Kazakhmys aims to triple power plant output by 2014

LONDON, May 1 (Reuters) - Mining group Kazakhmys (KAZ.L) aims to triple power output by 2014 at its new Ekibastuz coal-fired power plant, the largest in Kazakhstan, the firm said on Thursday.

Output at Ekibastuz is expected to rise to 27,000 gigawatt hours a year from about 9,000 GWh last year, according to a presentation on the firm's website.

The company, the world's 10th biggest copper producer, said in February it would pay $1.5 billion to buy Ekibastuz and a nearby coalfield that supplies the power station.

The acquisition will make Kazakhmys the top ranking power producer in the country with a market share of 22 percent.

Before the takeover, the firm already had three power plants that were mainly used to supply its own mining operations.

But the Kazakhstan power sector offers good commercial possibilities since demand is growing and very low tariffs are expected to rise, the presentation said. Demand, supported by strong industrial growth, is expected to increase by 8 percent this year and 5-6 percent a year in the long term.

Increasing power capacity at Ekibastuz is expected to cost $650 million in capital expenditure through 2010, the firm said.

On Wednesday, the firm posted an 18.4 percent fall in first quarter copper cathode production due to a smelter shutdown and bad weather, but said output should recover after a "subdued" second quarter.

Kazakhmys is awaiting the next move from Kazakh rival ENRC (ENRC.L), which said in March it was considering buying the firm. ENRC, the world's top ferrochrome producer, must make a formal takeover bid or walk away for six months under a ruling by the UK Takeover Panel.

Kazakhmys shares bounced 4.6 percent to 1,654 pence by 1408 GMT after falling 4.0 percent on Wednesday following the release of production figures. The move compared to a 2.5 percent increase in the UK mining index .FTNMX1770. (Reporting by Eric Onstad; editing by James Jukwey)