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Kazakhstan's prominent mining company, KazZinc, has reported a substantial decrease in production volumes for nearly all its key metals during the first quarter of this year. The downturn was detailed in a production report from the company's main shareholder, the Glencore commodity group, which holds approximately 70% of KazZinc's shares.

Reasons Behind the Production Decline

The report indicates a 29% reduction in zinc production, amounting to 13,800 tons. This decrease is primarily attributed to a shortage of high-quality concentrates sourced from external suppliers, which consequently limited the processing capacity of the company's own raw materials.

Similarly, lead production saw a significant drop of 55%, totaling 9,100 tons. The reasons cited for this decline mirror those affecting zinc production, pointing to challenges in securing necessary raw material inputs.

Gold and Copper Production Figures

Gold production experienced a sharp decline of 56%, falling to 75,000 ounces (approximately 2.3 tons). This reduction is linked to a lower initial gold content at the Altyntau Kokshetau mine and ongoing reconstruction work at one of the company's two processing plants.

Copper production also decreased by 31%, reaching 2.9 thousand tons. This figure represents a 31% drop compared to the same period last year and a 49% decrease from the previous quarter.

In contrast, silver production saw a more modest decline of only 5% year-on-year. However, the production of silver concentrate experienced a dramatic reduction of up to 95%.

Outlook and Future Implications

The overall slump in KazZinc's production figures raises concerns about the company's operational performance. This situation comes at a time when a deal for Glencore to acquire a controlling stake in KazZinc was reportedly being planned. The potential impact of these production challenges on the ongoing sale and purchase process remains uncertain.

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