Copper miner Kazakhmys enjoying strong demand

Jan 26. SHARECAST. LONDON

Copper miner Kazakhmys enjoying strong demandKazakhstan-based copper miner Kazakhmys met all of its major production targets in 2011, and expects to maintain similar levels of copper output in 2012.

Copper ore extraction in the fourth quarter saw declining output from mines in the Zherkazgan region more or less offset by increased output from the Central Region, where the Akbastau mine has been reopened.

The group’s sales contracts for the coming year have all been completed, reflecting continued strong demand for copper, the company said.

Fourth quarter production break-down

Ore extraction: 8.43m tonnes, down from 8.47m tonnes in the third quarter but up from 8.13m tonnes in the final quarter of 2010.

Average copper grade: 1.01%, up from 1.00% in the third quarter but down from 1.08% a year earlier.

Copper in concentrate: 73,700 tonnes, down from 77,900 tonnes in the preceding quarter and 83,000 tonnes in the fourth quarter of 2010.

Copper cathode production (includes copper sold in concentrate and cathode converted into rod): 73,500 tonnes, down from 73,900 tonnes in the third quarter but up on the 64,400 tonnes a year earlier.

Zinc in concentrate: 25,900 tonnes, versus 38,100 in the third quarter of 2011 and 41,100 in the fourth quarter of 2010.

Average zinc grade: 2.57%, down from the previous quarter’s 3.82% and the 4.61% achieved in the final quarter of 2010.

Silver: 3,273 ounces, up from 3,091 ounces in the prior quarter and 3,822 ounces in the fourth quarter of 2010.

Gold (own production): 40,300 ounces, down from 40,700 ounces in the preceding quarter and 42,000 ounces the year before.

Gold (dor production – primary): 7,700 ounces, versus 11,300 ounces in the third quarter and 12,900 ounces in the fourth quarter of 2010.

“We anticipate maintaining similar levels of copper output in 2012,” revealed Oleg Novachuk, Chief Executive Officer of Kazakhmys.

The group said it has resumed export sales of silver and gold dor after precious metal sales had been disrupted by negotiations with the National Bank of Kazakhstan, which wishes to purchase precious metals to hold in reserve. Negotiations are continuing with the National Bank regarding their purchasing of gold bars and the metal is being stockpiled at present.

The shares rose 37p to 1,150p in the first hour of trading after the production update.

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