KAZ MineralsPLC, will spend US$100 million less than expected on its copper project inKazakhstan because of the sharp devaluation of the country's tenge currency andthe experience gained bringing its Bozshakol mine into operation this year, the companyconfirmed in a July 22 market statement.
The cost of Aktogay is now expected to total US$2.2 billion,the company said, in an announcement aimed at easing investors' concerns aboutthe company's heavy debt load and stubbornly low copper prices.
Total debt stood at US$2.43 billion as of March 31, prompting someinvestors to question the company's ability to repay if copper remains atUS$4,966.50 per tonne — down 30% from three years prior.
In a note to clients in April, brokers Investec said thedebt "clearly weighs on the investment outlook."
Bozshakol started initial production of copper concentratein February, while Aktogay is scheduled to start up production of copperconcentrate from sulfide ore in 2017.
After the price of crude oil — the country's biggest export— fell to below US$50 per barrel in 2015, the Kazakh government abandoned itsmanaged peg to the U.S. dollar last year, allowing the tenge to devalueapproximately 50%.