(Adds comments, details on production)
By Silvia Antonioli
LONDON, April 30 Kazakh miner Kazakhmys
reported lower copper output in the first quarter as it reduced
extraction in high-cost areas to protect profit margins.
Copper miners are trying to cope with declining ore grades
and rising costs at a time when metals prices are softening.
Kazakhmys, for example, is planning to move the bulk of its
production to cheaper open pit mines over the next few years.
The Kazakh miner produced 69,500 tonnes of copper cathode
equivalent in the first quarter of 2014, 4.8 percent down from
the same period a year before, but said it was on track to
achieve its full-year production target.
The decline was due to maintenance works at two mines and to
the producer's choice to cut back in some high cost areas to
protect its margins. The company also said extraction levels
will increase over the year.
"We set a target for the year and that we will meet but
obviously, if we can protect some profit along the way, then we
will do that. So in the first quarter we just reduced the output
slightly at some of the mines and that will return over the rest
of the year," Kazakhmys head of investor relations John Smelt,
The London-listed company produced 294,000 tonnes of copper
cathode equivalent in 2013 and expects copper output for 2014 of
between 285,000 and 295,000 tonnes.
In February, Kazakhmys unveiled a plan to sell off
less-profitable mines to its biggest shareholder Vladimir Kim to
focus on lower-cost, open-pit mines and growth projects.
The copper producer said it was making good progress with
the restructuring and will update the market on the spin-off
plan in the second half of the year.
"As a reliable albeit currently high cost producer, we are
not surprised to see Kazakhmys report an on-track quarterly
production update," Investec analyst Louise Collinge said in a
"The company has some way to go in successfully executing
its turnaround, in terms of completing divestments and growth
projects, but we believe the strategy does have merit."
Shares in Kazakhmys were 0.9 percent down by 0835 GMT,
underperforming a flat UK mining sector
(Reporting by Silvia Antonioli; Editing by David Holmes and