Price hike joy at Kazakhmys

 
Marion Dakers
KAZAKH copper miner Kazakhmys benefited from the rise in commodity prices in the last six months, but warned yesterday cost hikes could catch up and dent future earnings.

Underlying profit rose 159 per cent to $696m (£448m)?in the six months to July, though pre-tax profit dropped 5.2 per cent to $631m due to exceptional items.

The profit gains were lifted by strong copper prices in particular. The company said it sold its metal at an average of $6,981 per tonne, up 73 per cent from last year.

The London-listed group said it expects to feel an impact from costs in diesel and steel as well as currencies, and forecast that full-year gross cash costs would rise to 180 to 200 cents per pound from 159 cents last year.

“It’s likely to be towards the north of that guidance because we are seeing some cost pressures,” said chief financial officer Matthew Hird yesterday, adding that cost increases for the rest of the year could hit five per cent.

The company said its smaller power, gold and petroleum divisions were also performing well.
Spending on new and existing projects rose by 48 per cent to $290m, after a year of cash conservation.

Kazakhmys also confirmed it is considering a secondary listing in Hong Kong. “We want to raise our profile in China. It is our core market. This would be one way to do it,”?said chief executive Oleg Novachuk.

Shares closed up 5.2 per cent at £11.29 yesterday making the mining company the biggest gainer in the FTSE 100.