KAZ Minerals begins testing and commissioning at Aktogay

KAZ Minerals announced on Tuesday that the testing and commissioning of the main Aktogay sulphide concentrator had commenced.

The FTSE 250 company said production of saleable copper concentrate from sulphide ore is expected by the end of the first quarter of 2017.

Production guidance for Aktogay in 2017 will be announced with the group's full year results on 23 February, the board promised.

It said the Aktogay project budget had been reviewed and reduced by $100m to $2.1bn, with the saving achieved through faster than anticipated progress in construction of the concentrator, a partial release of contingency and from the continued benefit of a local supplier strategy and sustained weak tenge.

The timing of the remaining capital payments had also been updated, with certain payments previously expected in late 2016 now anticipated in early 2017 and $70m relating to the expansion of oxide ore heap leach cells deferred to 2018.

KAZ said the resulting capital expenditure profile for the project was now expected to be approximately $100m in H2 2016, $240m in 2017 and $370m in 2018

The $370m guidance for 2018 includes $300m of payments relating to work in 2016 and 2017 that was deferred under an agreement with the principal construction contractor in November.

“We are happy to be able to announce the start of commissioning activities at the Aktogay sulphide concentrator and a further reduction of $100m in the project budget,” said chief executive Oleg Novachuk.

“We are now focused on ramping up production at Aktogay and Bozshakol to deliver industry-leading copper production growth.”