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Miner Kazakhmys raises salaries after currency devaluation
February 17, 2014 / 11:06 AM / 4 years ago

Miner Kazakhmys raises salaries after currency devaluation

LONDON, Feb 17 (Reuters) - Copper miner Kazakhmys said on Monday it will increase salaries for operational staff by 10 percent in response to a devaluation of Kazakhstan’s currency.

The miner announced the pay increase days after President Nursultan Nazarbayev, who has ruled the resources-rich nation for more than two decades with firm grip, said the country’s largest exporters should raise workers’ salaries to protect them from the impact of the devaluation.

London-listed Kazakhmys operates mainly in Kazakhstan.

Its shares rose by about 30 percent last week after Kazakhstan announced it would let the tenge devalue by 19 percent to prevent large-scale speculation on the foreign exchange market after a slide in other emerging market currencies.

Kazakhmys, which sells copper within Kazakhstan in dollar equivalents and exported copper in dollars, will benefit from the devaluation because its local costs will fall.

The company said it has around 60 percent of its cost base in Kazakh tenge.

The salary increase, which will apply to about two thirds of the company’s 58,000 employees, will be effective from April 1.

Analysts at Nomura said the salary increase only partially corroded the benefit of the currency devaluation.

“In our view, it still locks in a significant benefit from the devaluation,” they said in a note to clients.

Kazakhmys’ shares in London were 0.3 percent higher by 1059 GMT on Monday, underperforming a mining sector increase of 1.2 percent.

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