KAZ Minerals more than doubles output as new mines ramp up

JOHANNESBURG (miningweekly.com) – The ramping up to two new openpit copper mines in the Pavlodar and East regions of Kazakhstan has helped KAZ Minerals to more than double its first-half production, revenue and profit.

The London-, Kazakhstan- and Hong Kong-listed miner on Thursday reported production of 118 000 t of copper in the six months ended June 30, comprising 52 000 t from the new Bozshakol mine and 33 t from the new Aktogay mine.

The underground mines in the East Region and Bozymchak copper/gold mine delivered 33 000 t of copper in the half-year period. This is a decrease from the corresponding period of 2016, owing to the closure of the Yubileyno-Snegirikhinsky mine at the end of 2016 and the adoption of a six-day week at Orlovsky for ventilation work.

The group also increased its gold production from 45 100 oz to 93 000 oz and lifted silver production from 1.56-million ounces to 1.76-million ounces. Zinc-in-concentrate production, however, decreased to 32 300 t, from 39 600 t a year earlier.

The higher group production performance, coupled with strong commodity prices, helped KAZ to increase its revenue from $302-million in the first half of 2016 to $721-million.

Underlying profit surged from $76-million to $195-million in the period under review.

With cash flows from operations exceeding capital expenditure in the six months and $176-million in project-related value-added tax refunds, KAZ reduced its net debt from $2.67-billion to $2.44-billion at the end of June.

The strong performance of the first half of the year has resulted in KAZ narrowing its copper production guidance to a range of 235 000 t to 260 000 t, from a previous forecast of 225 000 t to 260 000 t.

It also revised its silver production guidance for the year to between 3.1-million ounces and 3.35-million ounces. The gold guidance of 135 000 oz to 170 000 oz was maintained and KAZ said that it had made good progress to meet that target.

The company cautioned, however, that achieving its full-year zinc production target of 70 000 t to 75 000 t was dependent on the grades at the Artemyevsky mine.