Kazakhmys stock jumps 39pc on plans to sell off its mature mines
COPPER miner Kazakhmys saw its share price climb almost 39 per cent yesterday, after it unveiled a plan to offload underperforming mines, alongside broadly in-line results for 2013.
“The board believes that a number of mature assets, primarily in the Zhezkazgan and Central Regions, will struggle to meet their own ongoing investment needs and contribute to overall cash flow,” said the FTSE 250 company in a statement.
“The prospect of successfully optimising and investing in these assets may be limited whilst they remain under the group’s ownership, and they do not fit within the group’s strategy of production dominated by large-scale open pit mines.”
Kazakhmys is considering putting the assets into a separate entity with a view to a disposal, which will be held by Vladimir Kim, a Kazakh billionaire who owns 32 per cent of the company.
“Discussions on such a transaction are at a preliminary stage,” added the firm.
Kazakhmys, like many other miners, has been selling off assets and cutting costs in an attempt to turn around its balance sheet during a lull in the commodities cycle, hit by a growth slowdown in China. It posted core earnings of $1.15bn (£690m) in 2013, down from $1.9bn a year earlier. Revenue slipped to $3.1bn from $3.35bn.
Shares closed up 38.8 per cent.