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Kazakhmys 2Q Copper Cathode Output +10%; To Meet Target
Jul 30,2010 08:55CST
industry news

July 29, LONDON -(Dow Jones)- London-listed copper miner Kazakhmys PLC (KAZ.LN) Thursday reported a 9.6% rise in copper cathode production from its own concentrate during the second quarter compared to the first quarter and confirmed it's on track to achieve its full year output target.

Copper cathode production from its own copper concentrate was 85,900 metric tons during the three months to June 30, compared with 78,400 tons in the first quarter and 88,200 tons in the second quarter of the previous year, Kazakhstan's biggest copper miner said.

"Mining, processing and smelting have all met, or exceeded targets, and we remain on track for our anticipated annual production of at least 300,000 tons of copper cathode," said Oleg Novachuk, company Chief Executive Officer. "Customer demand remains firm for our metals and our objective will be to maintain our operational consistency in the second half of 2010," he added.

At 0841 GMT, Kazakhmys' shares were up 23 pence or 1.9% at 1220p while the rest of the FTSE-100 index was trading at 0.7%.

Kazakhmys' production is "humming along well," said Anindya Mohinta of Citigroup. The company reported "a steady and stable set of first half production numbers" with copper production 11% higher than Citi's estimates.

The FTSE-100 miner was able to increase copper cathode production on a quarterly basis by boosting ore extraction volumes by 5.5% to 8.34 million tons in the second quarter compared with the first quarter. This was a despite a decline in the average copper grade to 1.12% from 1.15% during the period.

Copper cathode production fell compared with the same quarter a year-ago because the company was focused last year on reducing its concentrate stockpile to generate cash during the global economic downturn, according to John Smelt, head of the company's investor relations.

Smelt said concentrate stockpiles were significantly reduced during the first half of last year. As result most of the copper cathode output in the first half came from ore mined in the same period, he said.

Kazakhmys' smelting operations continued to operate at full capacity during the first half although one of two furnaces at Zhezkazgan was taken offline for maintenance as the other returned to operation following refurbishment.

Copper accounted for 63% of the company's 2009 earnings before interest, taxes, depreciation and amortization, or Ebitda. Kazakhmys also produces gold, zinc and silver, as well as electricity at the country's biggest power station.

Zinc in concentrate production rose nearly 5% to 41,400 tons in the second quarter compared with the first quarter and was up nearly 6% in the first half at 80,900 tons due to higher grades in the East Region and higher recoveries overall.

Meanwhile silver from its own production rose about 14% to 3.57 million troy ounces and gold from its own production fell 10% to 29,400 ounces in the second quarter compared with the first quarter.

Electricity generation fell 16% to 2.45 terrawatt hours in the second quarter compared to the first quarter. 

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