Kazakh copper miner Kazakhmys has concluded all of its sales contracts for the year, signalling strong copper demand, after it posted better than expected output and said it would meet its annual target, according to Reuters. "The contracts are all signed for 2010, there's been good demand," said John Smelt, head of corporate communications. The sales contracts account for about 90 percent of expected output of Kazakhmys, the world's eighth biggest copper producer. Investors are keenly watching for signs of healthy underlying demand as global recovery takes hold in the West as well as China, the world's biggest copper consumer. The London-listed firm said copper cathode output for the first three months of the year from its own material fell 4.3 percent to 78,400 tonnes because last year's production was boosted by the processing of stockpiles of ore. "Production has gone well in Q1 2010 and we remain on target to produce just over 300,000 tonnes of copper cathode during the year," Chief Executive Oleg Novachuk said in a statement. Credit Suisse analyst Liam Fitzpatrick said the production figure beat his estimate of 70,000 tonnes. "In our view the market attaches very limited value to some of the non-core assets and longer term growth projects ... and KAZ remains an attractively priced stock," he said in a note. The firm has a 2010 price earnings ratio of 7.85 versus 10.32 for the sector, according to Thomson Reuters data. Kazakhmys shares climbed 2.2 percent to 1409 pence by 0720 GMT, outpacing a 0.1 percent increase in the UK mining index. NEW MINES The firm said it was on track with growth projects and the balance sheet was healthy, with net debt up slightly to $722 million at end-March from $689 million at the end of 2009. New mines would allow the firm to boost annual production to 350,000 to 450,000 tonnes in five years from about 300,000 tonnes this year. The first project, the Bozymchak copper-gold mine, will begin production in September, and the major Bozshakol mine is due to launch in late 2013. Earlier this week, Kazakhmys agreed a joint venture for the Aktogay project, selling a 49 percent stake to China's Jinchuan Group Ltd, which will share the development costs of $1.5-$2.0 billion. Even though first quarter output was slightly weaker, the firm sold copper at $7,037 per tonne, more than twice the $3,319 per tonne in the first quarter last year at the depth of the recession. In March, the company posted a halving in consolidated annual earnings per share due to weak prices and higher taxes, but said it expected lower tax rates this year.
