LONDON, Jan 28 (Reuters) - Kazakh copper producer Kazakhmys (KAZ.L) forecast no output growth this year after shutting mines to save cash in 2009 and seeing fourth-quarter production slide by 25 percent.
Investors will have to wait until at least 2011 for the company's growth projects to lift output. It sealed a deal last year for $2.7 billion in financing for expansion projects.
The London-listed company said in a production report on Thursday it slightly exceeded its 2009 output target of 315,000 tonnes of copper cathode, coming in with 320,400 tonnes, but this was a 6.6 percent fall from the previous year.
Analysts said the production data was largely in line with expectations. The shares were up 1.4 percent at 1283 pence at 1128 GMT, outperforming a 0.4 percent rise in the UK mining index .
Kazakhmys was the best performing stock of the blue-chip FTSE 100 .FTSE last year, surging 475 percent.
Credit Suisse analyst Liam Fitzpatrick reiterated an "outperform" rating and a target of 1270 pence, saying the 2010 price earnings ratio of 8.0 was a discount to the firm's global peers.
Kazakhmys, the world's eighth largest copper producer, suspended output at four high-cost mines last year to save cash during the economic downturn, which hammered copper prices.
The mines are not due to be restarted in the near-term and the company does not have the stockpiles to sell in 2010 like it did last year, which allowed an upgrade of the annual cathode target from an initial 300,000 tonnnes.
"In 2010 ore output will be maintained at a similar level to 2009 and the target for cathode production will therefore again be just over 300,000 tonnes," Chief Executive Oleg Novachuk said.
Production of copper cathodes from its own concentrate decreased to 68,100 tonnes in the three months to the end of December from 91,300 tonnes in the previous year.
Part of the decline was due to maintenance work on smelters and rebuilding inventories after depleting them earlier in the year, so first quarter 2010 cathode production should improve, said John Smelt, head of corporate communications.
However, it will take longer for growth projects to make an impact on production.
The Bozymchak gold/copper mine is due to launch production in 2011 and the bigger Boschekul mine is set to start up in 2013 or 2014.
Kazakhmys posted a sharp fall in first-half profit due to weaker copper prices, but the decline was less than expected.
Copper prices MCU3 recovered in the second half of last year, ending the year at more than double the level at the start.
Kazkhmys is the largest shareholder in Kazakh rival ENRC (ENRC.L) and an official told Reuters last week that the firm had no current plans to exit its 26 percent stake.