17th Jun 2014 09:49
17 June 2014
REDUCTION OF MINERAL EXTRACTION TAX RATES
Kazakhmys PLC announces that the Government of Kazakhstan has agreed to reduce mineral extraction tax ('MET') rates at some of the Group's mature assets. Lower MET rates have been applied to the deposits in the Zhezkazgan Region, excluding Zhomart mine, and at Konyrat mine in the Central Region.
The assets benefiting from lower MET rates are all within the two regions which have been identified for potential disposal, as part of the proposed restructuring announced on 27 February 2014. These assets have been particularly affected by declining grade and low profitability.
The new MET rates are effective retrospectively from 1 January 2014 and are applicable for one year after which a further application can be made. The value of the reduction for a 12 month period, at current metals prices, is approximately $40 million.
Oleg Novachuk, Chief Executive Officer, said: "We welcome this decision to reduce mineral extraction tax rates at our most challenging assets. Improved cash generation may encourage future investment, potentially extending the life of the assets and helping to maintain employment."
For further information please contact:
Kazakhmys PLC | |||
John Smelt | Corporate Communications, London | Tel: +44 20 7901 7882 | |
Maria Babkina | Corporate Communications, London | Tel: +44 20 7901 7849 | |
Irene Burton | Financial Analyst, London | Tel: +44 20 7901 7814 | |
Maksut Zhapabayev | Corporate Communications, Almaty | Tel: +77 27 2440 353 | |
Instinctif Partners | |||
David Simonson | Tel: +44 20 7457 2020 | ||
Anca Spiridon | Tel: +44 20 7457 2020 | ||
Hill & Knowlton Hong Kong |
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K W Lam | Tel: +852 2894 6321 | ||
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Notes to Editors
Kazakhmys PLC is a leading international natural resources group. It is the largest copper producer in Kazakhstan and one of the top worldwide with 16 operating mines, 7 concentrators and acopper smelter. Kazakhmys Mining has a full range of facilities enabling it to process ore extracted through to finished metal. Total copper cathode equivalent output from own ore was 294 kt in 2013. The Group has two major copper projects under construction.
Kazakhmys Mining produces significant volumes of other metals, including zinc, silver and gold. In 2013, it produced 134 kt of zinc in concentrate. The Group is amongst the largest global silver producers with output of 14 Moz in 2013.
Kazakhmys Power operates three captive power stations which supply electricity to Kazakhmys Mining and third parties. In 2013, net power generated by captive power stations was 5,723 GWh.
The Group is listed on the London Stock Exchange, the Kazakhstan Stock Exchange and the Hong Kong Stock Exchange. It had revenues from continuing operations of $3.1 billion in 2013 and a GroupEBITDA of $1.1 billion. The Group employs around 56,000 people, principally in Kazakhstan.
In February 2014, the Group announced plans for a potential restructuring of its business in order to improve profitability and cash returns.
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