30th Jan 2007 07:01
Kazakhmys PLC30 January 2007 30th January 2007 Kazakhmys PLC Production Summary for the full year and the fourth quarter ended 31 December 2006 • For the year ended 31 December 2006, copper cathode production, excluding copper produced through tolling arrangements, grew by 5 per cent and copper in concentrate production increased by 9 per cent, compared to 2005. Copper cathode produced from own concentrate increased by 9 per cent over the same period as a result of higher production from the recently commissioned Artemyevskoe, Zhomart (formerly called Zhaman-Aybat) and Kosmurun mines. • Zinc metal production was 17 per cent higher compared to 2005, despite some technical issues associated with the coolers at the Balkhash zinc plant that are still being rectified. Zinc in concentrate production rose by 36 per cent due to an increased contribution from high grade zinc ores from the Artemyevskoe mine (East Region). • Own gold and silver production increased by 6 and 5 per cent, respectively, compared to 2005 levels. Copper Kazakhmys Group Copper Production Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 FY 2005----------------------------------------------------------------------------------------Ore extraction '000 t 9,838 10,289 10,128 8,985 39,240 39,446Average copper grade % 1.07 1.13 1.16 1.32 1.17 1.03Average zinc grade* % 3.98 4.03 4.75 4.47 4.28 3.28 Copper in Concentrate '000 t 95.0 107.6 111.4 119.5 433.5 397.6 own concentrate '000 t 84.7 98.7 100.1 99.7 383.2 345.7 purchased concentrate '000 t 10.3 8.9 11.3 19.8 50.3 51.9 Copper Cathodes** '000 t 89.1 98.8 107.3 111.8 407.0 396.6 own concentrate '000 t 76.8 92.2 96.5 103.0 368.4 338.2 purchased concentrate '000 t 11.6 5.9 10.6 8.7 36.8 48.3 tolling concentrate '000 t 0.7 0.7 0.3 0.1 1.8 10.1Copper Rod '000 t 5.3 9.0 8.1 6.1 28.5 8.7---------------------------------------------------------------------------------------- * Complex ores only ** Includes copper used to produce copper rod In the fourth quarter of 2006, the Group produced 111.8 thousand tonnes ofcopper cathode (of which 6.1 thousand tonnes were used to produce copper rods),a 4 per cent increase compared to the third quarter of 2006. Copper cathodeproduction from own concentrate increased by 7 per cent compared to the thirdquarter, and amounted to 103.0 thousand tonnes. Production through tollingarrangements decreased from 0.3 to 0.1 thousand tonnes. The increased production volume was primarily the result of improved coppergrades, which increased from 1.16 to 1.32 per cent compared to the third quarterof 2006, as well as higher production from new mines (Zhomart, Artemyevskoe andKosmurun). The overall 2006 copper cathode production volume increase of 5 per cent on2005, was primarily driven by the increase of copper production from ownconcentrate (9 per cent increase compared to 2005), in line with guidance issuedduring 2006 and our expressed intention to reduce copper production frompurchased concentrate. By-products Kazakhmys Group By-products Production Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 FY 2005----------------------------------------------------------------------------------------Zinc in Concentrate '000 t 39.2 31.3 36.6 22.0 129.1 95.1Zinc Metal '000 t 18.2 15.6 12.1 13.6 59.5 50.9 Silver '000 oz 5,249 5,443 5,301 5,577 21,570 20,606 own production '000 oz 5,226 5,433 5,295 5,576 21,530 20,517 tolling '000 oz 23 10 6 1 40 90 Gold '000 oz 35.1 42.7 42.9 44.8 165.5 145.3 own production '000 oz 23.2 30.4 25.6 27.7 106.9 100.5 tolling '000 oz 11.9 12.3 17.3 17.2 58.6 44.8---------------------------------------------------------------------------------------- Zinc metal production in the fourth quarter of 2006 was 13.6 thousand tonnes, a12 per cent increase against the 12.1 thousand tonnes produced in the thirdquarter of 2006. This increase was achieved following lower temperaturesexperienced during the fourth quarter, which aided performance. Technical issuesassociated with the Balkhash zinc plant coolers remain, but the programme toredesign the cooling system is continuing and is expected to be completed during2007. Zinc in concentrate production volumes were down from 36.6 thousand tonnesto 22.0 thousand tonnes in the fourth quarter of 2006, as sizeable ore volumeswere held in inventory at the period end ready for processing by third partiesat the beginning of 2007. In total during 2006, 59.5 thousand tonnes of zinc metal were produced, a 17per cent increase compared to 2005. Over the same period, zinc in concentrateproduction was 36 per cent higher, primarily due to the first year of fullproduction at the Artemyevskoe mine within the East Region. In the fourth quarter of 2006, the Group also produced 5.6 million ounces ofsilver and 44.8 thousand ounces of gold, an increase of 5 and 4 per cent,respectively, compared to the third quarter of 2006, driven by increasedcontributions from the Kosmurun mine and higher by-products within purchasedconcentrate. Of the 44.8 thousand ounces of gold produced, 27.7 thousand ouncesrepresented own production (an 8 per cent increase compared to the third quarterof 2006). There were no ore extraction activities at the Abyz mine but this wasfully offset by increased production at the Kosmurun and Artemyevskoe mines. Ofthe 5.6 million ounces of refined silver, production under tolling arrangementsrepresented only 1 thousand ounces. Review by region Zhezkazgan Complex Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 FY 2005----------------------------------------------------------------------------------------Ore extraction '000 t 6,824 7,226 7,071 6,555 27,676 28,046Average copper grade % 0.82 0.82 0.79 0.84 0.82 0.87Copper Concentrate '000 t 139.5 140.7 132.1 128.8 541.1 598.2Copper in Concentrate '000 t 49.2 51.7 48.7 49.6 199.3 214.7Copper Cathodes* '000 t 51.7 54.1 59.8 56.2 221.8 235.3 of which tolling '000 t 0.2 0.3 0.2 -- 0.7 0.1Copper Rod '000 t 5.3 9.0 8.0 6.2 28.5 8.7---------------------------------------------------------------------------------------- *Includes copper used to produce copper rod In the fourth quarter of 2006, ore extracted at the Zhezkazgan complex decreasedby 7 per cent compared to the third quarter, primarily due to reduced miningactivity at the Annensky and East mines caused by the roof fall at the end ofthe third quarter. The loss in production from these two mines was partiallyoffset by stronger performance from the Zhomart mine, the new mining operationwithin the Zhezkazgan complex. The greater ore contribution from this mine alsoallowed a higher average copper grade to be achieved in the fourth quarterrising from 0.79 per cent to 0.84 per cent compared to the third quarter of2006. In the fourth quarter of 2006, copper in concentrate production was 2 percent higher than in the third quarter, driven by higher copper ore grades. Atthe same time, the Zhezkazgan complex produced 6 per cent less copper cathodethan in the previous quarter, as some of the concentrate delivered from the EastRegion mines was stockpiled to be processed in the first quarter of 2007. For the whole of 2006, extracted ore volumes remained at approximately the samelevels as in 2005 with the average copper grade decreasing slightly from 0.87per cent in 2005 to 0.82 per cent in 2006 as the majority of mining operationsat the Zhezkazgan complex are becoming more mature. Copper cathode productiondecreased by 6 per cent from 235.3 thousand tonnes in 2005 to 221.8 thousandtonnes in 2006. Although copper rod production in the fourth quarter of 2006 decreased to 6.2thousand tonnes from 8.0 thousand tonnes produced in the third quarter, itremained at historically high levels due to continued strong demand from China.Overall in 2006, copper rod production more than tripled compared to 2005levels, increasing from 8.7 thousand tonnes to 28.5 thousand tonnes, to meetstronger market demand from China. Balkhash Complex Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 FY 2005----------------------------------------------------------------------------------------Ore extraction '000 t 1,021 1,266 1,252 833 4,371 5,626Average copper grade % 0.82 0.81 0.72 0.93 0.81 0.71 Copper Concentrate* '000 t 48.9 84.2 72.1 52.0 257.1 180.9Copper in Concentrate '000 t 9.4 14.9 10.3 9.0 43.5 32.9Copper Cathodes '000 t 37.4 44.7 47.5 55.6 185.2 161.3 of which tolling '000 t 0.4 0.4 0.1 0.2 1.1 10.0Copper Rod '000 t -- -- -- -- -- ------------------------------------------------------------------------------------------ * Excludes concentrate processed by third parties At the Balkhash complex, ore extraction volumes in the fourth quarter of 2006decreased by 33 per cent compared to the third quarter, adversely impacted bythe breakage of one of the excavators at the Kounrad mine late in September 2006and some technical problems with mining and drilling equipment at the Sayak minein October 2006. In both instances, the technical difficulties have beenrectified. Lower ore extraction volumes were partially offset by an increase inthe average ore grade from 0.72 per cent to 0.93 per cent in the fourth quarterof 2006 compared to the third quarter of 2006, driven by lower productionvolumes at lower copper grade mines, in particular the Kounrad mine. As a resultof lower ore extraction volumes, copper in concentrate production in the fourthquarter of 2006 was 13 per cent lower than in the third quarter. Copper cathodeproduction in the fourth quarter was 17 per cent higher than in the thirdquarter due to processing larger volumes of copper concentrate originating fromthe East and Karaganda regions. In 2006, the total concentrate production volume was 28 per cent lower andcopper in concentrate production was 13 per cent lower compared to 2005 levelsdue to technical issues at the Kounrad and Sayak mines. Copper cathodeproduction was 17 per cent higher than in 2005 due to the larger volume ofconcentrate coming from Karaganda Region mines. East Region Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 FY 2005----------------------------------------------------------------------------------------Ore extraction '000 t 1,361 957 1,075 1,048 4,441 5,082Average copper grade % 2.42 2.92 3.09 3.00 2.83 2.33 Copper Concentrate* '000 t 132.1 127.4 139.9 135.2 534.6 476.8Copper in Concentrate '000 t 23.5 24.1 26.5 24.6 98.7 87.4Copper Cathodes '000 t -- -- -- -- -- --Copper Rod '000 t -- -- -- -- -- ------------------------------------------------------------------------------------------ * Excludes concentrate processed by third parties In the fourth quarter of 2006, ore extraction volumes in the East Region weresimilar to levels seen in the third quarter. Copper concentrate production was 3per cent lower and copper in concentrate production was 7 per cent lowercompared to the third quarter of 2006. This was primarily due to lowerproduction volumes at the Nikolaevskoe mine, where mining was switched from openpit to underground operations, and due to some technical problems associatedwith the lifting equipment at the underground Orlovskoe mine, which have nowbeen rectified. For 2006, total concentrate production volume was 12 per cent higher and copperin concentrate production was 13 per cent higher compared to 2005 levels, drivenby the rich copper ores of the Artemyevskoe and Orlovskoe mines. The averagecopper grade in the East Region increased from 2.23 per cent in 2005 to 2.83 percent in 2006. Karaganda Region Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 FY 2005----------------------------------------------------------------------------------------Ore extraction '000 t 633 841 730 549 2,753 692Average copper grade % 1.23 2.28 2.72 4.46 2.59 0.83 Copper Concentrate '000 t 28.1 43.2 65.7 93.8 230.8 115.5Copper in Concentrate '000 t 0.9 5.5 11.6 15.7 33.7 3.3Copper Cathodes '000 t -- -- -- -- -- --Copper Rod '000 t -- -- -- -- -- ------------------------------------------------------------------------------------------ Ore extraction at the Karaganda Region in the fourth quarter of 2006 was 25 percent lower than in the third quarter of 2006, primarily due to continuedscheduled stripping works at the Abyz mine with no ore extraction taking placefrom October 2006. These stripping works are expected to continue throughout2007. However, due to a larger contribution from the high copper grade ores ofthe Kosmurun and Nurkazgan mines, the average copper grade in the fourth quarterincreased to 4.46 per cent from 2.72 per cent in the third quarter, resulting ina 43 per cent increase in copper concentrate and a 35 per cent increase incopper in concentrate production. Overall in 2006, Karaganda Region ore extraction has exceeded 2005 levels, as aresult of increasing production volumes at the Nurkazgan mine, and a strongercontribution from the Kosmurun mine, which commenced operations in May 2006 andis expected to ramp up to full capacity in 2007. For 2006 as a whole, averagecopper grades were also significantly higher, increasing from 0.83 per cent to2.59 per cent compared to 2005 as both the Kosmurun and Nurkazgan mines haveachieved high copper grades ores (5.53% and 1.17% respectively). For further information please contact: Jinsoo Yang, Head of Investor RelationsSergei Stephantsov, Deputy Head ofInvestor RelationsKazakhmys PLC Tel:+44 20 7901 7800 Robin WalkerAndrew MitchellFinsbury 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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