(Minews) - Kazakh copper producer Kaz Minerals said on Thursday its Bozshakol project will start delivering "very limited" production in the last quarter of this year, as it posted annual core profit slightly above analysts' forecasts.
Kaz, formerly known as Kazakhmys, had said Bozshakol would start producing in the second half of 2015 and some analysts said they will have to revise their output expectations from the project this year downwards.
Like its peers, the London-listed company is under pressure from a steep fall in the price of copper.
In response to shrinking margins Kaz implemented a restructuring last year which has transformed it into a smaller but lower cost copper producer. It now plans to grow its output again through three new projects: Bozshakol, Aktogay and Koksay. Bozshakol and Aktogay are both expected to be commissioned by the end of this year.
"It will be very limited production this year," Chief Executive Oleg Novachuk said, talking about Bozshakol, in a call with journalists. "It's very important for us to show to the market that we can commission production from both projects simultaneously, which is quite unusual and difficult to do, but we will do that."
Kaz reported core profit, or earnings before interest, tax, depreciation and amortisation (EBITDA), of $355 million from continuing operations, down from $359 million a year earlier but slightly above forecasts.
It said cost-control measures such as cuts in contractors rates helped to offset a 9 percent fall in revenue due to weaker copper prices.
"In our view, today's results highlight the substantial progress the group has made through its restructuring," Citi analysts said in a note.
Under the revamp plan completed last year, Kaz hived off some of its oldest and least profitable assets to a private company owned by two of its shareholders to focus on lower-cost, open-pit mines and its growth projects.
Its production of copper cathode dropped to 83,500 tonnes in 2014 from 294,000 tonnes in 2013. It expects to produce 80,000-85,000 tonnes in 2015 and then boost output to about 300,000 tonnes by 2018 and 350,000 a couple of years later.
The company on Thursday also announced the appointment of John MacKenzie, a mining executive who previously worked at Anglo American, as an independent non-executive director with effect from March 1.
