Overview: copper bottom line

Over the last year few companies have been able to match the spectacular
performance of copper giant Kazakhmys. Last year it listed on the London Stock
Exchange, and before long the Kazakhstan group was well established in the FTSE
100. Since listing the share price has climbed 120% to £13.31.

The business is now worth £5.7bn. Next week, on Tuesday (19 September),
Kazakhymys and its finance director Oleg Novachuk will be telling the City
whether the good times are set to continue when it releases interim results for

What’s Happened?

Kazakhmys’s sensational listing in London last year was not its first in
London. The company actually traded in London from 1900 to 1910. The copper
miner was then taken private and was eventually taken over by the Soviet Union.
After the collapse of communism the company was $200m (£106.3m) in debt, but has
enjoyed a remarkable turnaround to claim a place in the FTSE 100.

Over the last year sales have climbed by 106% to £2.5bn, mainly as a result
of a copper price that has reached record highs and is still trading at around
$8,000 (£4,270) a ton.

What is going to happen?

If the analysts have called it right, Kazakhmys will continue to steam along
and build on its already spectacular profits. Credit Suisse, for example, has
already predicted that the Kazakh copper miner will report ‘its best ever
profits’ and enjoy a subsequent boost to its share price as a result.

UBS analysts have told their clients to buy the stock, because of the
company’s ability to generate cash and control costs, while Bear Stearns have
also encouraged investors to take advantage of Kazakhmys’s exposure to high
copper prices.

The Kazakhmys management team have also expressed their confidence in the
company’s business plan. Chief executive Yong Cha believes that commodity prices
will remain strong and has forecast an increase in production on 2005 levels.

For the second quarter of 2006 the company has already reported an increase
in copper cathode production of 11% and a 13% increase in copper in concentrate.
Copper cathode produced from own copper concentrate was up by 20% over the same

If the interim results show that these production levels have been sustained,
investors in the company will be able to enjoy their good run for even longer.


Kazakhmys finance director Oleg Novachuk became a very wealthy man when
Kazakhmys made its debut on the London Stock Exchange.

The listing saw Novachuk, who holds a masters degree in applied mathematics,
grow his personal fortune by £350mthanks to his stake in Kazakhmys. Novachuk is
now ranked as the 173rd richest man in the UK according to the Sunday Times Rich

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