Kazakhmys PLC KAZ Q3 2012 Production Report & IMS

  Kazakhmys PLC (KAZ) - Q3 2012 Production Report & IMS

RNS Number : 4634P
Kazakhmys PLC
25 October 2012






                                                               25 October 2012





Kazakhmys PLC Production Report for the Third Quarter Ended 30September2012
                       and Interim Management Statement





l Copper cathode production on target to reach full year guidance of  between 
285 kt to 295 kt

§ 12% increase in  copper cathode output  from own concentrate  in Q3 2012  to 
78.5 kt

§ Ore extraction and metal in ore mined continues to be ahead of 2011

§ Successful recommissioning of Konyrat mine



l By-product output on track to meet full year targets for all metals

§ Zinc in concentrate production of 112 kt for the nine month period

§ Silver and  gold output  recovered following  completion of  repairs to  the 
precious metals refinery



l Strong performance from Kazakhmys Power

§ 8% increase in net power generated at Ekibastuz GRES-1 in Q3 2012 due to

continued rising demand from domestic market

§ Commissioning  of sixth  unit on  track  to complete  by year  end,  lifting 
capacity by 20% to 3,000 MW



l Financial position remains strong

§ Sales benefited from a reduction of copper inventory in Q3 2012

§ Net debt of $462 million assisted by improved operational cash flows





Oleg Novachuk, Chief Executive  Officer, said: "Output  has continued to  rise 
and we remain  on track to  meet the production  targets which we  set at  the 
start of the year. The power  business continues to perform well, with  rising 
generation and sound pricing. The outlook for copper remains positive and  our 
growth projects are moving ahead on  schedule. I look forward to reporting  on 
our progress at the year end."





For further information please contact:



Kazakhmys PLC
John Smelt            Corporate Communications, London  Tel: +44 20 7901 7882
Maria Babkina         Corporate Communications, London  Tel: +44 20 7901 7849
Irene Burton          Financial Analyst, London         Tel: +44 20 7901 7814
Maksut Zhapabayev                                        Tel: +77  27  2440
                      Corporate Communications, Almaty                    353
College Hill
David Simonson                                          Tel: +44 20 7457 2031
Anca Spiridon                                           Tel: +44 20 7457 2842
Hill & Knowlton Hong Kong                                                   
K W Lam                                                   Tel: +852 2894 6321



REGISTERED OFFICE

6th Floor,  Cardinal  Place, 100  Victoria  Street, London  SW1E  5JL,  United 
Kingdom.

Notes to Editors

Kazakhmys  PLC  is  a  leading  international  natural  resources  group  with 
significant interests in copper, gold, zinc, silver and power generation.



It is the largest copper producer in  Kazakhstan and one of the top  worldwide 
with 16 operating  mines, 10  concentrators and 2  copper smelters.  Kazakhmys 
Mining operations  are  fully  integrated  from  mining  ore  through  to  the 
production of finished copper cathode and rod. Total copper cathode equivalent
produced in 2011 from own ore was 299 thousand tonnes. Production is backed by
a captive power supply and significant rail infrastructure.



Kazakhmys Mining produces significant volumes of other metals, including zinc,
silver and  gold.  In  2011,  it  produced 140  thousand  tonnes  of  zinc  in 
concentrate. The Group is  amongst the largest silver  producers in the  world 
with 13 million ounces produced in 2011.



Kazakhmys Power has a 50% interest  in the coal fired Ekibastuz GRES-1  plant, 
the largest in Kazakhstan. The plant is undergoing a modernisation  programme, 
including the commissioning of  a sixth turbine to  take capacity to 3,000  MW 
and ultimately to allow the plant to reach its nameplate capacity of 4,000 MW.
Kazakhmys Power also operates the captive coal mines and power stations  which 
supply electricity to the Mining Division.



The Group is  part of the  FTSE-100 index  of companies listed  on the  London 
Stock Exchange and is also listed on the Kazakhstan Stock Exchange (KASE)  and 
Hong Kong Stock Exchange (HKSE). It had revenues from continuing operations of
$3.6 billion  in 2011  with an  operating profit  of $1.2  billion. The  Group 
employs around 60,000 people, principally in Kazakhstan. The Group's strategic
aim is to optimise its current  operations, deliver its major growth  projects 
and to diversify and participate in the development of the significant natural
resource opportunities in Central Asia.





Copper Summary

Kazakhmys mining Production

                                        9m     9m     Q3 Q2 2012 Q3 2011

                                      2012   2011   2012
Ore extraction               '000 t 27,899 25,003 10,412   8,996   8,466
Average copper grade             %   0.95   1.01   0.90    0.98    1.00
Copper in concentrate        '000 t  227.3  231.2   78.9    76.9    77.9
own concentrate             '000 t  225.4  229.9   78.5    76.1    77.1
purchased concentrate       '000 t    1.9    1.3    0.4     0.8     0.8
Copper cathode production ^1 '000 t  214.9  227.0   78.9    71.0    73.9
own concentrate             '000 t  213.1  226.9   78.5    70.2    73.9
purchased concentrate       '000 t    1.8    0.1    0.4     0.8       -
Copper rod                   '000 t   14.8   24.0    5.6     2.9     8.1

^1Includes copper cathode converted into rod.



Following an increase in copper cathode output in Q3 2012, production  remains 
on track  to meet  the full  year copper  cathode production  target from  own 
concentrate of between 285 kt and 295 kt.



Ore extraction in the  first nine months  of 2012 was 12%  higher than in  the 
comparative period, lifted by a full nine months of output from Akbastau  mine 
and the recommissioning of Konyrat mine in June 2012, both within the  Central 
Region. The  increase  more than  offset  a reduction  in  ore output  in  the 
Zhezkazgan Region, which was  restricted earlier in the  year by shortages  of 
transportation equipment.



The impact of the recommissioning of Konyrat mine is particularly apparent  in 
the 16% increase in ore output in Q3 2012 from Q2 2012.



The average  copper  grade over  the  first nine  months  of 2012  was  0.95%, 
compared to 1.01% in the corresponding  period. The lower grade is  consistent 
with the guidance  set at  the start  of the year.  The grade  was reduced  by 
renewed output from the relatively low grade Konyrat mine and a lower grade at
Orlovsky mine, mentioned in previous production reports.



Higher ore output offset the lower grade leading to a 6% increase in metal  in 
ore mined during the first nine months of 2012. Stockpiling of ore during  the 
first nine months of 2012 reduced the volume of processed material, leading to
a 2%  decline in  the production  of  copper in  concentrate compared  to  the 
corresponding period.



Own copper in concentrate  production in Q3  2012 increased by  3% to 78.5  kt 
compared to  Q2  2012, reflecting  the  increase in  metal  in ore  mined  and 
processed during the quarter although  production was impacted by a  reduction 
in recovery rates due to the lower grade.



Copper cathode production from own concentrate  of 213.1 kt in the first  nine 
months of  2012 was  6% below  the comparative  period, reflecting  the  lower 
output of copper in concentrate and a release of work in progress in 2011.





Copper Summary

Kazakhmys mining Production (Continued)

Copper cathode output  from own concentrate  increased by 12%  in Q3 2012,  to 
78.5 kt, compared to  70.2 kt in the  previous quarter. The increase  reflects 
the higher volume of copper in concentrate and an increased contribution  from 
the release of work in progress built up earlier in 2012.



Other Metals Summary

Kazakhmys Mining Production

                                          9m    9m    Q3 Q2 2012 Q3 2011

                                        2012  2011  2012
Zinc in concentrate            '000 t 112.4 113.7  40.9    39.9    38.1
Average zinc grade                   %  3.35  3.98  3.60    3.19    3.82
Silver^1                       '000 oz 9,004 9,864 3,364   2,842   3,091
Own production (by- product)^2       

                               '000 oz 8,993 9,846 3,360   2,839   3,084
Average silver grade           g/tonne 17.09 17.85 16.46   16.93   17.18
Gold                           '000 oz  89.9 110.6  37.3    23.3    40.7
Own production (by-product)^2        

                               '000 oz  78.9  85.3  33.4    18.5    29.4
Average grade                  g/tonne  0.67  0.67  0.66    0.67    0.60
                                                                    
Doré production (primary)      '000 oz  11.0  25.3   3.9     4.8    11.3
Average grade                  g/tonne  1.31  1.26     -    1.36    1.24

^1 Includes a small volume of by-product production from the former  Kazakhmys 
Gold mines: Central Mukur and Mizek.

^2^Includes slimes from purchased concentrate.



Zinc (by-product)

Zinc in concentrate production in the first  nine months of 2012 was 1%  below 
the corresponding period. There was a 16% increase in zinc in ore mined due to
output from Akbastau mine, which was re-opened at the end of 2011, and  higher 
metal in ore extraction from the  East Region, which is the Group's  principal 
source of  zinc metal.  However,  the stockpiling  of  zinc bearing  ore  from 
Akbastau, Artemyevsky and Abyz mines and an increase in stockpiled ore held at
a third party processor led to a reduction in the volume of ore processed.  In 
contrast to 2012, output during the  first nine months in 2011 benefited  from 
the use of stockpiled ore.



In Q3 2012 the production of zinc in concentrate was 3% higher compared to the
previous quarter,  reflecting the  increase in  metal in  ore mined  partially 
offset  by  an  increase  in  stockpiled  ore,  principally  at  Akbastau  and 
Artemyevsky mines.



Silver (by-product)

In the first nine months of 2012, higher  ore volumes led to a 7% increase  in 
the overall  volume of  silver in  ore mined,  but this  was offset  by  lower 
recovery rates. The corresponding period also benefited from the processing of
stockpiled material. Overall, these factors led  to a 4% decline of silver  in 
concentrate output compared to the same period in 2011.



Own production of silver during the first nine months of 2012 was 8,993 koz, a
reduction of 9% from  the corresponding period in  2011, reflecting the  lower 
level of silver in  concentrate production and the  impact of the  comparative 
period benefiting from a significant release of work in progress.







Other Metals Summary

Kazakhmys Mining Production (continued)

Production of silver in Q3 2012 increased by 18% to 3,360 koz, assisted by  an 
increase in metal in ore mined and  a release of work in progress  accumulated 
during the repair work at the precious metals refinery, reported in Q2 2012.



Gold (by-product)

Gold output in  the first nine  months of 2012  of 78.9 koz  was 8% below  the 
comparative period of 2011. An increase  in the level of gold rich  stockpiled 
ore and lower recovery  rates reduced the output  of gold in concentrate.  The 
previous period also benefited from the processing of stockpiled ore from Abyz
mine and a higher contribution from a release of work in progress.



Gold output in Q3 2012 of 33.4 koz was significantly above the 18.5 koz
achieved in Q2 2012, again benefiting from a release of work in progress
accumulated during the repair work at the precious metals refinery in Q2 2012.



Gold (primary production)

Gold (primary production) relates to the output from mines previously included
within Kazakhmys Gold.



Gold output decreased 57%  in the first  nine months of  2012 compared to  the 
corresponding period. Extraction at Mukur mine stopped in June 2012,  although 
material for  heap leaching  will be  available throughout  2012.  Extraction 
finished at Mizek mine in November 2010, but the heap leaching of ore in  pads 
will continue until the end of 2012.















Kazakhmys Mining Review by Region

Zhezkazgan Region

                                 9m     9m    Q3 Q2 2012 Q3 2011

                               2012   2011  2012
Ore extraction        '000 t 16,959 17,404 5,780   5,831   5,801
Average copper grade       %   0.71   0.73  0.71    0.71    0.70
Copper concentrate    '000 t  318.1  302.5 115.6   107.1    95.9
Copper in concentrate '000 t  102.2  111.1  36.2    34.6    35.2



Ore extraction of 16,959 kt in the first nine months of 2012 was 3% below  the 
comparative period. Output from the North, West and East mines was impacted by
the availability  of  rolling stock  at  the  start of  the  year.  Additional 
railcars were delivered during Q3 2012.



Ore extraction in Q3 2012 was in line with Q2 2012. The improved  availability 
of transportation  equipment  and  raised  output at  North  mine  offset  the 
decrease in  production at  Stepnoy mine,  which suffered  from low  equipment 
reliability. The equipment  issues at Stepnoy  mine should be  resolved in  Q4 
2012.



Operations at some sections of Annensky  mine were suspended in July 2012  due 
to  depletion.  The  remaining  sections  of  Annensky  mine  have  now   been 
transferred to East mine, with some output from East mine being transferred to
West mine, in order to ease capacity constraints. Overall, the combined output
from the East, West and  Annensky mines in Q3 2012  was in line with Q2  2012. 
There have been some operational and cost benefits from this restructuring.



The average  copper grade  over the  first nine  months of  2012 decreased  to 
0.71%, compared to 0.73% during the prior period. The reduction is mainly  due 
to the decrease in grade at North and Zhomart mines, where operations moved to
areas with lower grades.



The combination  of lower  volumes and  grade resulted  in an  8% decrease  in 
copper in concentrate production to 102.2  kt during the first nine months  of 
2012, compared to the comparative period.



Copper in  concentrate  production in  Q3  2012 increased  by  5% to  36.2  kt 
compared to the previous quarter, due to the timing of processing of material.









Kazakhmys Mining Review by Region

Central Region

                                9m    9m    Q3 Q2 2012 Q3 2011

                              2012  2011  2012
Ore extraction        '000 t 7,287 4,078 3,470   1,964   1,448
Average copper grade       %  0.86  0.95  0.74    0.96    0.95
Copper concentrate    '000 t 417.0 411.0 165.7   131.8   148.0
Copper in concentrate '000 t  57.5  46.4  21.2    18.5    16.9



Ore extraction in Central Region increased by 79% to 7,287 kt during the first
nine months of  2012, compared to  the same  period in 2011.  The increase  in 
output was due to the re-opening of  Akbastau mine in the second half of  2011 
and Konyrat mine in  June 2012. Renewed  output from the  low grade, open  pit 
Konyrat mine reduced the average grade of the region.



Ore output in Q3 2012 rose to 3,470  kt mainly due to the renewed output  from 
Konyrat mine  mentioned  above.  This  increase  was  partially  offset  by  a 
reduction in output  from Nurkazgan  mine, where the  main conveyor  underwent 
further repair work.



Higher ore volumes  led to a  62% increase in  metal in ore  mined during  the 
first nine months  of 2012 compared  to the prior  period. However, copper  in 
concentrate rose by just 24%, as output was impacted by the stockpiling of ore
from Abyz, Konyrat and  Akbastau mines and  a lower recovery  rate due to  the 
lower grade. The  stockpiled ore  from the  Abyz and  Konyrat mines  is to  be 
processed in the near future.



In the first nine months of 2012,  477 kt of ore extracted from Akbastau  mine 
was stockpiled, containing  approximately 5  kt of copper  and 7  kt of  zinc, 
which is unlikely to be processed in the near future pending further technical
studies.



Production of copper in concentrate in Q3 2012 increased by 15% compared to Q2
2012 reflecting an increase in metal in ore mined over the quarter,  partially 
offset by stockpiling and lower recovery rates at concentrators.











Kazakhmys Mining Review by Region

East Region

                                  9m    9m    Q3

                                2012  2011  2012 Q2 2012 Q3 2011
Ore extraction          '000 t 3,653 3,521 1,163   1,201   1,217
Average copper grade         %  2.29  2.43  2.29    2.34    2.47
Copper concentrate^1    '000 t 330.6 353.2 104.9   110.6   119.2
Copper in concentrate^1 '000 t  61.6  66.1  20.1    20.9    22.6

^1Excludes concentrate processed by third parties.



Ore extraction  in  the East  Region  during the  first  nine months  of  2012 
increased by 4% to 3,653  kt compared to the  same period in 2011.  Production 
rose at Artemyevsky mine following an improvement in backfilling equipment and
at Yubileyno-Snegirikhinsky mine due  to improved equipment availability.  The 
increase was partially offset by the suspension of operations at  Nikolayevsky 
mine,  where  more   challenging  operating  conditions   rendered  the   mine 
uneconomic. Equipment  and  personnel  were  transferred  to  Artemyevsky  and 
Yubileyno-Snegirikhinsky mines.



Ore output in Q3  2012 declined by  3% to 1,163 kt,  compared to the  previous 
quarter, mainly due to the suspension of Nikolayevsky mine.



The average copper grade in the first nine months of 2012 was 2.29%,  compared 
to 2.43% in the corresponding  period. This reduction was mainly  attributable 
to Orlovsky mine  where operations were  focused on higher  grade sections  in 
2011.



The average copper grade in Q3 2012  decreased to 2.29% from 2.34% in Q2  2012 
due to the reduction in grade at Orlovsky and Yubileyno-Snegirikhinsky  mines, 
slightly offset by the mining of higher grade sections at Artemyevsky mine.



Copper in concentrate production during the  first nine months of 2012 was  7% 
below the comparative period in 2011 due to the combination of a lower  volume 
of copper in ore mined,  a decrease in recovery rates  due to the lower  grade 
and an increase in volumes of stockpiled ore.



Production of copper in concentrate  in Q3 2012 was  4% below Q2 2012,  mainly 
reflecting the lower level of metal in ore mined, which decreased by 5%.















Kazakhmys Power Review

kazakhmys POWER PRODUCTION

                                      9m    9m    Q3

Ekibastuz GRES-1^1                  2012  2011  2012 Q2 2012 Q3 2011
Net power generated^2        GWh 10,403 9,199 3,347   3,097   2,804
Net dependable capacity^3      MW  2,199 2,189 2,153   2,189   2,157
Electricity tariff        KZT/kWh   5.96  5.40  6.28    6.22    5.48
Captive power stations
Net power generated^2         GWh  4,077 4,146 1,213   1,273   1,239
Net dependable capacity^3      MW    857   860   872     849     873
Internal sales                GWh  2,537 2,401   787     796     769
External sales                GWh  1,540 1,745   425     477     470
Electricity tariff^4      KZT/kWh   4.12  3.50  4.55    4.56    3.50

^1Results shown are for 100% of the business

^2Electricity generated and  sold to customers  less internal consumption  and 
transformer losses in the power station.

^3The net dependable capacity is the maximum capacity a unit can sustain  over 
a specified  period  modified for  seasonal  limitations and  reduced  by  the 
capacity required for station service and auxiliaries.

^4External sales only.



Ekibastuz GRES-1

On 26 February  2010, the  Group completed the  disposal of  50% of  Ekibastuz 
GRES-1 to JSC  Samruk-Kazyna with the  Group retaining a  50% non  controlling 
interest. The results shown above are for 100% of the business.



Net power generated at Ekibastuz GRES-1 in  the first nine months of 2012  was 
13% higher compared to the corresponding  period of 2011 due to strong  demand 
from the domestic market, which saw  a 5% rise in electricity consumption.  As 
there were higher tariffs  available and ready demand  in Kazakhstan, a  large 
proportion of the  electricity volumes previously  distributed to Russia  were 
instead sold locally, so domestic sales volumes grew by 23% or 1,874 GWh.



In Q3 2012,  net power  generated increased by  8%, compared  to the  previous 
quarter. This increase reflects seasonal factors and higher available capacity
following completion of the scheduled maintenance period in Q2 2012.



In April  2012,  the ceiling  tariff  for  domestic sales  increased  to  6.50 
KZT/kWh.  The  weighted  average  realised  tariff  for  electricity  sold  by 
Ekibastuz GRES-1 in Q3  2012 was 6.28 KZT/kWh,  a modest increase compared  to 
6.22 KZT/kWh in Q2 2012.  The average realised tariff  in Q3 2012 is  slightly 
below the ceiling tariff  for Kazakhstan, as 3%  of net electricity  generated 
was sold to Russia at a lower tariff.



The weighted average  realised tariff for  the first nine  months of 2012  was 
5.96 KZT/kWh, an increase of 10% compared to the corresponding period in 2011,
reflecting the higher ceiling tariff approved from April 2012 and an increased
proportion of  domestic sales,  which  are priced  at a  comparatively  higher 
tariff.



Net dependable capacity  achieved during  the first  nine months  of 2012  was 
2,199 MW, 10  MW above  the comparative period  in 2011,  benefiting from  the 
commissioning of an electrostatic precipitator at Unit 6 in Q1 2012.



Kazakhmys Power Review

kazakhmys POWER PRODUCTION (continued)

Net dependable capacity decreased by  36 MW in Q3  2012, compared to Q2  2011, 
due to the  restriction of load  caused by seasonal  higher water  circulation 
temperatures.



The commissioning of Unit  8 remains on  track and will  be brought back  into 
operation by  the end  of 2012.  With  this unit  operational from  2013,  the 
capacity of the power station will increase to 3,000 MW.



The rehabilitation of Unit 2 commenced in Q4 2010 and the unit is expected  to 
be operational before the  end of 2014, thereby  increasing capacity to  3,500 
MW.





Captive power stations

Net power generated at  the captive stations during  the first nine months  of 
2012 was slightly below  the comparative period in  2011 as generation  levels 
remain close to  capacity. Net  power generation in  Q3 2012  decreased by  5% 
compared to Q2 2012 reflecting a scheduled outage for maintenance in Q3 2012.



Internal consumption in the first nine months of 2012 increased by 6% compared
to the corresponding period in 2011. This increase was mainly driven by higher
demand from operations in  the East Region in  Q1 2012. East Region  decreased 
supply from third party power stations  as the increase in tariffs made  these 
purchases less attractive.



External sales in the first nine months  of 2012 decreased by 12% compared  to 
the same period in 2011. The decrease in external sales reflects the  increase 
in volume of  internal sales  and the lower  net generation.  The decrease  in 
external sales in Q3 2012 by 11% compared  to Q2 2012 was driven by lower  net 
generation in the quarter due to maintenance work.



In April 2012,  the ceiling  tariff for the  electricity sold  by the  captive 
power stations to external customers was raised to 4.55 KZT/kWh. The  weighted 
average realised tariff for electricity sold in Q3 2012 was consistent with Q2
2012. The weighted average realised tariff for electricity sold also  includes 
an additional transmission fee on a small proportion of sales.



The weighted average  realised tariff for  the first nine  months of 2012  was 
4.12 KZT/kWh, an increase of 18% compared to the corresponding period in 2011,
reflecting the higher realised tariff in Q2 and Q3 in 2012.











Interim Management Statement

MATERIAL eVENTS AND tRANSACTIONS

There are no material  events and transactions in  the period covered by  this 
Interim Management Statement  that were  not disclosed as  post balance  sheet 
events in the Group's 2012 Interim Report.

financial Performance

Sales volumes

The following table sets out the sales volumes of the major products produced
by Kazakhmys Mining:





                                 9m    9m

                             2012  2011
Copper cathodes        '000 t 185.6 196.1
Copper rod             '000 t  14.5  20.6
Total copper products  '000 t 200.1 216.7
                                      
Zinc in concentrate    '000 t 113.3 111.9
                                      
Silver                '000 oz 9,193 7,990
                                      
Gold^1                '000 oz 146.1  77.0

^1Gold sales include volumes from by-products and gold doré from the  Central 
Mukur and

 Mizek mines.



Total copper product sales volumes in the first nine months of 2012 were 17 kt
below the  comparative period  in 2011  due to  a 13  kt decrease  in  cathode 
production and a build  up of finished goods  awaiting delivery to  customers. 
Since 30 June 2012, finished goods inventory levels have fallen by 4 kt as the
rail transportation delays which impacted copper product sales to China in  Q2 
2012 have been resolved. A further  reduction in the finished goods  inventory 
built up in the  first half of  2012 is expected over  the remainder of  2012. 
Copper rod production and  sales remain below  capacity as comparatively  more 
favourable terms were obtained for copper cathode sales.



Zinc in  concentrate sales  volumes in  the  first nine  months of  2012  were 
broadly  consistent  with  the  prior  year  period  reflecting  the   similar 
production volumes in both periods.



Silver sales volumes were 15% above the  first nine months of 2011 due to  the 
build up of finished silver products from  July 2011 to September 2011 as  the 
Government of  Kazakhstan introduced  an  export restriction  on the  sale  of 
silver products, with silver sales resuming later in 2011. Silver sales in the
first nine months of 2012 are broadly consistent with production volumes.



Gold sales volumes in the  first nine months of 2012  included the sale of  69 
koz of gold  bar inventory  built up in  the second  half of 2011  due to  the 
export restriction placed on gold bar  sales by the Government of  Kazakhstan. 
Sales of gold bar recommenced in March 2012 and have continued to the National
Bank at market rates on  a monthly basis. There has  been a small build up  of 
gold finished goods inventory in the first  nine months of 2012 due to  timing 
issues arising on sales to the National Bank.



Interim Management Statement

FINANCIAL PERFORMANCE (CONTINUED)

Commodity prices



The following table sets out the average realised prices for the Group's major
products:

                              9m    9m

                            2012  2011
Copper             $/tonne 8,081 9,261
Silver             $/tr.oz  31.0  37.7
Gold               $/tr.oz 1,653 1,527
Electricity tariff

Ekibastuz GRES-1   KZT/kWh  5.96  5.40
Domestic sales     KZT/kWh  6.03  5.52
Export sales       KZT/kWh  4.26  4.48



The following table sets out the average LME/LBMA prices:

                  9m    9m

                2012  2011
Copper $/tonne 7,963 9,254
Zinc   $/tonne 1,946 2,289
Silver $/tr.oz  30.6  36.2
Gold   $/tr.oz 1,651 1,534



Realised prices will differ from the  average LME/LBMA prices during the  same 
period, principally  because  of the  timing  of  sales over  the  period  not 
occurring evenly. Premiums or discounts  to metal exchange prices,  negotiated 
with customers, also impact realised average prices. The LME copper price on 1
January 2012 was $7,661 per tonne and ended the period on 30 September 2012 at
$8,267 per tonne.



The weighted  average realised  tariff for  Ekibastuz GRES-1  during the  nine 
months ended 30 September 2012 was  5.96 KZT/kWh, an increase of 10%  compared 
to the prior  period. The realised  tariff on domestic  sales of 6.03  KZT/kWh 
compares to  a  ceiling tariff  for  domestic  electricity sales  set  by  the 
Government of Kazakhstan of  6.50 KZT/KWh from  1 April 2012.  In 2011 and  Q1 
2012, the ceiling tariff for domestic sales was 5.60 KZT/KWh.



Commodity or foreign currency hedging

At 30 September 2012,  there were no commodity  or foreign currency hedges  in 
place other  than copper  and foreign  currency hedges  at MKM  in the  normal 
course of its business.



Exchange rates

The KZT/$ exchange  rate at  30 September 2012  was KZT/$  149.86 compared  to 
KZT/$ 147.87 at 30  September 2011. The average  KZT/$ exchange rate for  the 
nine months ended 30 September 2012 was KZT/$ 149.77 compared to KZT/$  147.19 
for the corresponding period.



Interim Management Statement

fINANCIAL POSITION

Except as described in this statement, there has been no significant change in
the financial position of the Group since 30 June 2012.



Net funds/debt for continuing subsidiary businesses

The net debt  of the  Group's continuing  subsidiary businesses  rose to  $462 
million as at 30 September  2012 from $418 million as  at 30 June 2012 as  the 
Group continued investing in its  growth projects. Operating cashflows in  the 
third quarter were strengthened  by higher sales  volumes of copper  products, 
reduced tax  payments  and  lower  sustaining  capital  expenditure.  However, 
operating cashflows were  adversely impacted  by lower copper  prices and  the 
bi-annual interest payment on the China Development Bank/Samruk-Kazyna finance
facility.



Gross debt was $2,192  million as at  30 September 2012,  an increase of  $166 
million from 30 June  2012, representing the  continued monthly repayments  of 
$44 million under the pre-export credit facility offset by the draw down of an
additional $300 million under the China Development Bank/Samruk-Kazyna finance
facility. Of  the outstanding  gross debt  balance as  at 30  September  2012, 
$1,973   million   related   to    the   $2.7   billion   China    Development 
Bank/Samruk-Kazyna finance facility and $219 million related to the pre-export
credit facility. The China Development Bank/Samruk-Kazyna finance facility  is 
for the  development  of Bozshakol  and  other mid-sized  projects,  including 
Bozymchak.



Total cash  and cash  equivalents for  the  Group were  $1,730 million  at  30 
September 2012, compared with $1,608 million  at 30 June 2012, reflecting  the 
positive operating cash flows generated by  the Group during the quarter,  the 
movements in gross debt, offset by capital expenditure incurred on the Group's
growth projects. 



Net debt for MKM

Net debt  for the  Group's  discontinued subsidiary  business, MKM,  was  $157 
million at 30 September 2012, a $17  million increase from $140 million at  30 
June 2012, reflecting dividends paid to the Group in the period of €15 million
and a small appreciation in the Euro against the US dollar.



Net funds of Ekibastuz GRES-1

The net funds of the Group's subsidiaries exclude the net funds of the  equity 
accounted joint venture investment in Ekibastuz GRES-1. Ekibastuz GRES-1's net
funds, on a 100% basis, reduced to  $56 million at 30 September 2012  compared 
to $71  million  as  at 30  June  2012  due to  expenditure  incurred  on  the 
refurbishment of Unit 2. The net funds will continue to be used to finance the
power plant's rehabilitation programme.



Holding in ENRC PLC

The Group's holding of 334,824,860  shares in ENRC PLC  had a market value  of 
$1,671 million based on  a share price  of 308.7 pence  on 30 September  2012, 
compared to a value of $2,185 million as at 30 June 2012 when the share  price 
was 415.4 pence.



Following the 2012 interim dividend announced by ENRC PLC on 15 August 2012 of
6.5 US cents per share, the Group received $22 million in October 2012. 



Interim dividend of the Company

Following the 2012 interim dividend announcement on 23 August 2012 of 3.0 US
cents per share, the Group paid $16 million to its shareholders in October
2012.



Kazakhmys Mining Production Appendix

Copper MINing

                                9m     9m    Q3
                                                                
Zhezkazgan Region             2012   2011  2012 Q2 2012 Q3 2011
North          ore ('000 t)  1,654  1,726   713     656     471 
                  grade (%)   0.50   0.72  0.46    0.55    0.72 
East           ore ('000 t)  2,855  2,884 1,059     915     979 
                  grade (%)   0.56   0.57  0.60    0.58    0.56 
South          ore ('000 t)  4,082  3,912 1,345   1,373   1,353 
                  grade (%)   0.62   0.57  0.62    0.63    0.55 
West           ore ('000 t)  1,959  1,632   995     510     530 
                  grade (%)   0.53   0.50  0.57    0.49    0.48 
Stepnoy        ore ('000 t)  2,393  2,468   697     818     855 
                  grade (%)   0.59   0.63  0.68    0.63    0.58 
Annensky       ore ('000 t)  1,194  2,012     -     620     652 
                  grade (%)   0.68   0.57     -    0.66    0.55 
Zhomart        ore ('000 t)  2,823  2,769   971     938     962 
                  grade (%)   1.34   1.48  1.32    1.31    1.40 
                                                                
Region total   ore ('000 t) 16,959 17,404 5,780   5,831   5,801 
Region average    grade (%)   0.71   0.73  0.71    0.71    0.70 
Central Region                                                  
Nurkazgan West ore ('000 t)  1,985  2,013   527     696     720 
                  grade (%)   0.56   0.70  0.56    0.53    0.72 
Abyz           ore ('000 t)    381    360   115     122      99 
                  grade (%)   1.14   1.33  1.03    1.10    1.20 
Akbastau       ore ('000 t)  1,374     54   522     486      54 
                  grade (%)   1.50   1.78  1.63    1.45    1.78 
Sayak          ore ('000 t)  1,283  1,217   436     416     425 
                  grade (%)   0.76   0.74  0.82    0.70    0.72 
Shatyrkul      ore ('000 t)    475    433   169     156     149 
                  grade (%)   2.39   2.21  2.61    2.31    2.20 
Konyrat        ore ('000 t)  1,789      - 1,701      88       - 
                  grade (%)   0.29      -  0.29    0.31       - 
                                                                
Region total   ore ('000 t)  7,287  4,078 3,470   1,964   1,448 
Region average    grade (%)   0.86   0.95  0.74    0.96    0.95 







Kazakhmys Mining Production Appendix

Copper MINing (continued)

                                          9m     9m     Q3

East Region                             2012   2011   2012 Q2 2012 Q3 2011
Nikolayevsky             ore ('000 t)    208    446     13      40     150
                            grade (%)   0.83   0.89   0.64    0.76    0.79
Artemyevsky              ore ('000 t)  1,180    978    396     405     356
                            grade (%)   1.86   1.90   1.95    1.86    2.00
Irtyshsky                ore ('000 t)    456    434    149     152     136
                            grade (%)   1.39   1.35   1.41    1.37    1.40
Belousovsky              ore ('000 t)      -     22      -       -       -
                            grade (%)      -   1.02      -       -       -
Orlovsky                 ore ('000 t)  1,228  1,167    411     407     395
                            grade (%)   3.00   3.66   2.78    3.04    3.60
Yubileyno-Snegirikhinsky ore ('000 t)    581    474    194     197     180
                            grade (%)   2.85   3.02   2.71    2.91    3.13
Region total             ore ('000 t)  3,653  3,521  1,164   1,201   1,217
Region average              grade (%)   2.29   2.43   2.29    2.34    2.47
Total                    ore ('000 t) 27,899 25,003 10,413   8,996   8,466
Average                     grade (%)   0.95   1.01   0.90    0.98    1.00









Kazakhmys Mining Production Appendix

Copper processing

                                              9m      9m    Q3

                                            2012    2011  2012 Q2 2012 Q3 2011
Zhezkazgan Region
Copper concentrate                '000 t   318.1   302.5 115.6   107.1    95.9
Copper in concentrate             '000 t   102.2   111.1  36.2    34.6    35.2
Central Region
Copper concentrate                '000 t   417.0   411.0 165.7   131.8   148.0
Copper in concentrate             '000 t    57.5    46.4  21.2    18.5    16.9
East Region
Copper concentrate                '000 t   330.6   353.2 104.9   110.6   119.2
Copper in concentrate             '000 t    61.6    66.1  20.1    20.9    22.6
Total own processed
Copper concentrate                '000 t 1,065.7 1,066.7 386.2   349.5   363.1
Copper in concentrate             '000 t   221.3   223.6  77.5    74.0    74.7
Own ore processed by third
parties
Copper concentrate                '000 t    15.2    23.6   3.7     7.5     8.8
Copper in concentrate             '000 t     4.1     6.3   1.0     2.1     2.4
Total own
Copper concentrate                '000 t 1,080.9 1,090.3 389.9   357.0   372.0
Copper in concentrate             '000 t   225.4   229.9  78.5    76.1    77.1
Purchased concentrate
Copper concentrate                '000 t     3.9     2.8   1.1     1.6     1.4
Copper in concentrate             '000 t     1.9     1.3   0.4     0.8     0.8
Total copper in concentrate       '000 t   227.4   231.2  78.9    76.9    77.9









Kazakhmys Mining Production Appendix

Copper smelter / refinery - copper cathode production

                                          9m    9m   Q3

                                        2012  2011 2012 Q2 2012 Q3 2011
Zhezkazgan smelter
Own concentrate                 '000 t  86.1  86.4 29.0    27.7    27.6
Purchased concentrate           '000 t     -     -    -       -       -
Sub - total                     '000 t  86.1  86.4 29.0    27.7    27.6
Tolling                         '000 t     -     -    -       -       -
Total including tolling         '000 t  86.1  86.4 29.0    27.7    27.6
Balkhash smelter
Own concentrate                 '000 t 127.0 140.5 49.4    42.5    46.3
Purchased concentrate           '000 t   1.8   0.1  0.5     0.8       -
Sub - total                     '000 t 128.8 140.6 49.9    43.2    46.3
Tolling                         '000 t   0.8   5.9    -       -     1.7
Total including tolling         '000 t 129.6 146.4 49.8    43.2    47.9
Total                           '000 t 215.7 232.8 78.9    70.9    75.5
Total copper cathode

production from own concentrate '000 t 213.1 226.9 78.5    70.1    73.9

























































Kazakhmys Mining Production Appendix

Other metals Mining - Zinc

                                      9m    9m   Q3

ZINC                                2012  2011 2012 Q2 2012 Q3 2011
East Region
Nikolayevsky             grade (%)  1.65  3.79 1.73    1.77    4.10
Artemyevsky              grade (%)  6.23  6.04 7.80    5.15    6.05
Irtyshsky                grade (%)  2.92  2.93 3.04    2.79    2.96
Belousovsky              grade (%)     -  0.32    -       -       -
Orlovsky                 grade (%)  4.44  3.98 4.11    4.76    3.21
Yubileyno-Snegirikhinsky grade (%)  2.45  2.40 2.49    2.24    2.71
Region average           grade (%)  4.35  4.16 4.93    4.13    4.05
Central Region
Abyz                     grade (%)  2.52  2.70 2.47    2.62    2.84
Akbastau                 grade (%)  0.93  0.42 0.88    1.00    0.42
Region average           grade (%)  1.27  2.41 1.17    1.33    1.99
Overall average          grade (%)  3.35  3.98 3.60    3.19    3.82
Zinc in concentrate         '000 t 112.4 113.7 40.9    39.9    38.1







Kazakhmys Mining Production Appendix

Other metals Mining - Silver

                                              9m     9m     Q3

SILVER                                      2012   2011   2012 Q2 2012 Q3 2011
Zhezkazgan Region
North                               grade
                                    (g/t)   4.22   6.29   4.61    3.98    5.97
East                                grade
                                    (g/t)   8.72  12.26  10.50    8.08   11.46
South                               grade
                                    (g/t)  13.46  12.84  13.93   12.43   12.91
West                               grade
                                    (g/t)  12.54  12.08  11.81   15.03   15.69
Stepnoy                             grade
                                    (g/t)   9.41   8.59  11.63    8.55    9.24
Annensky                            grade
                                    (g/t)  14.74  13.86      -    9.76   14.49
Zhomart                             grade
                                    (g/t)   8.23   8.42   8.49    9.42    9.04
Region average                      grade
                                    (g/t)  10.30  10.83  10.60    9.71   11.35
Central Region
Nurkazgan                           grade
                                    (g/t)   1.56   1.76   2.06    1.22    1.77
Abyz                                grade
                                    (g/t)  32.48  34.89  29.22   32.47   39.97
Akbastau                            grade
                                    (g/t)  17.30  15.00  18.90   16.32   15.00
Sayak                               grade
                                    (g/t)   4.72   4.79   4.54    4.56    3.83
Shatyrkul                           grade
                                    (g/t)   2.49   2.14   3.70    1.62    1.70
Konyrat                             grade
                                    (g/t)   2.46      -   2.55    0.92       -
Region average                      grade
                                    (g/t)   6.98   5.81   6.13    7.63    5.48
East Region
Nikolayevsky                        grade
                                    (g/t)  20.78  31.95  28.70   18.87   41.04
Artemyevsky                         grade
                                    (g/t) 115.52 123.85 128.88  104.74  103.71
Irtyshsky                           grade
                                    (g/t)  50.67  50.03  54.54   52.72   53.77
Belousovsky                         grade
                                    (g/t)      -  16.66      -       -       -
Orlovsky                            grade
                                    (g/t)  59.67  56.64  58.71   60.57   43.65
Yubileyno-Snegirikhinsky            grade
                                    (g/t)  24.63  22.46  27.38   23.52   22.20
Region average                      grade
                                    (g/t)  68.79  66.51  76.44   67.19   58.85
Overall average                     grade
                                    (g/t)  17.09  17.85  16.46   16.93   17.18
Silver in concentrate             '000 oz  9,871 10,368  3,608   3,382   3,415
Own concentrate                   '000 oz  9,158  9,175  3,419   3,013   3,071
Own concentrate processed by 3^rd
parties                           '000 oz    713  1,145    171     342     317
Purchased concentrate             '000 oz     64     48     18      27      27
Silver metal^1, 2

(as by-product)                   '000 oz  8,993  9,846  3,360   2,839   3,084

^ 1 Includes slimes from purchased concentrate.

^ 2 Includes a small volume of by-product production from the former
Kazakhmys Gold mines: Central Mukur and Mizek.







Kazakhmys Mining Production Appendix

other metals Mining - gold

                                                 9m    9m   Q3

GOLD                                           2012  2011 2012 Q2 2012 Q3 2011
Central Region
Nurkazgan                                grade
                                         (g/t) 0.21  0.26 0.18    0.18    0.28
Abyz                                     grade
                                         (g/t) 3.38  3.57 3.11    3.45    3.25
Akbastau                                 grade
                                         (g/t) 0.63  0.50 0.63    0.63    0.50
Sayak                                    grade
                                         (g/t) 0.20  0.23 0.20    0.19    0.23
Shatyrkul                                grade
                                         (g/t) 0.38  0.38 0.44    0.36    0.40
Region average                           grade
                                         (g/t) 0.55  0.56 0.53    0.53    0.49
East region
Nikolayevsky                             grade
                                         (g/t) 0.36  0.43 0.43    0.33    0.57
Artemyevsky                              grade
                                         (g/t) 1.10  1.06 1.04    1.15    1.02
Irtyshsky                                grade
                                         (g/t) 0.25  0.33 0.16    0.27    0.31
Belousovsky                              grade
                                         (g/t)    -  0.26    -       -       -
Orlovsky                                 grade
                                         (g/t) 1.15  1.07 1.18    1.19    0.84
Yubileyno-Snegirikhinsky                 grade
                                         (g/t) 0.40  0.38 0.41    0.37    0.38
Region average                           grade
                                         (g/t) 0.86  0.80 0.87    0.90    0.73
Overall average                          grade
                                         (g/t) 0.67  0.67 0.66    0.67    0.60
Gold in concentrate                    '000 oz 88.5 103.0 31.3    31.4    35.6
Own concentrate                       '000 oz 82.5  93.6 30.0    28.6    32.4
Own concentrate processed by 3^rd
party                                  '000 oz  4.4   7.0  1.0     2.2     2.1
Purchased concentrate                  '000 oz  1.6   2.4  0.3     0.6     1.1
Gold output^1

^(as by-product)                      '000 oz 78.9  85.3 33.4    18.5    29.4

^1 Includes slimes from purchased concentrate.



Gold doré production                   9m   9m   Q3

(as primary production)              2012 2011 2012 Q2 2012 Q3 2011
Ore extraction          ore ('000 t)  211  658    -    15.7     300
Gold ore grade                   g/t 1.31 1.26    -    1.36    1.24
Gold in ore to pads          '000 oz  8.9 31.2    -     7.0    12.1
Gold precipitation           '000 oz 10.8 25.7  3.9     5.0    11.3
Gold doré production      '000 tr.oz 11.0 25.3  3.9     4.8    11.3







                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


MSCLLFIEIRLSFIF -0- Oct/25/2012 06:00 GMT
 
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