3rd May 2006 07:02
Kazakhmys PLC03 May 2006 3 May 2006 Kazakhmys PLC Production Summary for the first quarter ended 31 March 2006 • Copper cathode production stood at 89.1 thousand tonnes with 405 thousand tonnes of total copper concentrate produced. • Copper cathode production was 6.6% lower than the same period in 2005 mainly due to some operational interruptions and adverse weather conditions experienced at the beginning of 2006. Ore extraction improved from March 2006 and this performance is expected to be reflected in improved copper cathode production in the second quarter of 2006. • Zinc metal production was up 6.4% at 18.2 thousand tonnes with 86.9 thousand tonnes of zinc concentrate produced. • Gold and silver production grew by 74.6% and 5.0% respectively year on year due to the silver and gold-rich ores from the Abyz mine. • The newly completed Artemyevskoe, Stepnoy and Abyz mines are performing well. Kazakhmys Group Copper Production--------------------------------- Q1 2006 Q1 2005 -------------------- Ore extraction '000 t 9,839 9,592 Average copper grade % 1.07 1.00 Average zinc grade % 3.98 3.28 Copper Concentrate '000 t 405 385 own concentrate '000 t 356 330 purchased concentrate '000 t 49 55 Copper in Concentrate '000 t 95.0 96.8 own concentrate '000 t 84.7 84.0 purchased concentrate '000 t 10.3 12.8 Copper Cathodes* '000 t 89.1 95.4 own concentrate '000 t 76.8 81.0 purchased concentrate '000 t 11.6 10.0 tolling concentrate '000 t 0.7 4.4Copper Rod '000 t 5.3 1.3-------------------------------------------------------------------------- *Includes copper used to produce copper rod In the first quarter of 2006, Kazakhmys PLC produced 89.1 thousand tonnes ofcopper cathode (of which 5.3 thousand tonnes were used to produce copper rods),a 7% decrease compared to the same period of 2005. This was primarily due tooperational interruptions at mines caused by adverse weather conditions at thebeginning of 2006 when the temperatures at certain locations in Kazakhstanremained below 400C for nearly two weeks. Copper cathode production volumesimproved significantly in March 2006 resulting in a 13.8% increase compared toMarch 2005 and 31% increase compared to February 2006. Overall in the firstquarter of 2006, 76.7 thousand tonnes of copper cathode were produced from theGroup's own concentrate, with 11.6 thousand tonnes from purchased concentrateand the remaining 0.7 thousand tonnes through tolling arrangements. Copper concentrate production in the first quarter of 2006 was 5.2% higher thanin the first quarter of 2005 due to the increasing contribution from the highergrade Stepnoy, Artemyevskoe and Abyz mines, commissioned in 2005. In the firstquarter of 2006 the Group produced 356 thousand tonnes of copper concentrate anda further 49 thousand tonnes of copper concentrate were purchased from thirdparties. The production volume expansion program at the Nurkazgan mine (Karagandacomplex) and the stripping works at the Zhaman-Aybat mine (Zhezkazgan complex)were successfully completed well ahead of schedule with the increasingcontribution from both mines expected in the second quarter of 2006. Kazakhmys Group by-products Production-------------------------------------- Q1 2006 Q1 2005 -------------------- Zinc Concentrate '000 t 86.9 58.8Zinc in Concentrate % 45.12 38.36Zinc in Concentrate '000 t 39.2 22.6Zinc metal '000 t 18.2 17.1 Silver '000 oz 5,249 4,997 own concentrate '000 oz 5,226 4,961 Tolling '000 oz 23 36 Gold '000 oz 35.1 20.1 own concentrate '000 oz 23.2 13.1 Tolling '000 oz 11.9 7.0------------------------------------------------------------------------- Zinc metal production in the first quarter of 2006 stood at 18.2 thousandtonnes, slightly higher than in the first quarter of 2005. Optimization of the smelter process and concentrate feed grade is expected to improve smelter productivity in the course of the year. Zinc concentrate production in the first quarter of 2006 was significantlyhigher year on year and increased 47.8% compared to the first quarter of 2005.This rise was due to the larger contribution from the zinc-rich ores ofArtemyevskoe mine that commenced operations in 2005. In the first quarter of 2006, the Group also produced 5.2 million ounces ofsilver and 35.1 thousand ounces of gold, which were 5% and 75% higherrespectively compared to the same period in 2005. Of the 35.1 thousand ounces ofgold produced in the period, 11.9 thousand ounces were produced under tollingarrangements. This increased gold production was the result of a larger orecontribution from the Abyz and Artemyevskoe mines that produce ores with highergold content. Zhezkazgan---------- Q1 2006 Q1 2005 -------------------- Ore extraction '000 t 6,824 6,759Average copper grade % 0.82 0.87 Copper Concentrate '000 t 139.5 145.4Copper Cathodes '000 t 51.7 57.9 of which tolling '000 t 0.3 --Copper Rod '000 t 5.3 1.3-------------------------------------------------------*Includes copper used to produce copper rod At the Zhezkazgan complex, copper cathode production was lower in the firstquarter of 2006, due to adverse weather conditions in the first two months of2006. Temperatures of below 400C lasting nearly two weeks caused someoperational interruptions at several mines, all of which have now been resolved. Copper rod production significantly increased from 1.3 thousand tonnes in thefirst quarter of 2005 to 5.3 thousand in the first quarter of 2006 due to highermarket demand. Balkhash-------- Q1 2006 Q1 2005 --------------------Ore extraction '000 t 1,021 1,391Average copper grade % 0.82 0.65Copper Concentrate '000 t 48.9 41.6Copper Cathodes '000 t 37.4 37.5of which tolling '000 t 0.4 4.3Copper Rod '000 t -- ---------------------------------------------------------- Copper concentrate and copper cathode production at the Balkhash complex in thefirst quarter of 2006 was higher than in the first quarter of 2005 primarily dueto higher copper grades, which overcompensated for lower ore extraction volumescaused by decreasing production at the Kounrad mine. East Region----------- Q1 2006 Q1 2005 -------------------- Ore extraction '000 t 1,361 1,152Average copper grade % 2.42 2.39Copper Concentrate* '000 t 132.1 134.5Copper Cathodes '000 t -- --Copper Rod '000 t -- ---------------------------------------------------------*Excludes concentrate processed by third parties In the first quarter of 2006, ore extraction at the East Region complexincreased by 18.1% compared to that of the first quarter of 2005, due to aramp-up of production at the Artemyevskoe mine. Despite the higher quantity ofmined ores and higher copper grades, copper concentrate production in the firstquarter of 2006 was slightly lower compared to the first quarter of 2005. Thiswas primarily due to minor transportation problems, which have now beenrectified. Karaganda Q1 2006 Q1 2005 -------------------- Ore extraction '000 t 633 290Average copper grade % 1.2 0.4Copper Concentrate '000 t 28.1 8.9Copper Cathodes '000 t -- --Copper Rod '000 t -- ----------------------------------------------------------- Ore extraction and copper concentrate production at the Karaganda complex minesin the first quarter of 2006 increased by 118% and 216% respectively year onyear. The ramp-up of production at the Abyz and Nurkazgan mines continues toperform in line with management expectations. The stripping works at theKosmurun mine were completed ahead of schedule and the mine is expected tocommence test production earlier than anticipated. Appendix 1 As announced on April 27, 2006, from now on the Group will report its productionresults on a four complex basis, in order to be aligned with the managementstructure of the business. This reporting change will introduce an additionalcomplex, at Karaganda, to the three complexes breakdown reported previously. TheKaraganda complex comprises the Abyz, Kosmurun and Nurkazgan mines and theKaragaily concentrator. All these operations are located in the vicinity ofKaraganda and therefore management is of the view that it is more appropriate toaccount for these operations as a separate complex. For the ease of comparison the first quarter 2006 production results in the oldreporting format are set out below: Zhezkazgan---------- Q1 2006 Q1 2005 -------------------- Ore extraction '000 t 6,824 6,759Average copper grade % 0.82 0.87 Copper Concentrate '000 t 139.5 145.4Copper Cathodes '000 t 51.7 57.9 Of which tolling '000 t 0.3 --Copper Rod '000 t 5.3 1.3-------------------------------------------------------- Balkhash-------- Q1 2006 Q1 2005 --------------------- Ore extraction '000 t 1,544 1,602Average copper grade % 0.95 0.61 Copper Concentrate '000 t 48.9 41.6Copper Cathodes '000 t 37.4 37.5 Of which tolling '000 t 0.4 4.4Copper Rod '000 t -- ---------------------------------------------------------- East Region----------- Q1 2006 Q1 2005 -------------------- Ore extraction '000 t 1,471 1,231Average copper grade % 2.34 2.3 Copper Concentrate* '000 t 160.2 143.3Copper Cathodes '000 t -- --Copper Rod '000 t -- --------------------------------------------------------- *Excludes concentrate processed by third parties For further information please contact: Jinsoo Yang, Head of IR Tel: +44 20 8636 7900Sergei Stephantsov, Deputy Head of IR +44 20 8636 7900Kazakhmys PLC Morgan Bone Tel: +44 20 7251 3801Robin WalkerFinsbury - 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 LLC Kazakhmys Corporation("Kazakhmys"). Based on 2004 production, the Group is the 10th largest producerof copper cathode and mined copper in the world. The Group's operations arevertically integrated. Kazakhmys operates 16 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:
KAZ.L