Kazakhmys scrapped its dividend after $1bn of writedowns amid attempts by the copper producer to control costs and refocus on more efficient mines.
The Kazakhstan-focused group is splitting from a long relationship with Eurasian Natural Resources Corporation, another London-listed miner with central Asian operations, which has been dogged by corporate governance concerns and a probe by the UK's anti-fraud agency.
Kazakhmys reported a $962m net loss for the first half of the year on Thursday, after writing down $823m on the value of its stake in ENRC, which is set to be taken private by a consortium of its founders and the Kazakh government. The company also recognised a $146m impairment related to its copper operations.
The split with ENRC represents the end of Kazakhmys' attempts to diversify away from copper. The group is spending $4bn on two large open-pit copper mines in Kazakhstan that will start production in 2015 - but is reliant in the meantime on ageing, underground pits where costs have escalated substantially. Copper output has fallen by a quarter since the group listed in 2005.
The company - formerly a member of the UK's blue-chip FTSE 100 index - is reviewing operations to try to improve cash generation and profits. It is expected to sell its half-share in Kazakhstan's largest power station and is considering sales of some of the power stations that serve its mining and smelting operations.
"There is life post-ENRC for Kazakhmys," said Oleg Novachuk, chief executive. "In 18 months I think we can sit down and see what we have achieved."
Cost increases this year would be lower than previously expected, Kazakhmys said, after gross cash costs of producing copper - excluding cash generated from selling by-products - rose 5 per cent in the first six months. For the full year, gross cash costs should rise by up to 8 per cent compared with the previous estimate of up to 12 per cent.
However net cash costs rose 28 per cent because of lower prices for by-products such as gold.
To preserve cash, Kazakhmys will trim about 10 per cent from capital spending on its mines and will not pay an interim dividend, which Mr Novachuk said would be "inappropriate in this environment".
Louise Collinge at Investec said not paying a dividend was the "right decision for cash conservation" but said Kazakhmys' core mining business was in trouble. An operational review "should identify whether the group can make the changes necessary to improve cash generation", she said.
First-half sales rose 4 per cent to $1.6bn in spite of a 9 per cent fall in the average copper price. Earnings, before interest, tax, depreciation and amortisation, excluding one-off items, fell 29 per cent to $714m compared with the same period a year ago.
Kazakhmys is getting $875m in cash from selling its ENRC stake, as well as 77m of its own shares that will be cancelled.
Shares in the company were up just under 1 per cent in mid-afternoon trading at £3.04.
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