Tag Archives: metals and mining

Stock market: KAZ Minerals

JAN. 27 2017 (The Conway Bulletin) — Shares in Kazakhstan-based copper producer KAZ Minerals pushed up to near a four-year high of 449p on Jan. 25 just before bullish 2016 results.

In the results, CEO Oleg Novachuk also said that output growth will continue in 2017.

“I am pleased that we have achieved our copper and byproduct guidance for 2016, a 73% increase in copper output on the prior year, as we successfully ramped up Bozshakol and the Aktogay oxide plant,” he said. “Our growth will continue in 2017 as Bozshakol reaches capacity and we commence production from sulphide ore at Aktogay.”

Mr Novachuk also said that KAZ Minerals’ results had been pushed up by lower-than-expected costs.

The share price of KAZ Mineral, which used to be called Kazakhmys and has been linked closely to the Kazakh elite, has nearly quadrupled in a year far out-stripping a 30% increase in copper prices. For comparison – at the end of 2015 KAZ Minerals’ share price bottomed out at under 100p.

Stock analysts put the increase down to KAZ Minerals’ new plants coming online. Some also indicated that they thought there more value in the stock in 2017 with a buy rating.

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(News report from Issue No. 314, published on Jan. 27 2017)

Kazakhstan cuts uranium production, forcing prices to rise

ALMATY, JAN. 10 2017 (The Conway Bulletin) — Kazakhstan, the world’s top uranium producer, pledged to cut uranium output, immediately pushing up the price of the metal by 10%.

The production cut promise, and subsequent price rise, demonstrated just how much influence Kazakhstan has over the global uranium market. It currently produces around 40% of the world’s uranium.

Announcing the 10% cut in production, Kazatomprom chairman Askar Zhumagaliyev, said that 2016 had been scarred by a global oversupply of uranium.

“It will be better for our shareholders and stakeholders to leave these strategic uranium resources in soil, rather than use them in the current situation of oversupply,” media quoted him as saying. “The uranium will be produced when the situation improves in the markets in the coming years.”

Uranium prices collapsed in 2016, hitting a 12-year low of $18/pound in mid-December. This represented a drop of 25% since September.

Analysts blamed a number of factors.

A tsunami in 2011 knocked out the Fukushima nuclear power plant in Japan. Fukushima had been a major buyer of uranium before the accident and knocking it out of the market had triggered an immediate oversupply.

The accident at Fukushima also dented the reputation of nuclear power as a safe and reliable energy source and a drop in global oil prices also switched attention away from nuclear power and back to hydrocarbon-fired power which has dropped in price.

Kazakhstan has also contributed to the glut of uranium as it moved to become the world’s biggest supplier. Kazakh uranium production shifted from 18,000 tonnes in 2010 to 24,000 tonnes in 2016. In 2007, Kazatomprom mined 5,000 tonnes.

After the Kazakh cut announcement, which represents around 3% of global supply, Uranium’s spot price rose to $24.25/pound, its highest since September.

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(News report from Issue No. 312, published on Jan. 13 2017)

Uranium traders see better prices in 2017 after Kazatomprom signals move

JAN. 13 2017 (The Conway Bulletin) — It’s been a rough sort of five years for the uranium traders and for the globe’s biggest producers.

At the top of this pile is Kazakhstan which has relentlessly pursued a market-grabbing agenda. It now controls over 40% of the world’s uranium production. Now, though, as reported on page 9, it appears to have signalled that it wants a higher price for its unprocessed uranium product, more often called yellowcake.

By holding back 3% of the world’s production, Kazakhstan’s pushed prices for uranium up by 10%.

And traders are cheering. Ever since a tsunami crashed into the Fukushima nuclear power plant in Japan in 2011, the market has been supply-side heavy. The tsunami wiped out a major buyer of yellowcake. Since then prices had dropped 75% before picking up slightly at the end of this year.

The problem for the industry is that stocks of yellowcake are so high that it will take Kazatomprom showing restraint for years to allow their production cuts to really take hold on the market.

Until then, uranium traders and producers are hoping, for demand to pick up and for this they are looking to incoming US president Donald Trump.

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(News report from Issue No. 312, published on Jan. 13 2017)

Chinese miner operates in Kyrgyzstan

DEC. 26 2016 (The Conway Bulletin) — The Chinese company Full Gold Mining produced its first batch of concentrated gold at its Ishtamberdy gold deposit in Kyrgyzstan’s southeast region of Jalabad, the Kyrgyz government said. The project had stalled since 2011 because of a series of anti-mining protests and demonstrations against excessive Chinese control over Kyrgyzstan’s industry.

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(News report from Issue No. 311, published on Jan. 6 2017)

Kyrgyzstan-focused Centerra Gold scraps quarterly dividend for first time since 2010

BISHKEK, DEC. 9 2016 (The Conway Bulletin) — Canadian gold miner Centerra Gold said it suspended its regular quarterly dividend issue because the bank accounts of its subsidiary in Kyrgyzstan that operates the Kumtor mine has been frozen.

Scrapping the quarterly $0.04 dividend payout to shareholders breaks with a six-year tradition and highlights tension between the Kyrgyz government and the Toronto- listed mining company. The Kyrgyz government, owns a 27% stake in the company but wants, instead, to own a direct stake in Kumtor.

“In light of the current restrictions relating to funds held at Centerra’s wholly-owned Kyrgyz Republic subsidiary, Kumtor Gold Company, Centerra’s Board at its regularly scheduled board meeting yesterday decided against declaring a third quarter dividend,” the company said in a statement.

“In addition, the Board has decided to suspend future dividends for the time being.”

Kumtor’s bank accounts have been frozen since June because of an unpaid environmental fine. Centerra has said the fine is politically motivated to force it to relinquish more equity in the gold mine. For the past couple of years, Kyrgyzstan has argued that it wants to give up its share in Centerra in exchange for a direct 50% stake in Kumtor.

Kumtor is Centerra’s biggest asset. In 2015 it accounted for 97% of its total revenues. And the gold mine is also vital for the Kyrgyz economy. It is its single biggest industrial asset, making up an estimated 10% of total GDP.

Reuters quoted RBC Capital Markets analyst Stephen Walker who said that for every quarter Centerra fails to pay a dividend, Kyrgyz state- owned Kyrgyzaltyn will lose around $9.5m in revenue – a vital source of funding.

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(News report from Issue No. 309, published on Dec. 16 2016)

Kazakhstan-based CAM director’s shares increase

DEC. 12 2016 (The Conway Bulletin) — London-listed Central Asia Metals said that its deputy chairman Nigel Hurst-Brown had been given 215,000 ordinary shares from an unnamed shareholder, increasing his shareholding to 0.81%. The transaction was completed at no cost. With a stake of 19%, Kazakh businessman Kenes Rakishev is Central Asia Metals’ largest shareholder.

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(News report from Issue No. 309, published on Dec. 16 2016)

KAZ Minerals gets funding

DEC. 13 2016 (The Conway Bulletin) — London-listed copper miner KAZ Minerals said it had been given a $300m loan from state-owned Kazakhstan Development Bank to fund the development of the Aktogay mine in eastern Kazakhstan. The loan will have a maturity of 8-1/2 years. At a press conference, Oleg Novachuk, the company’s chairman, said that the total debt of the company totalled around $2.5b.

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(News report from Issue No. 309, published on Dec. 16 2016)

Azerbaijani gold miner connects to grid

NOV. 30 2016 (The Conway Bulletin) — Azerbaijani gold miner Anglo Asian said it connected its Gedabek mine to the national electricity grid, which would save the company around $2.3m/year. The connection cost $2.1m. Previously, the company used diesel generators to produce electricity. Anglo Asian CEO Reza Vaziri said that with unrestrained and cheaper electricity, the company will also be able to expand production.

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(News report from Issue No. 307, published on Dec. 2 2016)

Trump boosts copper, companies in Central Asia benefit

NOV. 25 2016 (The Conway Bulletin) — Copper prices have gained around 12% to a 16-month high of $2.67/lb, since the election of Donald Trump as US president-elect, showing the power of his words.

Trump’s plan to invest $1 trillion in overhauling ageing infrastructure across the United States gave a boost to the global market price of copper, a key element for large construction projects.

Companies in Central Asia that focus on copper production, chiefly Central Asia Metals and KAZ Minerals in Kazakhstan, also benefited from the Trump effect on copper prices.

Both companies saw their share prices soar in the London Stock Exchange by around 20 – 25% in the past two weeks, a sign that the commodity slump could timidly start to reverse.

Central Asia Metals seized the opportunity to acquire a new deposit in Kazakhstan this week, which showed just how bullish the market has become.

Zak Mir, an analyst for the Proactive Investor website, said that Central Asia Metals’ stock price, which is already at its historical high, is on track to reach 240p/share within the next few months. This would be almost double this year’s low of 124p/share.

It’s been a roller coaster year for commodity companies in the region and this doesn’t look like changing.

Despite the uncertainty, the metals market might well reverse their downward trend before oil prices start growing again, marking an important split between the two sectors.

The Central Asian and South Caucasus region has been badly hit by the fall in commodity prices in the last two years. Any sign of recovery is good news.

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(News report from Issue No. 306, published on Nov. 25 2016)

White Cliff progresses in Kyrgyzstan mine

NOV. 22 2016 (The Conway Bulletin) — Australian miner White Cliff said it had successfully drilled new holes in the quartz zone of its Aucu mine in Kyrgyzstan, recovering high grade ores that yielded significant gold and copper volumes. White Cliff owns a 89% stake in Aucu, which is located 350km west of Bishkek.

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(News report from Issue No. 306, published on Nov. 25 2016)