31st Jul 2007 07:01
Kazakhmys PLC31 July 2007 31 July 2007 Kazakhmys PLC Production Summary for the half year and second quarter ended 30 June 2007 - Total copper cathode production reached 190,428* tonnes for the first six months of 2007, 2% higher than the same period of 2006.- During the second quarter of 2007, output was lowered to 91,342* tonnes following maintenance work at the Balkhash and Zhezkazgan smelters. - Zinc in concentrate production was 71,219 tonnes over the first six months, an increase of 1% compared to the first six months of 2006.- Q2 2007 zinc in concentrate production was 4% higher than the corresponding period in 2006. - Gold and silver production from own concentrate declined by 4% and 5%, respectively, compared to the first six months of 2006.- Q2 gold and silver production from own material was 6% higher and 6% lower, respectively, compared to the corresponding period in 2006. Gold production benefited from the processing of stockpiled material. Oleg Novachuk, Chief Executive Officer, said, "Copper production was maintainedat a steady level over the past six months, through hard work and carefulmanagement, in spite of some challenging operational conditions. I am confidentthat, as set out in our full year results, we remain on target to deliverslightly higher copper production in 2007 compared to last year". * Excludes tolled material For further information please contact: John Smelt, Head of Corporate Communications Tel:+44 20 7901 7882 Tel:+44 787 964 2675Sergei Stephantsov, Investor Relations Manager Tel:+44 20 7901 7814Kazakhmys PLC Robin WalkerZoe WattFinsbury Tel:+44 20 7251 3801 Copper Kazakhmys Group Copper Production 6m 6m Q2 Q1 Q2 2007 2006 2007 2007 2006---------------------------------------------------------------------------------Ore extraction '000 t 17,994 20,127 9,063 8,931 10,287Average copper grade % 1.21 1.10 1.18 1.25 1.14Average zinc grade* % 3.69 4.00 3.67 3.71 4.03 Copper in Concentrate '000 t 201.5 202.6 96.8 104.7 107.6own concentrate '000 t 182.8 183.4 89.3 93.5 98.7purchased concentrate '000 t 18.7 19.2 7.5 11.2 8.9 Copper Cathodes** '000 t 191.2 187.9 91.5 99.7 98.8own concentrate '000 t 163.5 169.0 79.7 83.8 92.2purchased concentrate '000 t 26.9 17.5 11.6 15.3 5.9tolling concentrate '000 t 0.8 1.4 0.2 0.6 0.7Copper Rod '000 t 18.0 14.3 9.0 9.0 9.0 * Complex ores only** Includes copper used to produce copper rod Ore extraction in Q2 2007 was slightly higher than in the previous quarter,though below the levels of 2006. This was principally due to the lack of outputfrom the Kounrad mine in the Balkhash region, due to planned stripping worksand anticipated lower production at Annenskoe mine in the Zhezkazgan region.Output in the Karaganda and East regions was stable over the quarter, withKaraganda maintaining its strong improvement over the half year compared to2006. The availability of machinery, mentioned in the Q1 production report, andpartly a consequence of high global mining and infrastructure activity, had animpact at several operations. The required equipment, including trucks andexcavators, is arriving and should be brought into operation over the secondhalf of the year. The majority of the Zhezkazgan mines are at or nearing a mature stage and as aresult, considerable work is required in efficiencies and expansions tomaintain current output levels. In the medium term this will be balanced by anincrease in production volumes at the East region mines. Lower ore output was largely offset by better ore grades, with the continuingbenefit of new higher grade mines, such as Zhomart in Zhezkazgan, Artemyevskoein the East, and Kosmurun in Karaganda. This is reflected in the relativelystable output of copper in concentrate from own material, compared to the sameperiod of 2006. This has now reached a steady state and these new mines areunlikely to show a continuing impact on the Group's average copper grade goingforwards. Production of copper cathode in the first six months of 2007 was 2% higher thanthe same period of 2006, though Q1 2006 was affected by severe weatherconditions. Cathode output in Q2 2007, at 91,342 tonnes (excluding tolledmaterial), was reduced by maintenance shutdowns at both the Zhezkazgan andBalkhash smelters. Both smelters are now fully operational, though there may bea further 10 day maintenance shutdown during the second half at the smelter inZhezkazgan. By-products Kazakhmys Group By-products Production 6m 6m Q2 Q1 Q2 2007 2006 2007 2007 2006---------------------------------------------------------------------------------Zinc in Concentrate '000 t 71.2 70.6 32.6 38.6 31.3Zinc Metal '000 t 27.4 33.8 12.5 14.9 15.6 Silver '000 oz 10,111 10,692 5,089 5,022 5,443own production '000 oz 10,104 10,660 5,087 5,017 5,433tolling '000 oz 7 32 2 5 10 Gold '000 oz 70.6 77.7 36.6 34.0 42.7own production '000 oz 51.4 53.6 32.2 19.2 30.4tolling '000 oz 19.2 24.2 4.4 14.8 12.3 Zinc in concentrate production rose slightly over the first six months comparedto 2006. Production of 32,629 tonnes in Q2 was similar to the same period lastyear, but below Q1 2007 due to lower volumes of zinc containing ores beingextracted in the East region. Due to machinery shortages, which are now improving, the Orlovskoe mine operatedat reduced capacity. Orlovskoe is a rich zinc source with an average zinc gradefor the period of 4.23%. Part of the ore extracted at Kosmurun mine has beenstockpiled and will be processed in the second half of 2007, when the Karagailyconcentrator upgrade is completed. Zinc metal output is slightly below theannualised capacity of 60,000 tonnes, which may be balanced by greater output inthe second half, though with the relative attractiveness of concentrate prices,material is being sold as concentrate and not stockpiled. In the second quarter of 2007, the Group produced 5.1 million ounces of silverand 36,591 ounces of gold, an increase of 1% and 8%, respectively, compared tofirst quarter of 2007. Of the 36,591 ounces of gold produced, 32,203 ounces wereproduced from own concentrate, a 68% increase compared to the first quarter of2007. This increased gold production was the result of processing concentratestockpiled from the Artemyevskoe mine, mentioned in the Q1 production report. Q22007 gold production was lower than in the corresponding period of 2006 as therewas no production at the Abyz mine, which has been closed for planned strippingworks since October 2006 and will remain in stripping at least through 2008 andlower production from tolling. Of the 5.1 million ounces of refined silver, only1,608 ounces were produced under tolling arrangements. Review by region Zhezkazgan Complex 6m 6m Q2 Q1 Q2 2007 2006 2007 2007 2006---------------------------------------------------------------------------------Ore extraction '000 t 12,816 14,050 6,516 6,300 7,226Average copper grade % 0.81 0.82 0.80 0.83 0.82Copper Concentrate '000 t 247.2 280.1 126.4 120.8 140.7Copper in Concentrate '000 t 93.1 100.9 46.6 46.5 51.7Copper Cathodes* '000 t 93.8 105.8 43.9 49.9 54.1of which tolling '000 t -- 0.5 -- -- 0.3Copper Rod '000 t 18.0 14.3 9.0 9.0 9.0 * Includes copper used to produce copper rod Ore extraction at the Zhezkazgan complex in the first six months of 2007 waslower than in the corresponding period of 2006, primarily due to reduced productionvolumes at Annenskoe mine following the previously reported roof fall in late2006. The issue of availability of mineshaft lifting equipment at the Stepnoymine in the first quarter of 2007 was resolved in the middle of March 2007,contributing to the recovery seen in ore output in the second quarter. Cathodeproduction over the first six months of 2007 was slightly higher than concentrateproduction, as 5,416 tonnes of copper in concentrate was produced by a thirdparty on a tolled basis for Kazakhmys. Copper in concentrate production was marginally higher with 5% growth in thesecond quarter of 2007 compared to the first quarter of 2007. Copper cathodeproduction was nearly 12% lower than in the first quarter of 2007, due to the 14day maintenance shutdown of the Zhezkazgan copper smelter at the end of May 2007. Balkhash Complex 6m 6m Q2 Q1 Q2 2007 2006 2007 2007 2006---------------------------------------------------------------------------------Ore extraction '000 t 1,092 2,286 602 490 1,266Average copper grade % 1.15 0.82 1.08 1.25 0.81 Copper Concentrate* '000 t 92.5 133.0 51.3 41.2 84.2Copper in Concentrate '000 t 15.9 24.3 8.3 7.6 14.9Copper Cathodes '000 t 97.5 82.1 47.6 49.9 44.7of which tolling '000 t 0.8 0.9 0.2 0.6 0.4Copper Rod '000 t -- -- -- -- -- * Excludes concentrate processed by third parties At the Balkhash complex 1.092 million tonnes of ore was extracted in the firsthalf of 2007 down from 2.286 million tonnes in the first half of 2006. This wasprimarily due to the ongoing planned stripping works at Kounrad mine, mentionedin the last production report. This mine produced 1.2 million tonnes of ore inthe first half of 2006. In June, alongside the stripping work, the mine produced130,000 tonnes of ore, which assisted the modest recovery seen in the secondquarter. These stripping works will continue until the end of 2007, withgrowing, though intermittent, ore extraction over the period. The issuesregarding drilling and underground loading and transportation equipment at Sayakmine, mentioned in the Q1 production report, continued to impact output,resulting in a 165,664 tonnes decrease in ore extraction volumes in the firsthalf of 2007 compared to the corresponding period of 2006. Sayak and Kounrad mines have grades below the region's average, so theirreduced output raised the average copper grade for the period from 0.82% in thefirst six months of 2006 to 1.15% in the same period of 2007. Copper concentrate production at the Balkhash complex increased from 41,248tonnes in the first quarter of 2007 to 51,272 tonnes in the second quarterrepresenting a 24% increase on a quarterly basis. Copper cathode production was5% lower than in the first quarter of 2007 due to a 14 day maintenance shutdownat one of the Balkhash smelter furnaces in June. East Region 6m 6m Q2 Q1 Q2 2007 2006 2007 2007 2006---------------------------------------------------------------------------------Ore extraction '000 t 2,173 2,318 1,027 1,146 957Average copper grade % 2.60 2.63 2.50 2.69 2.92 Copper Concentrate* '000 t 231.4 259.5 105.2 126.2 127.4Copper in Concentrate '000 t 43.7 47.6 20.0 23.7 24.1Copper Cathodes '000 t -- -- -- -- --Copper Rod '000 t -- -- -- -- -- * Excludes concentrate processed by third parties Ore extraction at the East region in the first six months of 2007 was lower thanthe same period in 2006 although the new Artemyevskoe mine performed wellover the period, with ore extraction volumes increasing by 270,339 tonnes. Theincrease at Artemyevskoe was offset by delays in obtaining mining andtransportation equipment at the Orlovskoe and Yubileyno-Snegirikhinskoe mines.New equipment should start to be delivered at the beginning of Q3 2007. Therewas a temporary stoppage of ore extraction at Belousovskoe mine in April 2007 asstripping and ore preparation works were carried out. In the second quarter of 2007, copper concentrate production at the East Regionwas 17% lower compared to the first quarter of 2007 primarily due to lower oreextraction volumes and lower copper grades, the latter principally beingaffected by the reduced output at Orlovskoe mine. Karaganda Region 6m 6m Q2 Q1 Q2 2007 2006 2007 2007 2006---------------------------------------------------------------------------------Ore extraction '000 t 1,912 1,473 917 995 841Average copper grade % 2.36 1.83 2.46 2.27 2.30 Copper Concentrate '000 t 158.7 71.2 79.5 79.2 43.2Copper in Concentrate '000 t 24.6 6.4 12.0 12.6 5.5Copper Cathodes '000 t -- -- -- -- --Copper Rod '000 t -- -- -- -- -- Ore production at Karaganda region increased from 1.473 million tonnes in thefirst half of 2006, to 1.912 million tonnes in the corresponding period of 2007.This was mainly due to higher production at the Kosmurun mine, which increased by539,574 tonnes. The increase was only partly offset by the closure of Abyz minefor planned stripping works, which had produced 183,812 tonnes of ore in thefirst six months of 2006. Average copper ore grades for the half year period 2007 were significantlyhigher compared to the corresponding period of 2006 due to the increase inproduction from Kosmurun mine with a copper grade of 4.00%. In the secondquarter of 2007 these higher grades allowed copper concentrate production to bemaintained at the same level as the first quarter, offsetting the 8% decrease inore extraction volumes. 950,000 tonnes of Nurkazgan ores were stockpiled over the first six months atthe Nurkazgan smelter until testing and commissioning works are complete. Theplant is scheduled to come into operation in the current quarter. 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 operates20 open pit and underground mines and two smelting and refining complexes in theRepublic of Kazakhstan. Kazakhmys also owns significant rail infrastructure inKazakhstan, MKM, a copper products fabrication company in Germany, and gold andoil assets in Kazakhstan and Central Asia. - ends - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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