Kazakhmys boosted by China

City A.M. Reporter
Kazakh miner Kazakhmys yesterday posted a 9.3-per cent fall in third-quarter copper production, in line with analysts’ expectations, and stuck to its full-year target as demand remained buoyant.

“Kazakhmys has reported a steady quarter with copper production falling modestly... but tracking well in line to hit guidance,” JP Morgan analyst Amos Fletcher said in a note. Output of by-product zinc was higher than expectations, which would help with cash costs, he added.

The group said sales to China, the world’s biggest consumer of industrial minerals, continued at a rapid pace. “Production of copper rod, which is produced to customer order, increased markedly in 2010 due to strong demand from the Chinese market,” a statement said.

Kazakhmys, the world’s tenth biggest copper miner, said it produced 74,600 tonnes of copper cathode from its own concentrate, down from 82,200 tonnes in the third quarter last year, mainly due to lower grades of ore mined. The company also said it was on track to meet its target to produce at least 300,000 tonnes of copper this year, after producing 239,000 tonnes in the first nine months of the year. Last year’s total output was 320,400 tonnes.Kazakhmys, which has 16 operating mines and two smelters in the country, mainly sells its copper to China and Europe. It also produces gold, silver and zinc as by-products.

“This has been another solid quarter for production in our copper division and, combined with firm markets and pricing, has led to further strengthening of our balance sheet,” said chief executive Oleg Novachuk.

The company trimmed net debt to $489m (£306.4m) at the end of the quarter from $585m at the end of June.