Kaz Minerals copper miner declares dividend, first-half earnings rise

LONDON (Reuters) - Copper miner Kaz Minerals KAZ.L on Thursday announced an interim dividend of 6 U.S. cents per share, the first in six years, and said it expected to make a similar payment for the second half as it boosted output and kept costs low.

Its share price rose around 7 percent by 0851 GMT, partly reversing deep slides this month and outperforming the broader market .FTNMX1770, which gained 1.4 percent.

All the miners have been dragged down in recent weeks as trade tensions between the United States and China have weighed on markets and doubts have mounted about Chinese demand.

Copper prices CMCU3 this week fell to their lowest levels for more than a year.

Kaz Minerals shares were particularly hard hit after the Kazakhstan-focused miner said at the start of this month it was expanding into Russia with a deal to buy a copper project in Baimskaya from a group of investors including Chelsea soccer club owner Roman Abramovich.

Analysts said the deal increased the company’s risk profile.

Kaz Minerals CEO Andrew Southam said in a telephone interview the company was confident the Baimskaya project would be transformational. It is expected to produce 250,000 tonnes of copper and 400,000 ounces of gold annually over the first decade of operation from 2027.

Southam also said he had experienced no difference in demand from Chinese clients and the company was protected from near-term volatility by its low-cost model based on open pit mining.

Kaz Minerals has ramped up production at mines in Kazakhstan, increasing production by 18 percent in the first half. It says it is on track to produce between 270,000 and 300,000 tonnes this year, in line with earlier guidance.

It said first-half earnings before interest tax depreciation and amortization (EBITDA) were $690 million, up 37 percent from a year ago, citing higher sales volumes and competitive costs.

In a note, Goldman Sachs said the EBITDA result was “a beat” and the dividend a positive surprise.

Kazakhstan last declared a dividend in 2012, which it paid in 2013, before the commodity market crash of 2015-16.

Reporting by Barbara Lewis, editing by David Evans and Emelia Sithole-Matarise