Mining in Kazakhstan DIT monthly newsletter July 2020 edition
Content
I. Mining sector news
- Rosatom paid Kazatomprom 7.5 bln rubles for stake in Uranium Enrichment Center - Kazatomprom extends reduced operational activity for another month - Interview with Kazakh Minister of Environment, Geology, Natural Resources, Magzum Mirzagaliyev - KAZ Minerals may see 22% drop in EBITDA to $483 million in H1 – BofA - Central Asia Metals copper production edges up in first half-year - Kazatomprom may postpone commissioning of plant to produce fuel assemblies for Chinese nuclear power plants - Kazakhmys increased copper cathode output 13.7% in H1 - Kazchrome net profit fell by 15.7% in H1 - Steel production in first half year fell 12% - Russian Copper Co to boost investment in Russia 12%, keep it flat in Kazakhstan in 2020 - EuroChem may start construction of a fertilizer plant in Kazakhstan in 2021 - KAZ Minerals’ copper production rises 4% in first half year - Kazatomprom uranium production declines 3.4% in first half-year - Kamaz discussing project for building cast iron plant in Kostanai with Kazakhstan
II. Mining events organised by DIT III. Other mining events IV. Points of contact
I. Mining sector news
Rosatom paid Kazatomprom 7.5 bln rubles for stake in Uranium Enrichment Center
MOSCOW. June 30 (Interfax) - Rosatom Group paid Kazakhstan's Kazatomprom 7.544 billion rubles for its stake in joint venture JSC Uranium Enrichment Center (UEC), Atomenergoprom, which consolidates the Russian nuclear group's civilian assets, said in its quarterly report.
"In March 2020, the group and NAC Kazatomprom JSC completed a deal to reconfigure their project to cooperate in the area of uranium enrichment. The group acquired 49.999982% of shares in the joint venture JSC UEC from the Kazakh side. As a result, the group increased its equity stake in UEC to 99.999982% and acquired control over this company. The cost of the acquisition was 7.544 billion rubles, the shares were paid for in cash," the report said.
At the time of the acquisition UEC's main asset was the Ural Electrochemical Integrated Plant (UEIP), the largest uranium enrichment facility in Sverdlovsk Region. UEC owns 25% plus one share of UEIP, and the other 74.99% is held by United Company RSK, a wholly owned subsidiary of Rosatom's nuclear fuel division TVEL.
It was reported in March that TVEL and Kazatomprom concluded a deal in which TVEL consolidated 100% minus one share in UEC. Kazatomprom retained one share in the joint venture. The price of the deal was not disclosed at the time.
Kazatomprom said in late January that it planned to sell its stake in UEC for 6.253 billion rubles, which was the equivalent of about $100 million at the time.
UEC was a 50-50 joint venture founded by Rosatom's Tenex and Kazatomprom on July 25, 2006. TVEL has held the Russian group's stake in UEC since 2014, the SPARK-Interfax system shows.
Kazatomprom extends reduced operational activity for another month
ATYRAU. July 7 (Interfax-Kazakhstan) – National Atomic Company Kazatomprom has extended the period of reduced operational activity for an additional month, the company said.
"In April, we announced measures to protect our people by reducing the number of employees on sites to minimum possible levels, for a period of three months. Throughout that time, we have followed government restrictions and health advice, however, we
believe that the pandemic-related risks still remain too high for a full return of production employees to our sites. We are therefore extending the period of reduced operational activity for an additional month, with the intention of gradually increasing mine site staff levels at the beginning of August, if it is deemed safe to do so," Kazatomprom CEO Galymzhan Pirmatov said.
Today's extension of the protection measures for an additional month is not expected to have a material impact on the Company's 2020 production volume guidance (19,000 tU to 19,500 tU on a 100% basis - attributable production between 10,500 tU and 10,800 tU).
Kazatomprom's production decisions and contractual obligations are backed by inventory, and the Company will continue to responsibly manage its supply sources, including purchases in the spot market if necessary, in order to meet its sales commitments (unchanged at 13,500 tU to 14,500 tU).
Kazatomprom's management team has established a suite of safe operating criteria, which the Company will continue to assess in the coming weeks, prior to implementing any decision to begin a return to normal operating levels.
“The return of mining subsidiary production employees for the resumption of mine development activities is then expected to proceed in the first week of August,” Kazatomprom said.
In April, the company said its subsidiaries were reducing the number of staff on site to minimum possible levels. All non-essential staff would return home with full pay, while those remaining on site would operate within strict social distancing.
These measures are expected to remain in place for three months, resulting in a lower level of wellfield development activity and, in consequence, a reduction in production volumes. The Company expected Kazakhstan's 2020 annual uranium production volume to decrease by up to 4,000 tU to 19,000 tU from previous expectations (previously 22,750 tU to 22,800 tU on a 100% basis).
Kazatomprom is the world's largest producer of uranium, with the company's attributable production representing approximately 24% of global primary uranium production in 2019. The Group benefits from the largest reserve base in the industry and operates, through its subsidiaries, JVs and Associates, 24 deposits grouped into 13 mining assets. All of the Company's mining operations are located in Kazakhstan and mined using ISR technology with a focus on maintaining industry-leading health, safety and environment standards.
Interview with Kazakh Minister of Environment, Geology, Natural Resources, Magzum MIRZAGALIYEV:
KAZAKHSTAN AIMS TO ATTRACT MAJOR INVESTORS TO GEOLOGICAL EXPLORATION, PLANS A ROAD-SHOW SERIES ABROAD
A year ago geological industry management underwent serious changes in Kazakhstan. A new state body - the Ministry of Environment, Geology and Natural Resources - was
created, and the issue of the development of geology received higher status. In an interview with Interfax-Kazakhstan, Minister of Environment, Geology and Natural Resources Magzum MIRZAGALIYEV talked about the industry’s plans, risks and opportunities in the face of the crisis caused by the COVID-19 pandemic, the prospects for new discoveries and much more.
- Magzum Maratovich, the ministry you are heading up was created a year ago, and the development of geology was among its tasks. The country's leadership instructed the [ministry] to devise a strategy for the development of the industry, and the concept of the state program has already been approved. Is the COVID-19 pandemic very likely to make its adjustments to industry plans? Do you agree with the opinion that not the best times are coming for geology?
- The outbreak of COVID-19 has led to an unprecedented collapse in demand in global oil markets this year. Nevertheless, the OPEC + agreement had a positive effect on the change in the oil price forecast in the short term. Against the backdrop of such trends, capital investment in exploration and production has declined globally. So, if in 2014 the total volume of capital investment in the world amounted to $ 700 billion, then already in 2020 this figure is projected at $ 400 billion. Under such conditions the competition for new investments in exploration and production becomes even more intense. According to the forecasts of the research and analytical company IHS Markit, capital investment in exploration and production in 2021 will decrease by 25%-60%, but at the same time beyond 2022-23 this market is likely to begin its slow recovery.
This crisis is deeper, the drop in prices is underway not only for oil and other energy resources, the total consumption is decreasing.
In such a situation, of course, support is needed in order to avoid laying off people and widespread unemployment. In this sence, the devised state exploration program for 2021- 2025 should become a driver for the industry in the long term. Achieving the indicators set out in it is the key to the country's economic security in the future. In addition to all that, its implementation will provide employment and, accordingly, income for people. To this end, no adjustments are planned for the program.
- Will the state program financing be reduced?
- At this stage, the reduction of funds for the geological exploration of mineral resources is not expected. The program is already being shaped given the current market situation, therefore, we do not expect significant adjustments.
- Specify how much budget funding is to be directed towards implementing measures envisaged in the state program?
- The program has been devised for five years, during this period, according to our estimates, about 1 trillion tenge (405.77 tenge/ $1) will be invested in the exploration development. Speaking specifically about public funding, we are talking about 153 billion tenge for five years. This money, first of all, will be directed towards conducting the early stages of exploration, such as regional exploration, prospecting, prospecting and evaluation, this is when the work is carried out in large areas, while the probability of discovering a deposit at these stages is low. Nevertheless, we set ourselves ambitious, but, I think, quite feasible tasks to discover up to 50 potentially promising areas of mineral resources. Further this will be the good groundwork for attracting investment. As international experience shows, investors invest in field exploration in those countries
where the state has already carried out or is carrying out the early stages of work at its own expense, where the basis of promising areas with forecast resources has already been formed up. Therefore, here in Kazakhstan, it is important now to carry out this work at the expense of the national budget. Each government tenge invested in geological exploration will fetch us up to 5 tenge in private investments in geological exploration, and this is about 800 billion tenge.
- Is it realistic to implement plans to attract investment to exploration in the new realities?
- We are well aware that, of course, there is a certain risk, but I believe that today Kazakhstan has created fairly good conditions for attracting investment. First of all, this is a big raw material potential. We have 15 sedimentary oil and gas basins, some of them are poorly studied, but, according to our geologists, have a good chance to discover new deposits. Secondly, the availability of developed oil and gas transportation infrastructure with the opportunity to access global markets, qualified HR potential, and the fact that we are going to carry out early stages of geological work at the expense of the national budget, as a result of which it is planned to reveal promising mineral deposits. Therefore, I can say that the task set to us is feasible.
- In February, the Cabinet approved the concept of the state program of geological exploration for 2021-2025. The state program itself, as planned, [was] to have been devised and approved by May 2020. Has the time frame been pushed forward?
- To date, the state program has been devised, agreed upon with state bodies, non- governmental organizations, geological associations and will be approved in the near future.
- Tell [us] about plans to give [National Geological Exploration Company ] Kazgeology the status of the national operator. Some industry participants consider that this step will monopolize the industry, and the company will lobby itself for the entire public budget for exploration.
- Yes, for the time being this issue is being actively discussed, but there is no concrete solution yet. Initially, the idea of giving status to the so-called national operator belongs to many veteran geologists and prominent figures in industry. Afterwards, these amendments have been set out in a bill initiated by the group of the members of the Majilis (the lower chamber of Parliament).
There are a lot of prerequisites for this: this is the significant depletion of mineral reserves, the need to move over from the existing model to a scientifically based approach to studying the subsoil, the need for multi-client studies of poorly studied basins, the rational use of public funds, etc.
The choice of Kazgeology is not accidental. This organization, among other things, was created specifically for the government geological research into the subsoil. Currently, Kazgeology is already doing about 22% (17 out of 80 facilities) of work carried out at the expense of the national budget. The remaining part of the work is carried out through public procurement.
Kazgeology has modern high-tech equipment, is employed with high-class specialists and provides for an integrated approach to the geological study of mineral resources, including geological exploration and the introduction of new high-tech and effective technologies.
Hereto it is also important to note that there is no talk of any monopoly on the subsoil geological exploration. Subsoil users have and will have the right to conduct the subsoil geological exploration at their own expense. And this norm will contribute to the protection of state interests, the rational use of budget funds.
As you can see, the issue is very sensitive, and requires a comprehensive analysis. The discussion of the issue is ongoing.
- At the end of last year, you informed of oil manifestations in Turkestan region. What work is being done there now? Is it possible already to speak about probable reserves?
- No, it’s impossible to even talk about probable reserves, especially about reserves, without carrying out comprehensive work. The discovery of an oil manifestation in the Leontiev depression in Turkestan region is not accidental; in this region, our geologists single out two sedimentary oil and gas basins, the Shu-Sarysu and the Syrdarya, whose potential is still poorly studied, but according to available data, is very significant.
Therefore, this year, geophysical studies have already begun in the Shu-Sarysu sedimentary basin, and will begin in the Syrdarya basin in 2022.
As for this concrete block then we have provided for the exploration of the area as part of the state program. Designs for comprehensive geological and geophysical research are already being worked out. The work is scheduled to begin in 2021.
- It is no secret that in the medium term several industrial cities may be under threat of closure due to the depletion of mineral resources. What measures are being taken to avoid this scenario?
- Given that many deposits were discovered at the beginning of the 20th century, indeed, currently the level of mineral reserves near industrial cities and single-industry towns is critically low.
One of the tasks of the state program is to replenish the mineral resource base and work with current investors, that is, not only attract new ones, but also prop up active subsoil users. Therefore, when devising the state program, the needs of industrial cities and single-industry towns were taken into account. In particular, it is planned to conduct geological exploration near single-industry towns such as Altai [formerly known as Zyryanovsk] , Ridder, Serebryansk in East Kazakhstan, Zhezkazgan, Satpayev in central Kazakhstan, activity in the Torgai [area], etc. As a result of this work, we expect to discover potentially promising sites and carry out the evaluation of undiscovered mineral resources and attract subsoil users to the further exploration of the area.
- Not so long ago you posted on Twitter that you were preparing a strategy to attract major investors to geological exploration, planning a road show to present the country's geological potential. What time frame is the road-show planned for? In which countries, on which platforms? What blocks will be presented? Is there currently an interest on the part of major market players in blocks?
- The СOVID-19 situation and its effects have badly impacted the global demand for raw materials. And investors, obviously, are reluctant to invest in prospecting, or they do it very neatly and economically. Understanding the problem is one thing, and being able to implement it – that is something different. Therefore, the question arose of the need to attract a consulting company of a worldwide reputation and opportunity, since right now
we need to be able to come up big from the perspective of investment. Kazakhstan’s total recoverable hydrocarbon resources are estimated at 76.4 billion tonnes of oil equivalent. As I said, we have 15 sedimentary basins, 5 of which have been developed, 5 are showing little promise, and prospects have yet to be studied on 5 poorly studied basins.
We plan to attract a company with a worldwide reputation and an impressive client base in order to study and unravel the potential of these sedimentary basins, devise the marketing strategy to attract major foreign investors as partners. We have already held the first negotiations with such a company - this is IHS Markit, based in the UK and the USA. We have agreed to set up a joint working group, which will soon analyze the country’s investment opportunities, as well as roadshows are planned. Kazakhstan has already good experience on this matter, first roadshows were carried out by our country yet in 1992 in Houston. Then first investors were attracted to geological exploration, as a result, the Chinarevskoye oil and gas condensate field was discovered. In 1993, a similar roadshow was held in Houston and then in London, where it was proposed to explore the Caspian [Basin] prospects. A consortium of companies was established, which are among the five world leaders in the oil and gas industry. The result of the work is known all over the world: in addition to the Kairan, Aktoty, Kalamkas-Sea and others oilfields the unique Kashagan field was discovered.
The current roadshow is to be organized at four locations. One of such venues will be Houston - the leading global center of the energy industry. This city hosts international energy conferences annually, offices of more than 800 foreign companies and nearly 430 major American companies are situated over there. It’s difficult to find a venue more suitable than this one. Also, it is planned to visit London, Singapore and Dubai as part of the roadshow.
The roadshow is scheduled for the 4th quarter of this year and the 1st quarter of 2021.
Source: https://www.interfax.kz/?lang=eng&int_id=13&news_id=219
KAZ Minerals may see 22% drop in EBITDA to $483 million in H1 – BofA
NUR-SULTAN. July 8 (Interfax-Kazakhstan) - KAZ Minerals Group may see a 22% decline in EBITDA to $483 million in January-June 2020, according to a survey of Bank of America (BofA).
The decline is attribute to low copper prices.
In January-June 2019, the group's EBITDA amounted to $620 million.The forecast for 2020 EBITDA is maintained unchanged at $1 billion, and for 2021 is set at $1.1 billion with an increase of 10%.
The production target forecast for 2020 remains the same at 280-300,000 tonnes of copper.
BofA survey says that a surge in new cases and 14-day lockdown reintroduced from July 5 might affect Group's second-half year production.
Central Asia Metals copper production edges up in first half-year
ALMATY. July 13 (Interfax-Kazakhstan) - Central Asia Metals (CAML) produced 6,607 tonnes of copper under the Kounrad project in Kazakhstan in H1 2020, up 0.2% year-on- year, the company said on Monday.
The Kounrad project's output amounted to 6,594 tonnes in H1 2019.
The output of zinc in concentrate at the Sasa zinc-lead mine in North Macedonia rose 6% in January-June 2020 to 12,203 tonnes, while production of lead in concentrate grew 5.4% to 15,014 tonnes.
Production currently on track to meet full year 2020 guidance of 12,500-13,500 tonnes for copper. This year's production target for the company's Sasa mine is 23,000-25,000 tonnes of lead concentrate and 30,000-32,000 tonnes of zinc concentrate.
CAML, incorporated in the UK, owns 100% of the Kounrad solvent extraction and electrowinning (SX-EW) copper facility in central Kazakhstan, and 80% of the Shuak copper exploration project in northern Kazakhstan. The company has been operating in Kazakhstan since 2012. The company additionally runs molybdenum and gold projects in Mongolia and a copper project in Chile, as well as developing the Sasa zinc deposit in Macedonia.
CAML's shareholders are JO Hambro Capital Management (10.34%), Blackrock Investment (9.54%), Orion Mine Finance (8.66%), Fidelity International (8.47%), Polar Capital (5.75%), Premier Miton Investors (4.21%), AXA Investment Mgrs (4.06%) and Hargreaves Lansdown (3.11%).
CAML's shares have been traded on the LSE's Alternative Investment Market (AIM) since 2010.
Kazatomprom may postpone commissioning of plant to produce fuel assemblies for Chinese nuclear power plants
ALMATY. July 13 (Interfax-Kazakhstan) – The deadline for the launch of a plant for production of fuel assemblies (FA), built on the premises of Ulba Metallurgical Plant in Ust- Kamenogorsk for Chinese nuclear power plants with an annual capacity of 200 tonnes in the equivalent of enriched uranium, may be postponed due to a global coronavirus pandemic, Kazatomprom CEO Galymzhan Pirmatov has said in an interview with the Kazakhstanskaya Pravda nationwide newspaper.
The global pandemic is making adjustments to the schedule for putting the plant into service as equipment manufacturers involved in the project are from France, Germany and China, Pirmatov said.
It was reported earlier that the first FA consignment for Chinese nuclear power plants from the Ulba Metallurgical Plant was scheduled for late 2021.
Pirmatov said at the time that the construction of the plant y for FA production was over last year and the plant was in the process of installing equipment.
In December 2015, National Atomic Company Kazatomprom jointly with China’s General Nuclear Power Corporation (CGNPC) agreed to create Ulba FA joint venture in Kazakhstan to develop uranium deposits and to produce nuclear fuel and FA. The agreement envisaged FA production for nuclear power plants in China at Ulba Metallurgical Plant with a capacity of 200 tonnes a year. The construction of the plant started in December 2016.
The project cost amounted to 49 billion tenge. The plant will be managed by Ulba-FA, founded by Ulba Metallurgical Plant (51%, a subsidiary of Kazatomprom) and CGN-URC (49%, a subsidiary of the Chinese CGNPC).
Ulba Metallurgical Plant, located in Ust-Kamenogorsk (the administrative center of East Kazakhstan region) and is part of Kazatomprom, produces fuel pellets for nuclear power plants.
National Atomic Company Kazatomprom JSC is the national operator of the Republic of Kazakhstan for export of uranium and its compounds, rare metals, nuclear fuel for nuclear power plants, special equipment, technologies and dual-use materials.
Kazakhmys increased copper cathode output 13.7% in H1
ALMATY. July 14 (Interfax-Kazakhstan) - In January-June 2020, Kazakhmys Holding LLP produced 136.203 tonnes of copper cathode, or an increase of 13.7% [year-on-year], the company press office said on Tuesday.
In the reporting period production of gold bullion grew 23.8% to 2.634 tonnes, silver bullion and silver granules upped 23.5% to 131.910 tonnes.
In H1 2020 the average copper content in ores stood at 0.98%, or 5.9% higher than planned.
In the 1st half-year, Kazakhmys smelters processed 15.6 million tonnes of ore.
In 2020 Kazakhmys Holding LLP plans to produce 257,600 tonnes of copper cathode.
The metals market is gradually recovering and getting back to its previous level, Adilet Barmenkulov, deputy chairman of the Management Board of Kazakhmys Holding was quoted by the press office as saying.
In 2019 Kazakhmys Holding LLP produced 245,924 tonnes of copper cathode.
Kazakhmys Holding LLP is the largest copper producer in Kazakhstan with ten mines, five mining enrichment plants, two copper smelters, and two opencast coal mines.
Kazchrome net profit fell by 15.7% in H1
AKTOBE. July 15 (Interfax-Kazakhstan) - Kazchrome JSC, part of the Eurasian Resources Group (ERG), posted a 15.7% decline in the net profit udner IFRS from 176.948 billion tenge in 2018 to 149.097 billion tenge in 2019, according to non-audited financial statements.
Profit before tax in 2019 decline 6.1% to 190.465 billion tenge, gross profit was 22% down to 306.207 billion tenge, revenues decreased by 6.9% to 698.307 billion tenge.
Assets in 2019 increased by 10.7% and stood at 1.054 billion tenge, liabilities increased 9.8% to 906.378 billion tenge, and equity increased by 16% to 147.446 billion tenge.
JSC Transnational Company Kazchrome operates Donskoy Ore Mining and Processing Plant in Aktobe region, Kazmarganets Mining Enterprise in Karaganda region, Aksu Ferroalloys Plant in Pavlodar region and the Aktobe Ferroalloy Plant.
ERG is one of the world's leading diversified mining and smelting groups with fully integrated mining, processing, power generation, logistical and marketing operations. ERG operates assets in Kazakhstan, Europe, Africa and Brazil. ERG's major assets in Kazakhstan include Kazchrome, Sokolov-Sarbai Mining and Processing Works (SSGPO), Aluminum of Kazakhstan, Kazakhstan Electrolysis Plant, Eurasian Energy Corporation, Shubarkol Komir and TransCom.
Steel production in first half year fell 12%
ALMATY. July 15 (Interfax-Kazakhstan) - In January-June 2020, Kazakh steel maker produced 1.825 million tonnes of crude steel, or 12% less than in January-June 2019, the Statistical Committee of the Ministry of National Economy said.
The production of flat-rolled products amounted to 1.165 million tonnes (12% up), ferroalloys totaled 1.097 million tonnes (1.7% up).
Russian Copper Co to boost investment in Russia 12%, keep it flat in Kazakhstan in 2020
MOSCOW. July 17 (Interfax) - Russian Copper Company (RCC), one of the three largest copper producers in Russia, plans to boost investment in Russia-based assets 12% in 2020 to more than 54 billion rubles, the company's press office said.
Investment in Kazakhstan will remain level with last year at $74 million.
"Several RCC upstream and downstream investment projects intended to ensure self- sufficiency in feedstock, raise efficiency and increase capacity are in progress," the company said.
RCC is preparing to develop the Malmyzh copper deposit in the Khabarovsk territory and the Tarutin deposit in the Chelyabinsk region, among others.
EuroChem may start construction of a fertilizer plant in Kazakhstan in 2021
MOSCOW. July 22 (Interfax) – The governments of Russia and Kazakhstan signed an agreement for EuroChem to implement a project for construction a fertilizer plant in the Zhambyl region of Kazakhstan, EuroChem said in a press release.
The company has already completed the first stage of the project, including phosphorite exploration, the start of phosphorite deposit development and the launch of a mining complex that will produce 640,000 tonnes of phosphorite powder a year.
“The new plant in Kazakhstan will be supplied with Russian potassium. Russia also provided power generation and mining equipment for a total value of about $50 million. The end products will be sold within Kazakhstan and also exported to China, Central Asia, Southeast Asia and Middle East,” Russian Minister of Industry and Trade Denis Manturov is quoted as saying.
To date, investment in the project has totaled about $270 million with another $600 to be made, according to the press release.
Construction of the plant will be completed by 2025.
KAZ Minerals’ copper production rises 4% in first half year
ALMATY. July 30. (Interfax-Kazakhstan) - KAZ Minerals Group produced 153,800 tonnes of copper in January-June 2020, or 4% more than in the same period in 2019, the company said.
“Copper production growth was driven by high ore throughput and improved grades at Bozshakol,” the company said.
In the first half of the year, Aktogay in East-Kazakhstan produced 67,600 tons, Bozshakol in Pavlodar region 60,400 tonnes, East Region and Bozymchak mine in Kyrgyzstan – 25,800 tonnes of copper.
Gold production increased by 25% to 109.7 koz due to higher processing volumes.
“All metals currently on track to achieve full year production guidance, but Covid-19 risks elevated in the second half of the year,” the company said.
There has been no material disruption to operations or sales from Covid-19 to date. “However, Kazakhstan imposed a second phase of quarantine measures from 5 July 2020 reflecting heightened risk in the country and to the Group’s operations for the second half of the year,” according to the press release.
Measures were taken to control Covid-19 risks at Aktogay and Bozshakol, with staff rotations extended through overtime for approximately two months from 22 March.
Rotations resumed at the end of May, with a revised shift pattern has also been adopted to reduce the number of rotations required. To support the Group’s Covid-19 response, a PCR testing facility was recently established at Aktogay.
“New arrivals are subject to testing and isolation before commencing work. Bozshakol’s testing and isolation procedures have resulted in a shortage of mining staff, which has prevented the full mobile fleet operation. To maintain feed to the processing plants mining operations have focused on supplying material with shorter haul distances and waste stripping activities have been reduced. If the disruption continues, it may be necessary to utilise lower grade stockpiled ore,” the company said.
Restrictions on the movement of people limit access to the site for contractors and international staff and, if not resolved, may have a negative impact on maintenance and other activities in the second half.
Ore extraction at Aktogay reduced by 19% to 19,674 tonnes in the re-irrigation of previously extracted material, and oxide ore mining was temporarily suspended.
Sulphide ore extraction of 16,033 kt (H1 2019: 16,023 kt) remained above the level required to feed the main concentrator as mine development works continued in preparation for the Aktogay expansion project. Total ore extraction in Q2 of 7,118 kt was 43% lower than the previous quarter (Q1 2020: 12,556 kt), mainly due to the temporary suspension of oxide ore mining.
Mining of oxide ore is scheduled to recommence in Q3 2020.
Copper production from sulphide ore reduced by 10% to 56,100 tonnes in H1 2020 due to the 3% reduction in processing volumes, lower average copper grade, and temporarily lower recovery. Copper cathode production from oxide ore in the first half remained stable at 11.5 kt (H1 2019: 11.8 kt).
“Total copper production in the first half reduced, as expected, by 9% to 67.6 kt (H1 2019: 74.1 kt) and is on target to deliver full year copper production guidance of 120-130 kt. Average sulphide copper grades are expected to decline in the second half, and production is subject to the risk of Covid-19 related disruption,” the company said.
Ore extraction at Bozshakol in H1 2020 reduced by 19% to 14,262 kt due to a reduction in the stripping of clay required to access sulphide material. “In line with the mine plan, which was partially offset by a 16% increase in the extraction of sulphide ore,” according to the press release.
Copper production at Bozshakol in H1 2020 increased by 28% to 60.4 kt (H1 2019: 47.1 kt) due to the increased ore throughput and higher copper grades.
“Full year guidance for copper production is maintained at 110-120 kt, as operations may be subject to Covid-19 related disruption and scheduled maintenance is weighted towards the second half of the year,” the company said.
Gold production increased by 40% to 83.3 koz in H1 2020 (H1 2019: 59.6 koz) due to the increase in processing volumes, a higher average gold grade of 0.29 g/t (H1 2019: 0.25 g/t) and an improved recovery rate.
“Gold production is expected to reduce in the second half of the year due to declining grades and lower processing volumes. Full year guidance for gold production is maintained at 140-150 koz,” according to the press release.
First half silver production increased by 39% to 465 koz (H1 2019: 334 koz) due to higher processing volumes and grades. Silver output is unchanged at c.700 koz, reflecting lower expected H2 processing volumes.
Ore extraction at East Region and Bozymchak in H1 2020 of 2,066 kt were 6% higher than in the reporting period last year due to increase in mining and stockpiling of low grade ore at Bozymchak.
Copper production of 25.8 kt was 2% below the prior comparative period. The East Region and Bozymchak mines are currently on track to achieve full year copper production guidance of c.50 kt.
Gold production in H1 2020 was 25.8 koz. Gold production from the East Region and Bozymchak is well positioned to achieve the full year guidance of 40-50 koz.
Silver production in H1 2020 was 1,030 koz. Silver production is on track to achieve full year guidance of c.1,800 koz.
Zinc in concentrate output of 23.8 kt in H1 2020 was 29% above the prior year comparative period as a result of higher average zinc grades in all East Region mines. “Achieving full year guidance for all metals is subject to potential disruption from Covid- 19 in the second half of the year,”according to the press release.
“In the second quarter of 2020 KAZ Minerals grew copper production across all of its divisions and delivered a 5% increase in Group output. This is an excellent performance in a challenging operating environment and reflects the dedication and resilience of our employees. We are entering the second half of the year with an elevated level of Covid- 19 risk, however, production of all metals is currently on track to achieve our full year targets,” Andrew Southam, Chief Executive Officer, said.
KAZ Minerals PLC is a high growth copper company focused on large-scale, low cost, open- pit mining in Kazakhstan, Russia, and Kyrgyzstan.
As at January 1, 2020, the largest stakeholders of KAZ Minerals were the Kazakh billionaire and co-owner of Kazakhmys Corporation Vladimir Kim with (31.06% through Cuprum Holding Limited and the Kazakh businessman Oleg Novachuk with 7.65% through Harper Finance Limited.
KAZ Minerals is listed on the London Stock Exchange and the Kazakhstan Stock Exchange and employs around 16,000 people, principally in Kazakhstan.
Kazatomprom uranium production declines 3.4% in first half-year
ALMATY. Aug 3 (Interfax-Kazakhstan) - National Atomic Company Kazatomprom in January-June 2020 reports a 3.4% decline in uranium production to 10,434 tonnes, the company said on Monday.
Production volume (attributable basis) in the first half of the year amounted to 5.790 tonnes, which is 7% less than in the same period last year.
"On both a 100% and attributable basis, production volumes for the first half of 2020 were modestly lower, as a result of the initial impact of decreased wellfield development activity and lower staff levels throughout the second quarter, amid the COVID-19 pandemic," the press release says.
Group sales volume fell 22% to 4,220 tonnes. The average price per pound U3O8 rose 13% to $29.46.
Kazatomprom's 2020 guidance on 100% production volume and attributable production remains unchanged at 19,000-19,500 tonnes of uranium and 10,500 -10,800 tonnes, respectively.
The uranium mining target prior to the pandemic for 2020 was 22,750-22,800 tonnes. Kazatomporm later lowered its uranium production target to 19,000-19,500 tonnes.
Kazatomprom produced 22,808 tonnes of uranium in 2019 or an increase of 5% from a year earlier.
Kamaz discussing project for building cast iron plant in Kostanai with Kazakhstan
KAZAN. Aug 3 (Interfax-Kazakhstan) - The management of PJSC Kamaz (MOEX: KMAZ) has discussed a project for the construction of a cast iron plant in the industrial zone of the city of Kostanai with a delegation from the Kazakh government, the truck manufacturer's press service said in a statement.
"Today, the project is at the stage of engineering and plant design. It is planned to sign investment agreements and lay the foundation stone in September 2020. The date for commissioning the production facility is Q1 2024," the Kamaz press service said following the visit of the Kazakh delegation.
At the new plant, which will have an area of 28,000 square meters, it is planned to produce cylinder blocks and block heads for Kamaz engines, including the new P6 engine, as well as cast axle cases.
II. Mining events organised by DIT
1. Virtual Trade Mission on Innovative Equipment and Digital Tech:
2. Week commencing 12 October 2020
Virtual sessions on Tailings, Regeneration, Recycling and Reprocessing.
More detailed information will be closer to the dates.
3. Week commencing 9 November 2020
Digital workshops on Exploration, Health and Safety.
More detailed information will be closer to the dates.
4. IGC Mining Sub group meeting Dates: October or November
IGC is an annual event to discuss trade and economic co-operation between the UK and Kazakhstan. The IGC includes both government and business representatives from these countries, and has become and an effective platform to promote and develop bilateral commercial ties.
This year Mining Sub group meeting will be considering such major topics as: - Geology Industry Development - New Environmental Code - Modernisation of coal industry - etc
5. Week commencing 30 November 2020
Virtual session focused on Investment opportunities.
More detailed information will be closer to the dates.
III. Other mining events:
1. International "Astana Mining & Metallurgy" Congress 14-15 October 2020 (dates are subject to change) Nur-Sultan, Kazakhstan Web: https://amm.kz/en/
AMM Exhibition is a territory of advanced technologies and innovative developments for the mining and metallurgical industry, where participants represent their equipment and technology for prospecting, production, and processing of mineral resources.
2. MINEX Kazakhstan 10-12 November 2020 (dates are subject to change) Nur-Sultan, Kazakhstan Web: https://2020.minexkazakhstan.com/
The Mining Trade and Investment Exhibition will provide a platform for presentation of advanced technologies, investment projects, services and equipment for the mining industry.
3. MINEX Eurasia 30 November 2020 London, United Kingdom Web: https://2020.minexeurasia.com/
MINEX Forum is a leading mining events and knowledge exchange platform dedicated to the promotion of sustainable development of the mining industry across Eurasia.
4. Mines and Money 1-3 December 2020 London, United Kingdom Web: https://minesandmoney.com/
Mines and Money is the international event series for capital-raising and mining investment, where investors, explorers and developers come together to network, hear market analysis, compare investment opportunities, share knowledge, discuss, debate and most importantly do business
IV. Points of contact
1. Edmund Marler, First Secretary Commercial/DIT Director [email protected] +7 7172 55 62 14
2. Olga Protassova, DIT Deputy Director [email protected] +7 7172 55 62 19
3. Asel Zhanbulatova, DIT Adviser [email protected] +7 7172 55 62 38
4. Tatyana Blazhiyevich, DIT Officer [email protected] +7 7172 55 62 30
5. Meruyert Kairbekova, DIT Officer [email protected] +7 7172 55 62 39