Reuters reported that Kazakh copper producer Kazakhmys forecast no output growth this year after shutting mines to save cash in 2009 and seeing Q4 production slide by 25%.
Investors will have to wait until at least 2011 for the company's growth projects to lift output. It sealed a deal last year for USD 2.7 billion in financing for expansion projects.
The London listed company said that in a production report that it slightly exceeded its 2009 output target of 315,000 tonnes of copper cathode, coming in with 320,400 tonnes, but this was 6.6% fall from the previous year.
Analysts said that the production data was largely in line with expectations. The shares were up 1.4% at 1283 pence at 1128 GMT, outperforming a 0.4% rise in the UK mining index.
Mr Liam Fitzpatrick analyst of Credit Suisse reiterated an outperform rating and a target of 1270 pence, saying the 2010 price earnings ratio of 8.0 was a discount to the firm's global peers.
Kazakhmys suspended output at 4 high cost mines last year to save cash during the economic downturn, which hammered copper prices. The mines are not due to be restarted in the near term and the company does not have the stockpiles to sell in 2010 like it did last year, which allowed an upgrade of the annual cathode target from an initial 300,000 tonnes.
Mr Oleg Novachuk CEO of Kazakhmys said that "In 2010 ore output will be maintained at a similar level to 2009 and the target for cathode production will therefore again be just over 300,000 tonnes."
Production of copper cathodes from its own concentrate decreased to 68,100 tonnes in the 3 months to the end of December from 91,300 tonnes in the previous year.
Mr John Smelt head of corporate communications said that part of the decline was due to maintenance work on smelters and rebuilding inventories after depleting them earlier in the year, so Q1 2010 cathode production should improve. However, it will take longer for growth projects to make an impact on production.
(Sourced from http://www.steelguru.com/news/index/2010/02/01/MTMwOTky/Kazakhmys_sees_2010_flat_after_copper_output_slides.html)
Sunday, January 31, 2010
Kazakhmys sees 2010 flat after copper output slides
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