compared to Q1 2009. South mine benefited from the transfer of equipment and personnel from the suspended West mine. Zhomart experienced improved operational efficiency.

 

Ore extraction in Q1 2010 was 5% below Q4 2009, reflecting the reductions at North mine, described above, although partially offset by the increase at Zhomart and higher output from Stepnoy mine.

 

The reduction of copper in concentrate in Q1 2010 is due to the lower level of ore output.

 

Copper cathodes at the Zhezkazgan smelter are largely produced from concentrate output at the Zhezkazgan concentrators. For operational efficiency, Zhezkazgan ships surplus concentrate to the Balkhash smelter for processing.

 

Kazakhmys Copper Review by Region

Balkhash Complex



Q1

2010

 

Q4

2009

 

Q1

2009

 

Ore extraction

'000 t

562

590

546

Average copper grade

%

1.28

1.27

1.37






Copper concentrate1

'000 t

57.1

62.4

46.2

Copper in concentrate

'000 t

10.4

11.9

8.3






Copper cathodes

'000 t

50.1

45.9

49.5

 own concentrate

'000 t

50.1

44.9

45.8

 purchased concentrate

'000 t

-

0.9

3.7

 tolling2

'000 t

-

0.1

-

      1Excludes concentrate processed by third parties.

      2 Represents tolled materials provided via third parties.

 

 

Ore output volumes at Balkhash complex were broadly in line with output in Q1 and Q4 2009, reflecting no major changes to the operations in the complex.

 

Average copper grade in Q1 2010 decreased to 1.28% compared to 1.37% in Q1 2009. The decrease was due to a decline in grade at the Sayak mine, as operations moved to a less rich area.

 

The production of copper in concentrate in each of the quarters has been influenced by the timing of waste material reprocessed during each period.

 

Copper cathodes at the Balkhash smelter are largely produced from concentrate output of the Balkhash, Karaganda and East regions. For operational efficiency, the Zhezkazgan complex also supplies surplus concentrate to the Balkhash smelter.


Kazakhmys Copper Review by Region

East Region



Q1

2010

 

Q4

2009

 

Q1

2009

 

Ore extraction

'000 t

1,171

1,079

1,120

Average copper grade

%

2.59

2.93

2.91






Copper concentrate1

'000 t

120.3

144.6

155.5

Copper in concentrate

'000 t

21.4

26.2

27.5

      1Excludes concentrate processed by third parties.

 

 

Ore output increased from the levels achieved in Q1 and Q4 2009, to 1,171 kt. Artemyevsky mine was constrained during 2009 by several production issues.  The completion of a backfill cement plant and the commissioning of new lifting equipment on the main shaft has increased ore output and should allow output during 2010 to be sustained at a similar level to that achieved in Q1 2010.  

 

In Q1 2010, the average copper grade in the East Region was 2.59%, which was below the grades achieved in the comparable periods during 2009. This reduction was principally due to a decline in grades at Orlovsky mine, where mining has moved to a less rich area.

 

Copper in concentrate production in Q1 2010 was 21.4 kt, reflecting the lower volume of metal mined in the quarter, as the higher ore output was offset by grade decline.  In addition, the transportation of ore was negatively impacted by severe weather conditions experienced earlier this year. Some of the ore has been stockpiled and will be processed later in the year.



Kazakhmys Copper Review by Region

Karaganda Region



Q1

2010

 

Q4

2009

 

Q1

2009

 

Ore extraction

'000 t

740

638

186

Average copper grade

%

0.93

0.93

0.70






Copper concentrate

'000 t

64.8

74.5

47.7

Copper in concentrate

'000 t

5.4

5.9

4.4

 

Ore extraction in the Karaganda region has significantly increased from the comparative quarters in 2009. This increase was due to the higher contribution from the underground Nurkazgan mine, which was brought into production in February 2009, and an increased contribution from the Abyz mine, where stripping work was taking place during H1 2009.

 

Copper in concentrate production in the region in Q1 2010 was 23% ahead of Q1 2009, reflecting the higher volumes of metal mined and processed during the quarter. In Q1 2009, production of copper in concentrate had been mainly processed from stockpiled ore from the Abyz and Akbastau mines.

 

Additional processing of stockpiled Abyz ore in Q4 2009 and a delay in the processing of ore at the Karagaily concentrator during Q1 2010, resulted in slightly lower output compared to Q4 2009.



Other Divisions Review

kazakhmys gold PRODUCTION



Q1

2010

 

Q4

2009

 

Q1

2009

 

Ore extraction 

'000 t

91

157

138

Gold ore grade

g/t

1.25

1.29

1.79






Gold in ore to pads

'000 oz

4.9

12.1

7.6

Gold precipitation

'000 oz

5.4

10.9

6.6






Gold doré production

'000 oz

5.5

11.5

6.1

Silver production

'000 oz

6.4

9.9

6.4

 

 

 

Ore extraction in Q1 2010 decreased compared to Q1 2009 and Q4 2010 due to the severe winter conditions experienced during January and February 2010.  These difficulties caused delays and power supply disruption, particularly at Mizek mine. Processing in Q1 2010 was also affected by the normal seasonal impact experienced each winter. Production is carried out using a heap leaching method, which slows down with a decrease in the temperature of the solution.

 

Mining work at Mizek and Mukur mines has moved to less mineral rich areas, resulting in the lower gold grade achieved during Q1 2010 compared to the comparable periods in 2009.

 

Gold doré production in Q1 2010 declined compared to Q1 2009 and Q4 2009, reflecting the lower quantity of gold metal mined and processed as the output and grade declined.

 



Other Divisions Review

kazakhmys petroleum

Kazakhmys Petroleum continues its drilling and testing programme at the East Akzhar exploration block in western Kazakhstan.

 

The drilling of a third deep well has been completed to a depth of 5,253 meters. The well will now be perforated to test inflow and pressure.

 

The work on the first well to rectify the technical difficulties has been completed and testing will be resumed as soon as the perforation equipment is relocated from the third well.

 

The testing of the second well will take place when the results of the first and the third well have been obtained.

 

The rig site for the fourth well has been constructed and the rig has been relocated to the site. Drilling will commence following the receipt of the results on the current wells.

 

 



Other Divisions Review

kazakhmys Power Production



Q1

2010

 

Q4

2009

 

Q1

2009

 

Net power generated

GWh

2,920

3,566

1,780

Net dependable capacity1

MW

2,171

2,143

2,095

1 The net dependable capacity is the maximum capacity a unit can sustain over a specified period modified for seasonal limitations and reduced by the capacity required for station service and auxiliaries.

 

On 26 February 2010, the Group completed the disposal of 50% of Ekibastuz GRES-1 to Samruk with the Group retaining a 50% non controlling interest.  The results shown above are for 100% of the business.

 

Net power generated at Ekibastuz GRES-1 in Q1 2010 fell by 18% compared to Q4 2009 as there were no export sales to Russia, which had made up 17% of total net power generated in Q4 2009.  Export sales to Russia are likely to return later in the year following further negotiations on contracts.  Domestic sales have remained relatively steady, reflecting seasonal factors.

 

Demand for electricity in Q1 2009 was depressed by lower economic activity, but recovered during 2009 as the economy improved, and specifically as global demand rose for commodities processed in Kazakhstan. For these reasons, power generated in Q1 2010 was 64% higher than Q1 2009.

 

In Q1 2010, net dependable capacity increased by 28 MW, compared to Q4 2009, due to the overhaul of Unit 5 and planned maintenance of other units.  

 



Interim Management Statement

MATERIAL eVENTS AND tRANSACTIONS

There are no material events and transactions in the period covered by this Interim Management Statement that were not disclosed as post balance sheet events in the Group's 2009 Annual Report and Accounts, other than the memorandum of understanding regarding the development of the Aktogay deposit.

 

Sale of 50% of Ekibastuz GRES-1 LLP to Samruk

On 10 December 2009, it was announced that the Group had agreed to dispose of 50% of Ekibastuz GRES-1 LLP, a 100% owned subsidiary, within the Kazakhmys Power division, to the National Welfare Fund Samruk-Kazyna JSC ("Samruk"), an entity wholly owned and controlled by the Government of Kazakhstan, for a consideration of $681 million. The transaction completed on 26 February 2010 and the Group has retained a non-controlling interest of 50% in the business which will be equity accounted as a joint venture.  The consideration of $681 million was received from Samruk prior to 31 December 2009, but the accounting gain arising on the disposal of 50% of the business will be recognised in 2010.

 

China Development Bank ("CDB") funding

On 30 December 2009, Kazakhmys announced that it had obtained a loan facility of up to $2.7 billion, allocated from a $3.0 billion financing line agreed between CDB and Samruk. Facility agreements were signed for $2.1 billion on 30 December 2009, and for a further $200 million on 12 January 2010.  These funds are for the development of Kazakhmys' projects at Bozymchak and Bozshakol and other development projects.  The balance of up to $400 million remains available over the next three years.  

 

Further details of the terms and guarantee structure of the funding can be found in Note 46 of the Group's 2009 Annual Report and Accounts.

 

On 17 March 2010, the Group made its first drawdown under the CDB loan facility of $300 million.  Of this figure, $100 million is intended for the development of the gold/copper Bozymchak deposit in Kyrgyzstan and $200 million is intended for other mid-sized projects in Kazakhstan.

 

Tenge bond

On 29 January 2010, the Group completed its debut bond issue listed on the Kazakhstan Stock Exchange. The bond, with a total value of 10 billion tenge (approximately $67 million), was issued by Ekibastuz GRES-1 LLP, for general corporate purposes, including financing some of the future capital expenditure programme at the Ekibastuz GRES-1 power plant. The bond has a coupon of 12% and will mature in five years.

 

Revolving credit facilities

On 11 March 2010, the Group signed a $100 million revolving credit facility with a maturity date in March 2011. On 26 March 2010, the Group signed an agreement to extend the existing $150 million revolving credit facility for an additional year to March 2011. Both facilities remain undrawn at 31 March 2010.

 

Memorandum of understanding signed for development of Aktogay

On 26 April 2010, the Group announced that it had signed a memorandum of understanding with Jinchuan Group Ltd ("Jinchuan") of the People's Republic of China to create a joint venture to develop the Group's major copper growth project at Aktogay.  Subject to the parties

 

Interim Management Statement

MATERIAL eVENTS AND tRANSACTIONS (CONTINUED)

completing an investment agreement and regulatory and other approvals, Jinchuan has agreed to purchase a 49% stake in the project for $120 million, payable in cash.

 

Following establishment of the joint venture, a feasibility study will be conducted on the Aktogay deposit, which should take around 12 months to complete.  The project will then enter into development and construction, which is anticipated to take around three years. Aktogay has an estimated development cost of $1.5 to $2 billion and is expected to produce around 100 kt of copper in concentrate each year, with a mine life of approximately 40 years.



Interim Management Statement

financial Performance

Sales volumes

The following table sets out the sales volumes of the major products produced by Kazakhmys Copper:

 

 

 

Q1

2010

 

Q4

2009

 

Q1

2009

 

Copper cathodes

'000 t

75.3

64.3

94.9

Copper rod

'000 t

7.8

1.6

2.3

Copper in concentrate

'000 t

-

2.3

5.3

Total copper products

'000 t

83.1

68.2

102.5

 


 

 

 

Zinc metal

'000 t

-

-

10.2

Zinc in concentrate

'000 t

31.3

36.0

34.0

 


 

 

 

Silver

'000 oz

3,215

3,697

3,215

 


 

 

 

Gold

'000 oz

40.2

29.0

30.6

 

Total copper product sales for the quarter ended 31 March 2010 were lower than Q1 2009, as the comparative period benefited from a reduction in inventory and higher production levels. Sales of copper products in Q4 2009 were impacted by a re-build of work in progress.

 

In 2009, copper rod sales were limited to local demand as premiums in China were unattractive. In Q1 2010, sales of rod into China have resumed under annual contracts. No sales of copper concentrate were made in Q1 2010 following the trial sales which took place in 2009.

 

Zinc in concentrate sales are lower in Q1 2010 than in the comparable periods, due to the timing of sales which has led to an increase in inventory over the quarter. Sales of zinc metal ceased following the suspension of the zinc smelter in the first half of 2009.

 

Silver sales in Q1 2010 and Q4 2009 were broadly in line with production.  Sales for Q1 2009 were below production, as there was silver inventory and goods in transit carried forward into the following quarter.

 

Gold sales have increased in Q1 2010, mainly as a result of a reduction in inventory levels, as production volumes have remained relatively stable compared to Q1 2009 and Q4 2009.

 



Interim Management Statement

FINANCIAL PERFORMANCE (CONTINUED)

Commodity prices

The following table sets out the average realised prices for the Group's major metal products:

 



Q1

2010

Q4

2009

Q1

2009

Copper1

$/tonne

7,037

6,737

3,319

Gold

$/tr.oz

1,106

1,093

908

Silver

$/tr.oz

17.0

17.0

13.0

Electricity tariff

KZT/kWh

4.6

3.5

2.8

1The realised price excludes any impact of the copper hedges noted below.

 

The following table sets out the average LME/LBMA prices:

 



Q1

2010

Q4

2009

Q1

2009

Copper

$/tonne

7,243

6,648

3,428

Zinc

$/tonne

2,288

2,214

1,172

Gold

$/tr.oz

1,109

1,101

908

Silver

$/tr.oz

17.0

18.0

13.0

 

Realised prices will differ from the average prices during the same period, principally because of the timing of sales over the period not occurring evenly. Premiums or discounts to metal exchange prices, negotiated with customers, will also impact the realised average prices. The LME copper prices began Q1 2010 at $7,464 per tonne and ended the quarter at $7,830 per tonne.

 

The significant rise in the electricity tariff from Q4 2009 to Q1 2010 is the result of the new domestic tariff ceilings set by the Government during 2009, in order to encourage investment in the sector.  In 2010 the ceiling tariff for domestic sales is 4.68 KZT/kWh.

 

Copper hedging

The 2009 copper hedging programme expired on 31 December 2009. At 31 March 2010, there were no copper hedges in place other than at MKM in the normal course of its business.

 

Exchange rates

The KZT/$ exchange rate at 31 March 2010 was KZT147.11 compared to KZT148.36 at 31 December 2009 and KZT151.40 at 31 March 2009. The average exchange rate for Q1 2010, was KZT147.70, compared to an average rate of KZT138.97 for Q1 2009, a reduction of 6%, due to the devaluation of the KZT in February 2009.

 



Interim Management Statement

fINANCIAL POSITION

Except as described in this statement, there has been no significant change in the financial position of the Group since 31 December 2009.

 

Net debt for continuing businesses

The net debt position of the Group at 31 March 2010 was $722 million compared to $689 million as at 31 December 2009. Net debt is presented excluding MKM, which is held for sale, and Kazakhmys Power and ENRC, which are not consolidated.  The increase in net debt has been due to the timing of payments for taxation, an initial payment of $50 million for a new library in Astana as part of the Group's social programme in Kazakhstan and capital expenditure on operations and projects.

 

There was gross debt at 31 March 2010 of $1,811 million.  The outstanding balance on the pre-export credit facility was $1,531 million (net of arrangement fees) at 31 March 2010, a reduction of $132 million from the outstanding balance at 31 December 2009, due to principal repayments of $44 million per month.  These monthly capital repayments will continue to March 2013.  During Q1 2010, a first draw down of $300 million was made under the CDB facility, as described earlier. 

 

Total cash and cash equivalents for the Group were $1,089 million at 31 March 2010, compared with $961 million at 31 December 2009. The increase in the cash and cash equivalents during the quarter mainly reflects proceeds from drawing under the CDB facility offset by the principal repayments under the pre-export credit facility, and the payments set out above.

 

Net debt for MKM and Kazakhmys Power

The net debt/funds balances for MKM and Kazakhmys Power are excluded from the Group balances described above. MKM's net debt of $171 million at the end of Q1 2010 has increased by $14 million from $157 million as at 31 December 2009 reflecting increased working capital balances due to a higher copper price.  The net funds position of Kazakhmys Power at the end of Q1 2010 was $58 million, an increase of $16 million compared to the position as at 31 December 2009 of $42 million. The increase in funds at Kazakhmys Power comes ahead of significant capital expenditure later in the year on the expansion programme at the power station. 

 

Holding in ENRC PLC

The Group's holding of 334,824,860 shares in ENRC PLC had a market value of $6,013 million based on a share price of 1,192 pence on 31 March 2010, compared to a value of $4,879 million as at 31 December 2009 when the share price was 915 pence.

 

Based on the 2009 final dividend announced by ENRC PLC on 24 March 2010 of 6 US cents per share, the Group should receive $20 million in June 2010.

`

Kazakhmys Copper  Production Appendix

Copper MINing

Zhezkazgan complex

Q1

2010

 

Q4

2009

 

Q1

2009

 

North

ore ('000 t)

62

508

935


grade (%)

0.31

0.74

0.78

East

ore ('000 t)

1,307

1,307

1,259


grade (%)

0.67

0.69

0.64

South

ore ('000 t)

1,383

1,373

1,155


grade (%)

0.66

0.68

0.71

West

ore ('000 t)

-

-

69


grade (%)

-

-

0.72

Stepnoy

ore ('000 t)

875

784

845


grade (%)

0.77

0.85

0.80

Annensky

ore ('000 t)

865

877

856


grade (%)

0.75

0.71

0.84

Zhomart

ore ('000 t)

936

842

789


grade (%)

1.62

1.77

1.71






Complex total

ore ('000 t)

5,428

5,691

5,908

Complex average

grade (%)

0.86

0.88

0.87






Balkhash complex

Q1

2010

 

Q4

2009

 

Q1

2009

 

Konyrat

ore ('000 t)

-

-

-


grade (%)

-

-

-

Sayak I, III

ore ('000 t)

430

450

414


grade (%)

0.98

0.98

1.08

Shatyrkul

ore ('000 t)

132

140

132


grade (%)

2.26

2.19

2.26






Complex total

ore ('000 t)

562

590

546

Complex average

grade (%)

1.28

1.27

1.37

 



Kazakhmys Copper  Production Appendix

Copper MINing (CONTINUED)

East region

Q1

2010

 

Q4

2009

 

Q1

2009

 

Nikolayevsky

ore ('000 t)

147

143

100


grade (%)

1.34

1.14

2.55

Artemyevsky

ore ('000 t)

336

276

333


grade (%)

1.80

2.02

1.62

Irtyshsky

ore ('000 t)

118

120

127


grade (%)

1.50

1.53

1.50

Belousovsky

ore ('000 t)

-

-

-


grade (%)

-

-

-

Orlovsky

ore ('000 t)

417

399

406


grade (%)

3.56

4.47

4.43

Yubileyno-Snegirikhinsky

ore ('000 t)

153

141

154


grade (%)

3.77

3.40

3.10






Region total

ore ('000 t)

1,171

1,079

1,120

Region average

grade (%)

2.59

2.93

2.91






Karaganda region

Q1

2010

 

Q4

2009

 

Q1

2009

 

Nurkazgan (West, North)

ore ('000 t)

601

560

186


grade (%)

0.73

0.83

0.70

Akbastau

ore ('000 t)

-

-

-


grade (%)

-

-

-

Kosmurun

ore ('000 t)

-

-

-


grade (%)

-

-

-

Abyz

ore ('000 t)

139

78

-


grade (%)

1.81

1.70

-






Region total

ore ('000 t)

740

638

186

Region average

grade (%)

0.93

0.93

0.70






Total

ore ('000 t)

7,901

7,998

7,760

Average

grade (%)

1.15

1.19

1.20

 



Kazakhmys Copper Production Appendix

Copper PROCESSING


Q1

2010

 

Q4

2009

 

Q1

2009

 

Zhezkazgan complex





Copper concentrate

'000 t

115.3

122.1

128.0

Copper in concentrate

'000 t

41.6

44.6

45.2

Balkhash complex





Copper concentrate

'000 t

57.1

62.4

46.2

Copper in concentrate

'000 t

10.4

11.9

8.3

East region





Copper concentrate

'000 t

120.3

144.6

155.5

Copper in concentrate

'000 t

21.4

26.2

27.5

Karaganda region





Copper concentrate

'000 t

64.8

74.5

47.7

Copper in concentrate

'000 t

5.4

5.9

4.4






Total own processed





Copper concentrate

'000 t

357.5

403.6

377.5

Copper in concentrate

'000 t

78.8

88.6

85.4






Own ore processed by third parties





Copper concentrate

'000 t

8.1

8.9

8.1

Copper in concentrate

'000 t

2.2

2.4

2.0






Total own





Copper concentrate

'000 t

365.6

412.5

385.5

Copper in concentrate

'000 t

81.0

91.0

87.4






Purchased concentrate





Copper concentrate

'000 t

-

-

0.1

Copper in concentrate

'000 t

-

-

-






Total copper in concentrate

'000 t

81.0

91.0

87.4



Kazakhmys Copper Production Appendix

COPPER SMELTER / REFINERY - COPPER CATHODE PRODUCTION


Q1

2010

 

Q4

2009

 

Q1

2009

 

Zhezkazgan smelter





Own concentrate

'000 t

28.3

20.9

31.1

Purchased concentrate

'000 t

-

-

-

Sub - total

'000 t

28.3

20.9

31.1

Tolling

'000 t

-

-

-

Total including tolling

'000 t

28.3

20.9

31.1






Balkhash smelter





Own concentrate

'000 t

50.1

44.9

45.8

Purchased concentrate

'000 t

-

0.9

3.7

Sub - total

'000 t

50.1

45.8

49.5

Tolling

'000 t

-

0.1

-

Total including tolling

'000 t

50.1

45.9

49.5






Grand total

'000 t

78.4

66.8

80.6

 

 



Kazakhmys Copper Production Appendix

By-products Mining - ZINC

ZINC


Q1

2010

 

Q4

2009

 

Q1

2009

 

East region





Nikolayevsky

grade (%)

4.34

3.6

2.20

Artemyevsky

grade (%)

6.39

6.13

5.57

Irtyshsky

grade (%)

3.55

3.62

3.63

Belousovsky

grade (%)

-

-

-

Orlovsky

grade (%)

4.99

4.99

4.50

Yubileyno-Snegirikhinsky

grade (%)

3.17

2.53

2.63






Region average

grade (%)

4.93

4.63

4.26






Karaganda region





Kosmurun

grade (%)

-

-

-

Akbastau

grade (%)

-

-

-

Abyz

grade (%)

3.17

3.56

-






Region average

grade (%)

3.17

3.56

-






Overall average

grade (%)

4.74

4.56

4.26






Zinc in concentrate

('000 t)

39.5

40.5

39.8

Zinc metal

('000 t)

-

-

8.6

 



Kazakhmys Copper Production Appendix

By-products - SILVER

SILVER


Q1

2010

 

Q4

2009

 

Q1

2009

 

Zhezkazgan complex





North

grade (g/t)

2.96

9.15

11.77

East

grade (g/t)

14.0

20.41

17.98

South

grade (g/t)

16.92

20.39

19.02

West 

grade (g/t)

-

-

17.01

Stepnoy

grade (g/t)

15.14

18.14

7.68

Annensky

grade (g/t)

13.96

17.58

25.12

Zhomart

grade (g/t)

8.15

9.16

8.05






Region average

grade (g/t)

13.79

16.99

15.43






Balkhash complex





Konyrat 

grade (g/t)

-

-

-

Sayak I, III

grade (g/t)

4.10

5.01

5.52

Shatyrkul

grade (g/t)

2.39

2.21

2.79






Region average

grade (g/t)

3.70

4.34

4.86






East region





Nikolayevsky

grade (g/t)

35.34

29.83

28.35

Artemyevsky

grade (g/t)

105.34

122.21

101.22

Irtyshsky

grade (g/t)

55.38

65.37

59.24

Belousovsky

grade (g/t)

-

-

-

Orlovsky

grade (g/t)

63.05

61.14

66.20

Yubileyno-Snegirikhinsky

grade (g/t)

27.93

25.44

30.16






Region average

grade (g/t)

66.36

68.44

67.51






Karaganda region





Nurkazgan

grade (g/t)

1.80

2.05

1.99

Akbastau

grade (g/t)

-

-

-

Kosmurun

grade (g/t)

-

-

-

Abyz

grade (g/t)

41.45

38.13

-






Region average

grade (g/t)

9.23

6.43

1.99

Overall average

grade (g/t)

20.44

22.16

21.88






Silver in concentrate

('000 oz)

3,568

4,343

4,390

Own concentrate

('000 oz)

3,127

3,991

3,822

Own concentrate processed by 3rd parties

('000 oz)

441

392

568

Purchased concentrate

('000 oz)

-

(40)

-

Silver metal1

('000 oz)

3,127

3,698

4,437

                        1 Includes slimes from purchased concentrate.

Kazakhmys Copper Production Appendix

By-products - GOLD

 

GOLD


Q1

2010

 

Q4

2009

 

Q1

2009

 

Balkhash complex





Sayak I, III

grade (g/t)

0.23

0.30

0.44

Shatyrkul

grade (g/t)

0.47

0.36

0.44






Region average

grade (g/t)

0.29

0.31

0.44






East region





Nikolayevsky

grade (g/t)

0.35

0.27

0.41

Artemyevsky

grade (g/t)

1.34

1.17

1.34

Irtyshsky

grade (g/t)

0.32

0.33

0.40

Belousovsky

grade (g/t)

-

-

-

Orlovsky

grade (g/t)

1.10

0.98

0.89

Yubileyno-Snegirikhinsky

grade (g/t)

0.36

0.32

0.49






Region average

grade (g/t)

0.90

0.78

0.87






Karaganda region





Nurkazgan

grade (g/t)

0.25

0.26

0.19

Akbastau

grade (g/t)

-

-

-

Kosmurun

grade (g/t)

-

-

-

Abyz

grade (g/t)

4.44

5.77

-






Region average

grade (g/t)

1.03

0.93

0.19











Overall average

grade (g/t)

0.80

0.70

0.68






Gold in concentrate

('000 oz)

29.7

34.2

31.7

Own concentrate

('000 oz)

26.5

31.7

27.8

Own concentrate processed by 3rd parties

('000 oz)

3.2

 

2.9

3.9

Purchased concentrate

('000 oz)

-

(0.4)

-

Gold output1

('000 oz)

33.0

30.6

29.0

                         1Includes slimes from purchased concentrate.

 


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