16th Dec 2005 14:00
Kazakhmys PLC16 December 2005 Friday 16 December 2005 Comments made by Mr. Vladimir Kim, Executive Chairman at the Annual General Meeting There is no doubt, that 2005 was a landmark year in the history of Kazakhmys - ayear of exceptional change. We successfully launched our shares on the LondonStock Exchange and, within less than three months of listing, we are nowentering the FTSE 100 index. Let me thank our employees as well as our advisers- without their hard work and commitment, this landmark transaction would nothave been possible. The success of our IPO reflects the fundamental attraction of investing inKazakhstan, a country exceptionally rich in natural resources. Kazakhmys plc iswell positioned to benefit from this mineral wealth. The recent re-election of Mr. Nazarbayev as President of Kazakhstan has meantthat we continue to operate in a stable political environment, and Kazakhstan'seconomy continues to thrive with an average annual GDP growth rate of 9% overthe last five years. Kazakhmys is actively planning for the future both by furthering existingdevelopment projects such as Aktogay and by considering opportunities todiversify into other commodities within our region. Given the strength of ourbalance sheet and our strong cash flow profile, we are well placed to makeacquisitions in the region where we can find value adding opportunities. Before I come to the attractive growth opportunities for Kazakhmys, I would liketo refer to some important operational achievements of 2005. Despite a moredifficult operating environment, which included a temporary mine stoppage at theNikolaevskoe mine in the first quarter of 2005 and planned extraction andprocessing of lower grades ores from some of our mines, in the first nine monthsof 2005, Kazakhmys produced 301.1 thousand tonnes of copper cathode of which 7.1thousand tonnes were used to produce copper rod. With regards to zinc,production volumes for the first nine months of 2005 were at just over 38,000tonnes, somewhat below our expectations. This was due to an extended ramp upperiod for the smelter which resulted in varying quality and volumes of smelteroutput. Full operating capacity is expected to be reached during 2006. A fullproduction report for the first nine months of the year will be publishedseparately on Monday, December 19 2005. In the second half of 2005, we continued with site preparation and landdevelopment works on the Aktogay project. We expect to start full constructionworks in 2006 as per the original schedule. The construction works at theArtemyevskoe mine were completed several months ahead of schedule. Artemyevskoehas a planned average annual production of circa 28,000 tonnes of copper and98,000 tonnes of zinc and an expected mine life of 22 years. We have alsocontinued with our expansion and development program for a number of existingmining operations to achieve our target of gradual copper production growth inthe short-to-medium term. At the time of the IPO, we announced the appointment of highly regarded andexperienced non-executive Directors to help create a first class Board. At thattime, we also made clear our intention to appoint another board member who willact as a senior independent non-executive Director and an announcement to thateffect will be made in due course. I would like to take this opportunity tothank the entire Board, which has worked effectively and closely with managementsince the IPO in establishing best practice. Kazakhmys' Board believes that effective governance structures and proceduresare essential to the long-term sustainability of its business. In listing on theLondon Stock Exchange, we did so in full knowledge of and with the firmintention of complying with the relevant regulatory and governance requirements.We are determined to run our business in a way which is in line with bestpractice for a UK plc. As laid out at the time of the IPO, we remain committed to improve the safetyenvironment across our asset portfolio. The Group has created a Health & Safetycommittee headed by our non-executive director David Munro. We are alsodelivering on our commitment to the broader community and environment. Following our listing, Kazakhmys is well placed to pursue its long-term goals.Our strategic objective remains to maintain and strengthen our position as aleading copper producer and to achieve growth as a natural resources group anddeliver shareholder value. In the past few months we have been operating in an environment of attractivecopper prices. Supply and demand fundamentals suggest continued copper pricestrength for the coming months. We remain optimistic about China's growthprospects and its continued demand for copper in particular. We expect copperprices to remain high by historical standards, although it would not beunreasonable to expect that prices could ease from their current highs.Supported by continuing strength in commodity prices we expect to deliver asolid financial performance for the year. I would like to thank all shareholdersone who have supported our London listing and look forward to your continuedsupport. For further information please contact: Jinsoo Yang, Head of IR Tel: +44 20 8636 7900Sergei Stephantsov, Deputy Head of IRKazakhmys PLC Morgan Bone Tel: +44 20 7251 3801Robin WalkerFinsbury Notes to Editor Kazakhmys'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 LLC Kazakhmys Corporation. Basedon 2004 production, the Group is the 10th largest producer of copper cathode andmined copper in the world. The Group's operations are vertically integrated.Kazakhmys operates 16 open pit and underground mines and two smelting andrefining complexes in the Republic of Kazakhstan. Kazakhmys also ownssignificant rail infrastructure in Kazakhstan and MKM, a copper productsfabrication company in Germany. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
KAZ.L