Kazakhmys is on track with firm demand
CENTRAL Asian miner Kazakhmys said copper production was ahead of target yesterday and reassured investors customer demand remained firm, batting away fears of a cooling in the Chinese economy.
Shares in Kazakhmys rose 1.9 per cent to £12.20 after the FTSE 100 company said output of copper ore – which accounts for the bulk of its revenues – stood at 164,300 tonnes in the first half. The number was down from 170,100 tonnes year-on-year but ahead of expectations.
Chief executive Oleg Novachuk said: “Mining, processing and smelting have all met or exceeded targets and we remain on track for our anticipated annual production of at least 300,000 of copper cathode.”
Novachuk implicitly addressed concerns that a slowing demand for raw materials from China would affect orders and ore prices, adding: “Customer demand remains firm for our metals and our objective will be to maintain our operational consistency in the second half.”
Paul Cliff at Nomura said there was now “probably some upside” to Kazakhmys’ full-year copper production estimate. “We are very bullish on the outlook for copper prices so it should stand to be an obvious benefit of that,” Cliff added.
Overall ore production was up slightly in the six months to June from 16m tonnes last year to 16.2m tonnes. The average grade of copper slipped from 1.19 per cent to 1.14 per cent due to a decline in grade at two mines in eastern Kazakhstan and a decline in the Zhezkazgan region.
Zinc production fell 5.9 per cent to 80,900 tonnes. Silver output was down 26.8 per cent to 6.7m ounces while gold output dropped 8.3 per cent to 67,100 ounces.