30th Apr 2007 07:05
Kazakhmys PLC30 April 2007 30th April 2007 Kazakhmys PLC Production Summary for the first quarter ended 31 March 2007 • In the quarter ended 31 March 2007, copper cathode production, excluding copper produced through tolling arrangements, grew by 12 per cent and copper in concentrate production increased by 10 per cent, compared to the first quarter of 2006. Copper cathode produced from own concentrate increased by 9 per cent over the same period as a result of increasing production from the recently commissioned Artemyevskoe, Zhomart and Kosmurun mines. • Zinc in concentrate production was 2 per cent lower due to lower production at the Nikolayevskoe mine following land slips that occurred in the second quarter of 2006 and the absence of production at the Abyz mine, which was closed for major stripping works in the fourth quarter of 2006. Zinc metal production was 18 per cent lower compared to the first quarter of 2006 as more zinc concentrate was allocated for sale rather than for further processing into zinc metal. Zinc ore extraction at the Kosmurun mine commenced in January 2007 and has been stockpiled to be processed in the second quarter once the Karagaily concentrator upgrade is completed. • Own gold and silver production decreased by 17 and 4 per cent, respectively, compared to the levels achieved in the first quarter of 2006. The decrease in refined gold production was the result of a delay in the processing of concentrate with high precious metals content. This concentrate was processed late in March and charged to work-in-progress at the quarter end. Copper Kazakhmys Group Copper Production Q1 2007 Q1 2006----------------------------------------------------Ore extraction '000 t 8,931 9,839Average copper grade % 1.25 1.07Average zinc grade* % 3.71 3.98 Copper in Concentrate '000 t 104.7 95.0own concentrate '000 t 93.5 84.7purchased concentrate '000 t 11.2 10.3 Copper Cathodes** '000 t 99.7 89.1own concentrate '000 t 83.8 76.8purchased concentrate '000 t 15.3 11.6tolling concentrate '000 t 0.6 0.7Copper Rod '000 t 9.0 5.3---------------------------------------------------- * Complex ores only ** Includes copper used to produce copper rod In the first quarter of 2007, the Group produced 99.7 thousand tonnes of coppercathode (of which 9.0 thousand tonnes were used to produce copper rods), a 12per cent increase compared to the first quarter of 2006. Copper cathodeproduction from own concentrate increased by 9 per cent compared to the sameperiod of 2006, and amounted to 83.8 thousand tonnes. Production through tollingarrangements decreased from 0.7 to 0.6 thousand tonnes. The increased production volume from own concentrate was primarily the result ofimproved copper grades, which rose from 1.07 to 1.25 per cent compared to thefirst quarter of 2006, partly driven by output from the newer mines (Zhomart andKosmurun mines) whose copper content in ore is higher than the Group's average. By-products Kazakhmys Group By-products Production Q1 2007 Q1 2006----------------------------------------------------Zinc in Concentrate '000 t 38.6 39.2Zinc Metal '000 t 14.9 18.2---------------------------------------------------- Silver '000 oz 5,022 5,249 own production '000 oz 5,017 5,226 tolling '000 oz 5 23---------------------------------------------------- Gold '000 oz 34.0 35.1 own production '000 oz 19.2 23.2 tolling '000 oz 14.8 11.9---------------------------------------------------- Zinc metal production in the first quarter of 2007 was 14.9 thousand tonnes, an18 per cent decrease from the 18.2 thousand tonnes produced in the correspondingperiod of 2006. The drop in production was the result of lower throughputcapacity, caused by ongoing technical issues at the Balkhash zinc plant. As a result, more zinc concentrate was allocated for sale, rather than for processinginto zinc metal. Consequently, zinc metal production for 2007 is expected to maintain levels similar to 2006. Meanwhile, zinc in concentrate production was 38.6 thousand tonnes (as compared to 39.2 thousand tonnes in the Q1 2006), mainly due to lower production at the Nikolayevskoe mine following the land slips which occurred in the second quarter of 2006 and the planned closure of the Abyz mine for major stripping works, which, as stated previously, are expected tobe continued throughout 2007. The lower output from these mines was largely offset by an increasing contribution from the Artemyevskoe mine where zinc grades inextracted ores exceeded 5 per cent per tonne and ore production increased byalmost 150 thousand tonnes compared to the first quarter of 2006. Zinc ore extraction from the Kosmurun mine, which commenced in January 2007, wasstockpiled and will be processed in the second quarter of 2007 once theKaragaily concentrator upgrade is completed. In the first quarter of 2007, the Group also produced 5.0 million ounces ofsilver and 34.0 thousand ounces of gold, a decrease of 4 and 3 per centrespectively, compared to the first quarter of 2006. Of the 34.0 thousand ouncesof gold produced, 19.2 thousand ounces represented own production, a 17 per centdecrease compared to the first quarter of 2006. The main reason for thisreduction in gold production was an increase in work-in-progress by 13.4thousand ounces compared to the beginning of the year resulting from delays inthe processing of the concentrate from the Artemyevsky mine. The suspension ofore extraction at the Abyz mine for stripping works was offset by increasingproduction at the Nurkazgan and Kosmurun mines. Silver production was slightlybelow the level achieved in the first quarter of 2006 as a result of decreasedoutput at the Zhezkazgan and East region mines. Of the 5.0 million ounces ofrefined silver, production under tolling arrangements represented only 5thousand ounces compared to 23 thousand in the first quarter of 2006. Review by region Zhezkazgan Complex Q1 2007 Q1 2006----------------------------------------------------Ore extraction '000 t 6,300 6,824Average copper grade % 0.83 0.82---------------------------------------------------- Copper Concentrate '000 t 120.8 139.5Copper in Concentrate '000 t 46.5 49.2Copper Cathodes* '000 t 49.9 51.7of which tolling '000 t -- 0.3Copper Rod '000 t 9.0 5.3---------------------------------------------------- * Includes copper used to produce copper rod In the first quarter of 2007, ore extraction and copper cathode production atthe Zhezkazgan complex decreased by 8 per cent and 3 per cent, respectively,compared to the first quarter of 2006, primarily due to lower ore productionvolumes at: the Annensky mine caused by delays in installing ore transportationequipment in the mining areas; the Stepnoy mine where repairs to the mineshaftlifting equipment were carried out; and the Zhomart mine where conveyor equipmentfor ore extraction was installed. The lower ore extraction volume was partiallyoffset by higher grades from the Zhomart mine, which contributed to a marginallyhigher average copper grade being achieved in Zhezkazgan this quarter. Copper rod production in the first quarter of 2007 increased to 9.0 thousandtonnes from 5.3 thousand tonnes produced in the first quarter of 2006,reflecting continued strong demand for copper rod from Chinese customers. Balkhash Complex Q1 2007 Q1 2006----------------------------------------------------Ore extraction '000 t 490 1,021Average copper grade % 1.25 0.82---------------------------------------------------- Copper Concentrate '000 t 41.2 48.9Copper in Concentrate '000 t 7.6 9.4Copper Cathodes '000 t 49.9 37.4of which tolling '000 t 0.6 0.4Copper Rod '000 t -- ------------------------------------------------------ At the Balkhash complex, ore extraction volumes in the first quarter of 2007decreased by 52 per cent compared to the first quarter of 2006, due to atemporary halt in production at the Kounrad mine for stripping works which willcontinue into the second quarter of 2007. Ore production volumes were alsomarginally lower at the Sayak mine due to problems with mining equipment. Decreasedproduction volumes of low copper grade ores at the Kounrad mine allowedsignificant growth in the average ore grade at the Balkhash complex rising from0.82 per cent to 1.25 per cent quarter on quarter. Copper cathode production inthe first quarter of 2007 was 33 per cent higher than in the correspondingperiod of 2006 due to increased processing volumes of copper concentrate fromthe Karaganda region and the procuring of third party purchased concentratecarried forward from the fourth quarter of 2006. East Region Q1 2007 Q1 2006----------------------------------------------------Ore extraction '000 t 1,146 1,361Average copper grade % 2.69 2.42 Copper Concentrate* '000 t 126.2 132.1Copper in Concentrate '000 t 23.7 23.5Copper Cathodes '000 t -- --Copper Rod '000 t -- ------------------------------------------------------* Excludes concentrate processed by third parties In the first quarter of 2007, ore extraction volumes in the East Region were 16per cent lower than in the same period of 2006 primarily due to lower productionvolumes at the Nikolayevskoe mine where production was switched from open pit tounderground mining following a number of land slips during 2006. This waspartially offset by an increasing contribution from the ramp up of theArtemyevskoe mine. Copper in concentrate production was at a level similar tothat in the first quarter of 2006 due to the average copper grade increasing inthe region from 2.42 to 2.69 per cent, driven by higher copper grades at theArtemyevskoe and Orlovskoe mines, where grades increased from 1.66 to 1.70 percent and from 4.27 to 4.54 per cent, respectively. Karaganda Region Q1 2007 Q1 2006----------------------------------------------------Ore extraction '000 t 995 633Average copper grade % 2.27 1.23---------------------------------------------------- Copper Concentrate '000 t 79.2 28.1Copper in Concentrate '000 t 12.6 0.9Copper Cathodes '000 t -- --Copper Rod '000 t -- ------------------------------------------------------ Ore extraction at the Karaganda Region in the first quarter of 2007 was 57 percent higher than in the first quarter of 2006, as a result of growing productionvolumes from the Kosmurun and Nurkazgan mines. Due to a larger contribution fromthe high copper grade ores of the Kosmurun and Nurkazgan mines (4.18 per centand 1.18 per cent, respectively), the average copper grade for Karaganda regionin the first quarter of 2007 increased from 1.23 to 2.27 per cent compared tothe same period of 2006, which in turn drove the significant increase in copperin concentrate production. For further information please contact: Jinsoo Yang, Head of Investor RelationsSergei Stephantsov, Deputy Head of Investor RelationsKazakhmys PLC Tel:+44 20 7901 7800 Robin WalkerFinsbury Tel:+44 20 7251 3801 - ends - Notes to Editors The principal business of Kazakhmys plc ("the Group") is the mining, processing,smelting, refining of copper and copper products, including copper cathode andcopper rod. The Group's operations are vertically integrated. Kazakhmys operates19 open pit and underground mines and two smelting and refining complexes in theRepublic of Kazakhstan. Kazakhmys also owns significant rail infrastructure inKazakhstan and MKM, a copper products fabrication company in Germany. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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