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Our strategy is reviewed by the Board on an ongoing basis to ensure that it remains relevant to the Group’s requirements.
To become a world-leading developer and operator of large scale, low cost copper mines.
To deliver value for our shareholders with a strong commitment to the safety of our employees, the environment and the communities around us.
We will seek to undertake growth projects which have the potential to deliver a high return on investment, including brownfield expansions of existing assets and new greenfield development projects.
Improve health and safety, increase productivity and maintain low operating costs and capital expenditure.
Seek out natural resource opportunities, focusing on copper assets in Kazakhstan and the surrounding region.
The success of the strategy is measured using relevant KPIs and risks are controlled through the risk management framework.
This is a measure of the underlying profitability of the Group, widely used in the mining sector.
EBITDA is earnings before interest, taxation, the non-cash component of the disability benefits obligation, depreciation, depletion, amortisation, mineral extraction tax and royalties, as adjusted for special items.
EBITDA (excluding special items) was almost three times higher than in 2016 due to sales volumes from the ramp up of production at Bozshakol and Aktogay combined with an increased copper price.
Monitors Group cash flows used to fund returns to shareholders, reduce debt and invest in the future growth and development of the business.
Net cash flow from operating activities before capital expenditure and non-current VAT associated with expansionary and new projects less sustaining capital expenditure.
Group Free Cash Flow for the year improved by $512 million compared to the prior year with an inflow of $452 million (2016: outflow of $60 million) as the increase in profitability was reflected in strong cash generation from the Group’s operations, in particular Bozshakol and Aktogay.
EPS based on Underlying Profit can be used as an indication of profits available to shareholders for distribution or retention in the business.
Profit/(loss) before special items and other non-recurring or variable non-trading items, and their resulting taxation impact, divided by the weighted average number of ordinary shares in issue during the year.
EPS based on Underlying Profit/(Loss) increased by more than 160% to $1.07 per share from $0.40 per share in 2016. Underlying Profit/(Loss) rose by $296 million to $476 million due to increased contributions from the Bozshakol and Aktogay operations and improved copper prices, partly offset by a $116 million higher interest expense as the capitalisation of financing costs to the cost of the projects ceased during 2017.
Ore processed indicates our ability to efficiently process ore that has been extracted, to maximise output.
Kilotonnes of ore processed from our mining operations.
Ore processed of 41,671 kt (2016: 15,688 kt) was over two and a half times more than the prior year due to the ramp up of volumes processed at Bozshakol and the start-up of the Aktogay sulphide concentrator.
This measures the performance of the Group in maintaining its low cost base whilst maximising revenues through the sale of by-products.
The total of cash operating costs excluding purchased copper products less by-product revenues, divided by the volume of copper cathode equivalent sales.
The 2017 net cash cost of 66 USc/ lb was slightly above the Group’s net cash cost in 2016 of 59 USc/lb. The Group is a low cost producer and its 2017 net cash cost is believed to place it amongst the lowest of pure-play copper companies globally. Excluding the impact of by-product credits, the Group’s gross cash cost in 2017 of 138 USc/lb has reduced compared to 156 USc/lb in 2016, due to increased production from the lower cost operations of Bozshakol and Aktogay.
Copper, the Group’s principal product, represents 79% of Gross Revenue and its production is the main operational indicator.
Payable copper metal in concentrate and copper cathode produced from oxide ore at Aktogay.
Copper production increased by 80% to 258.5 kt from 143.5 kt in 2016 due to the contribution from sulphide operations at Bozshakol and Aktogay.
Indicates how much cash flow is required to maintain current output and how efficient we are at controlling sustaining capital expenditure.
Sustaining capital expenditure for our mining operations, divided by copper production volumes.
Maintenance spend per tonne of copper production has decreased by 60% compared to the prior year following inclusion of the Bozshakol and Aktogay operations which delivered significant production volumes with limited sustaining capital expenditure.
A key measurement of the Group’s operational health and safety performance.
The number of employee and contractor fatalities directly occurring from an occupational injury or disease at the Group’s operations during the year. The definition of an occupational fatality is taken from the ICMM health and safety performance indicators published in January 2014, which the Group adopted in 2015.
Four employee fatalities occurred in 2017 in the Group’s underground mines in the East Region, compared to six fatalities in 2016. KAZ Minerals considers all fatalities to be avoidable and has a target of zero fatalities.
TRIFR measures the frequency of occupational injuries occurring at the Group’s operations and is therefore a key indicator of our health and safety performance.
The number of Total Recordable Injury (TRI) cases occurring for every million man-hours worked during the year. The definitions of TRI and TRIFR are taken from the ICMM health and safety performance indicators published in January 2014 which include new injury cases of sufficient severity that require medical treatment beyond first aid or result in the worker’s inability to perform his or her routine work function on the next calendar day. Historically, the Group reported injury rates as LTIFR (lost time injury frequency rate). Following the adoption of the ICMM indicators, the Group has restated its injury statistics for 2014 to TRIFR. The definition of injuries under TRIFR is wider than under LTIFR as it includes injuries which did not result in lost time, resulting in a higher rate under the new KPI.
There were 51 TRI cases in 2017, in line with the 51 incidents recorded in 2016. Due to a reduction in man hours worked, the TRIFR has increased to 1.60 from 1.20 in the prior year. The main causes of injury across the Group were falls from same height, falls from height and rock falls. There were 13 serious injuries out of a total number of 51 recordable injuries, compared to 19 serious injuries in 2016.