London-listed Kazakhmys has pledged to invest some $400 million in expanding productionfrom the Ekibastuz coal-fired power plant in the Pavlodar oblast to meet rising power demand in Kazakhstan. The company, which owns a 50 per cent stake in the plant, plans to raise output from Ekibastuz to 3,500MW by end-2014,accelerating its long-term investment programme by some 12 months. The other 50 per cent stake in the plant is owned by state holding company Samruk-Kazyna, which purchased its equity from Kazakhmys in March for $681 million.
Ekibastuz is currently producing around 2,500MW from five out of eight turbines, and the plan is for the other three turbines to be put back into operation, nudging production back towards its previous level of 4,000MW. One of the three is now being upgraded, with work on a second due to kick off soon. Kazakhmys supplies around 80 per cent of its electricity output to the Kazakh grid, with the remainder sent north to Russia. Average electricity tariffs rose more than 60 per cent in the first half of the year compared to H1 2009.
It's been a good year so far for Kazakhmys, which reported an 11 per cent rise in first-half profits compared to last year, on the back of higher prices for its copper sales. In January-June, Kazakhmys recorded a net income of $574 million, with revenues rising over 35 per cent to $1.52 billion. In addition to its copper and electricity interests, Kazakhmys owns a 26 per cent interest in its rival London-listed mining firm ENRC, which was the focus of a Kazakhmys takeover approach more than two years ago. The company also has zinc and gold assets in Kazakhstan and is involved in low-level oil and gas exploration. Kazakhmys is part-owned by the Kazakh government, which is represented on the board by Daulet Yergozhin, head of the tax committee at the ministry of finance.
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© 2010 Menas Associates
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