Kazakhmys PLC announces that the Government of Kazakhstan has agreed to reduce mineral extraction tax (‘MET’) rates at some of the Group’s mature assets. Lower MET rates have been applied to the deposits in the Zhezkazgan Region, excluding Zhomart mine, and at Konyrat mine in the Central Region.
The assets benefiting from lower MET rates are all within the two regions which have been identified for potential disposal, as part of the proposed restructuring announced on 27 February 2014. These assets have been particularly affected by declining grade and low profitability.
The new MET rates are effective retrospectively from 1 January 2014 and are applicable for one year after which a further application can be made. The value of the reduction for a 12 month period, at current metals prices, is approximately $40 million.
Oleg Novachuk, Chief Executive Officer, said: “We welcome this decision to reduce mineral extraction tax rates at our most challenging assets. Improved cash generation may encourage future investment, potentially extending the life of the assets and helping to maintain employment.”