Kazakhmys advances as cash costs fall, forecasts higher output

London-based Kazakhmys gained as much as 51 pence, or 5.6 percent, to 968.5 pence, and traded at 955.5 pence by 9:06 a.m. local time. It has risen more than fourfold this year, boosting the company's market value to 5.1 billion pounds ($8.3 billion).

Net cash costs in the first half were 76 cents a pound, compared with $1.16 for the whole of 2008, Kazakhmys said today in a Regulatory News Service statement. Annual output is set to exceed 300,000 metric tons as the company will produce an additional 15,000 tons from stockpiled material, it said.

"These results will be seen as strong by the market, with Kazakhmys regaining a reputation as a competent operator of assets in challenging times," Michael Rawlinson , an analyst at Liberum Capital in London, wrote in a note today.

Net income dropped to $516 million, or 96 cents a share, from $608 million, or $1.34, a year earlier, the company said. Sales declined 42 percent to $1.65 billion.

Kazakhmys is cutting costs and spending after the economic slump curbed demand. The company said it won't pay a first-half dividend after scrapping the payout in the previous six months and singled out cost savings and spending reductions totaling $450 million. Copper for three-month delivery has fallen 30 percent since reaching a record $8,940 a ton last year, Kazinform refers to Bloomberg.

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