KAZ Minerals plc (LON:KAZ) today announced an update on the Aktogay Expansion Project including a reduction in capital expenditure guidance for 2020.
Following a review of construction progress to date and the near-term impact of Covid-19 restrictions, the project remains on track for completion in 2021, as previously guided, but is now expected to commence production in late 2021. Measures taken to control the spread of Covid-19, both in Kazakhstan and internationally, have negatively impacted the supply chain, reduced the availability of local contractors and prevented vendor representatives from entering the country to support equipment installations.
After total spend on the project of $663 million to 31 December 2019, capital expenditure in 2020 is now forecast to be $300-350 million, which is lower than the previous guidance of $400 million. The balance of the unchanged $1.2 billion project budget will be incurred in 2021.
Oleg Novachuk, KAZ Minerals Chair, said: “Our first priority is to keep our employees and contractors safe during this difficult time. We are also working hard to meet the challenges posed by Covid-19 and to maintain progress at the Aktogay expansion project. Whilst we still expect to deliver the project within our guided timeframe, we now anticipate that production from the new Aktogay concentrator will commence towards the end of 2021 and capital expenditure in 2020 will be lower than previously indicated, at around $300-350 million.”
