OREANDA-NEWS. KAZAKHMYS PLC, a company listed on Kazakhstan Stock Exchange (KASE), provided KASE with a press release dated August 27, 2009, reported the press-centre of KASE:

The Kazakhmys group (PLC) announced production and finance results of H1 2009.

In H1 2009 the Group has been successfully operating, despite substantial deterioration on the global copper market early this year. Temporary suspension of production at four high cost mines, of which the Group reported earlier,  caused just a slight reduction in ore mining to 16 m tones in H1 2009 thanks to increase in production on other mines.

Processing of stored ore and increase in extraction ratio at enrichment plants allowed for increasing of copper production in concentrate from raw material by 4.5% to 178 th tones, cathode equivalent copper production increased 8% to 170 th tones. The group reduced inventories to release working capital, which resulted in copper sales reaching 200 th tones during the period.

By-product production, in particular, zinc concentrate, silver and gold,  increased accordingly by 15%, 10% and 8% as compared with H1 2008.

Group's financials were affected in H1 2009 as global copper prices had declined. Average copper price was US024 a ton, having decreased from US 8,192 in H1 2008. As group's main production prices fell, revenue plummeted in H1 2009 by 42% to US 1,648 m. In H1 copper prices grew against that in the beginning of the year, which was positive for our indicators. However global copper prices remain lower than a year ago.

Despite uncertainties on international copper market, our partners remained loyal to the Group. 90% of production planned for 2009 is contracted for sales. The remained production is being sold on the spot-market.

Following the 2009 strategy Kazakhmys is implementing priority investment programs. Mine Zapadniy Nurkuzan was commissioned in Karaganda oblast; the mine has a potential capacity of 4 m tones a year by 2011. Within projects on development of copper deposits in Aktogay and Bozshakol the company ended preparation of preliminary technical and economic grounds proving potential of large low-cost assets with long life span term.

We are continuing to modernize Ekibastuz GRES-1 to increase its capacity up to 4.000 MWt. This will require additional USD1 bn investment. The government-issued resolution on limit tariffs on energy are significantly stimulating investment in the industry.

Shocks on international market have not affected group's social liability plans. Kazakhmys completed construction of two large institutions – professional lyceum in Astana and technical college in Balkhash. The two are to be commissioned September 1, 2009. Professional lyceum in Astana will provide trading in professions linked to construction, transport, metal-processing and
food industries. It is planned that 800 students will study in Balkhash technical college in technical subjects for mining sector. The Group will pay for training of 100 students annually with a monthly stipend. A similar college in Satpaev this year prepared 200 specialists. The Group intends in future to develop technical education, industrial safety in particular.

"H1 was hard. However the anti-crisis strategy aimed at funds saving, asset efficiency and cost control allowed for successfully ending the period.

As ever, we are optimistic about the future, and are careful, as macro-economical situation is uncertain. The Group is striving to keep jobs. And we are abiding by social liabilities assumed", - Kazakhmys CEO Oleg Novachuk said.