30th Oct 2006 07:02
Kazakhmys PLC30 October 2006 30 October 2006 Kazakhmys PLC Production Summary for the third quarter ended 30 September 2006 • Copper cathode production grew by 9 per cent and copper in concentrate production increased by 4 per cent, compared to the second quarter of 2006. Copper cathode produced from own copper concentrate increased by 5 per cent over the same period. • Zinc metal production was 22 per cent lower compared to the second quarter, primarily due to technical issues associated with the coolers at the Balkhash zinc plant, which are exacerbated in hot summer months. Zinc in concentrate production rose by 17 per cent due to an improved operational performance of the Artemyevskoe mine. • Gold and silver production from own concentrate was 16 per cent and 3 per cent lower respectively, compared to the second quarter of 2006. This was largely due to lower production volumes from the Abyz mine where scheduled stripping works were conducted throughout the quarter. Copper Kazakhmys Group Copper Production 9m 9m Q3 Q2 Q3 2006 2005 2006 2006 2005---------------------------------------------------------------------------------Ore extraction '000 t 30,255 29,189 10,128 10,289 9,731average copper grade % 1.12 1.03 1.16 1.13 1.04average zinc grade % 4.23 3.07 4.75 4.03 3.23 Copper in Concentrate '000 t 314.0 296.5 111.4 107.6 96.1own concentrate '000 t 283.6 255.9 100.1 98.7 83.3purchased concentrate '000 t 30.5 40.5 11.3 8.9 12.8 Copper Cathodes* '000 t 295.2 294.1 107.3 98.8 94.4own concentrate '000 t 265.5 247.7 96.5 92.2 80.4purchased concentrate '000 t 28.1 37.9 10.6 5.9 12.3tolling concentrate '000 t 1.7 8.5 0.3 0.7 1.8Copper Rod '000 t 22.4 7.1 8.1 9.0 1.2--------------------------------------------------------------------------------- *Includes copper used to produce copper rod In the third quarter of 2006, the Group produced 107.3 thousand tonnes of coppercathode (of which 8.1 thousand tonnes were used to produce copper rods), a 9 percent increase compared to the second quarter of 2006. Copper cathode productionfrom own concentrate increased by 5 per cent compared to the second quarter, andamounted to 96.5 thousand tonnes reflecting a better performance of the EastRegion mines. Copper cathode production through tolling arrangements decreasedfrom 0.7 to 0.3 thousand tonnes. The increased production volume was primarilythe result of higher copper grades, which increased from 1.13 to 1.16 per centcompared to the second quarter of 2006, an improved performance of the EastRegion mines, as well as the increased volume of purchased concentrate. By-products Kazakhmys Group By-products Production 9m 9m Q3 Q2 Q3 2006 2005 2006 2006 2005--------------------------------------------------------------------------------Zinc in Concentrate '000 t 107.1 61.2 36.6 31.3 18.9Zinc Metal '000 t 45.9 38.2 12.1 15.6 9.6 Silver '000 oz 15,993 15,455 5,301 5,443 4,817own concentrate '000 oz 15,954 15,405 5,295 5,433 4,811tolling '000 oz 39 51 6 10 6 Gold '000 oz 120.6 102.1 42.9 42.7 39.3own concentrate '000 oz 79.2 73.2 25.6 30.4 26.5tolling '000 oz 41.4 28.9 17.3 12.3 12.8-------------------------------------------------------------------------------- Zinc metal production in the third quarter of 2006 was 12.1 thousand tonnes incomparison to 15.6 thousand tonnes in the second quarter of 2006 due totechnical issues with the zinc plant coolers, which were not coping fully withthe high summer temperatures. Rectifications to the cooling system are currentlyunderway to increase cooling capacity. In the meantime, lower temperatures inthe autumn and winter months will have a positive effect on productivity; infact, in September 2006, zinc metal production increased by 31 per cent comparedto August 2006. Zinc in concentrate production was up by 17 per cent compared tothe second quarter of 2006, primarily due to higher contribution from thezinc-rich ores of the Artemyevskoe mine. In the third quarter of 2006, the Group produced 5.3 million ounces of silverand 42.9 thousand ounces of gold, in both cases similar volumes compared to thesecond quarter of 2006. Of the 42.9 thousand ounces of gold produced, 25.6thousand ounces were produced from own concentrate (a 16 per cent decreasecompared to the second quarter of 2006). The decrease in gold production fromown concentrate was caused primarily by lower production volumes from the Abyzand Kosmurun mines, where scheduled stripping works were conducted throughoutthe quarter, and partially due to longer lead times in transporting sludgesupplies through the pipeline from the Balkhash smelter to the precious metalsrefinery caused by some malfunctioning in the pumps. The stripping works at theAbyz mine should continue into the early months of 2007. Of the 5.3 millionounces of refined silver, production under tolling arrangements represented only6 thousand ounces. Review by region Zhezkazgan 9m 9m Q3 Q2 Q3 2006 2005 2006 2006 2005--------------------------------------------------------------------------------Ore extraction '000 t 21,120 20,661 7,071 7,226 6,910Average copper grade % 0.81 0.88 0.79 0.82 0.86Copper Concentrate '000 t 412.2 442.9 132.1 140.7 143.1Copper in '000 t 149.6 160.3 48.7 51.7 52.0ConcentrateCopper Cathodes* '000 t 165.6 170.6 59.8 54.1 52.7of which tolling '000 t 0.5 0.1 0.2 0.3 --Copper Rod '000 t 22.4 7.1 8.0 9.0 1.2-------------------------------------------------------------------------------- *Includes copper used to produce copper rod In the third quarter of 2006, copper cathode production at the Zhezkazgancomplex was over 10 per cent higher than in the second quarter of 2006, due toprocessing of larger volumes of copper in work-in-progress carried forward fromthe previous quarter and higher volumes of purchased concentrate. The Zhezkazgancomplex produced 6 per cent less copper in concentrate than in the secondquarter primarily due to roof fall in the overlapping East and Annensky mines.This did not result in any causalities or significant damage to theequipment but affected average ore grades for the period, whichwent down from 0.82 to 0.79 per cent compared to the second quarter of 2006. Copper rod production in the third quarter remained in line with the secondquarter of 2006 following continued strong customer demand in the Chinesemarket. Balkhash 9m 9m Q3 Q2 Q3 2006 2005 2006 2006 2005---------------------------------------------------------------------------------Ore extraction '000 t 3,538 4,260 1,252 1,266 1,437Average copper grade % 0.78 0.72 0.72 0.81 0.75Copper Concentrate '000 t 205.2 139.7 72.1 84.2 50.2Copper in '000 t 34.6 25.4 10.3 14.9 8.9ConcentrateCopper Cathodes '000 t 128.6 123.5 47.5 44.7 41.7of which tolling '000 t 1.0 8.4 0.1 0.7 1.8Copper Rod '000 t -- -- -- -- ----------------------------------------------------------------------------------- At the Balkhash complex, copper cathode production in the third quarter was 6per cent higher than in the second quarter due to processing of larger volumesof the copper work-in-progress carried forward from the previous quarter andhigher volumes of purchased concentrate. Copper in concentrate production in thethird quarter was lower than in the second quarter of 2006 due to decrease ofore grades from 0.81 to 0.72 per cent. This decrease in average ore grades wascaused by lower grade at the Sayak and Shatyrkul mines due to dilution of ore bybarren rocks and lower than anticipated grades at Kounrad mine. East Region 9m 9m Q3 Q2 Q3 2006 2005 2006 2006 2005--------------------------------------------------------------------------------Ore extraction '000 t 3,393 3,685 1,075 957 1,257average copper grade % 2.78 2.31 3.09 2.92 2.31Copper Concentrate* '000 t 259.5 241.2 127.4 132.1 106.7Copper in '000 t 74.1 63.6 26.5 24.1 19.0ConcentrateCopper Cathodes '000 t -- -- -- -- --Copper Rod '000 t -- -- -- -- ---------------------------------------------------------------------------------- *Excludes concentrate processed by third parties In the third quarter of 2006, copper concentrate production at the East Regioncomplex was 4 per cent lower compared to the second quarter of 2006. However,higher copper grade ores from the recently commissioned mines led to an increaseof 10 per cent in copper in concentrate production in the third quarter comparedto the second quarter of 2006. Karaganda 9m 9m Q3 Q2 Q3 2006 2005 2006 2006 2005--------------------------------------------------------------------------------Ore extraction '000 t 2,204 582 730 825 165average copper grade % 2.13 0.81 2.72 2.28 1.61Copper Concentrate '000 t 136.9 81.7 65.7 43.2 43.2Copper in '000 t 18.0 2.3 11.6 5.5 1.4ConcentrateCopper Cathodes '000 t -- -- -- -- --Copper Rod '000 t -- -- -- -- ---------------------------------------------------------------------------------- Ore extraction at the Karaganda complex in the third quarter of 2006 was 12 percent lower than in the second quarter of 2006 primarily due to mining operationsat the Abyz mine being restricted by scheduled stripping works which areexpected to continue into the earlier months of 2007. Lower production at theKosmurun mine due to scheduled stripping works and whilst ore inventory wascleared, also contributed to lower ore extraction. For further information please contact: Jinsoo Yang, Head of Investor Relations Tel: +44 20 7901 7800Sergei Stephantsov, Deputy Head of Investor RelationsKazakhmys PLC Robin Walker Tel: +44 20 7251 3801Finsbury - ends - Notes to Editors The Group's principal business is the mining, processing, smelting, refining andsale of copper and copper products, including copper cathode and copper rod, andis carried on by the Company's main subsidiary Kazakhmys Corporation LLC("Kazakhmys"). Based on 2005 production, the Group is the 10th largest producerof copper cathode and mined copper in the world. The Group's operations arevertically integrated. Kazakhmys operates 19 open pit and underground mines andtwo smelting and refining complexes in the Republic of Kazakhstan. Kazakhmysalso owns significant rail infrastructure in Kazakhstan and MKM, a copperproducts fabrication company in Germany. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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