Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

A recent leak in Central Asia Metals’ (CAML’s) Sasa tailings storage facility 4 (TSF4) could affect the company’s annual lead and zinc production guidance.


CAML noted in its H1 2020 operations report, which was released along with its financials for the same period on September 16, that production at TSF4 remained suspended as the company worked with the “relevant authorities” on a root cause analysis and a timeline to resume operations at this facility. 


The company noted it might lower its current annual guidance of producing 23,000-25,000mt of zinc and 30,000-32,000mt of lead in 2020 from the Sasa mine in North Macedonia, where TSF4 is located. The facility was shut down after the leak that was discovered on September 14. However, it does not expect an extended shutdown of the TSF4 facility, CAML said. 


CAML stated it was confident about achieving its guidance for copper production from its Kounrad mine and processing facility in Kazakhstan. The company plans to achieve between 12,500-13,500mt of copper output from this mine by the end of the year.


In H1 2020, CAML produced 12,203mt of zinc from Sasa, up from 11,517mt produced during the same period last year. Its zinc sales volumes also increased to 10,273mt in the first six months of the year from 9,708mt in H1 2019. The company’s lead production from Sasa stood at 15,140mt in H1 2020, up from 14,357mt produced in H1 2019, while lead concentrate sales volumes rose to 14,445mt from 13,731mt during the same period under review. 


Copper production at Kounrad increased slightly to 6,607mt in H1 2020 from 6,594mt during the same period last year, while sales rose to 6,600mt from 6,461mt during the same period under review.


The company’s cash cost for zinc reduced to 43¢/lb in H1 2020 from 47¢/lb in H1 2019, while cash costs for copper fell to 41¢/lb from 51¢/lb during the same period. 


However, CAML’s net revenue suffered due to lower commodity prices in the first half of the year. The low-cost base metals producer reported a net revenue of $70.8mn in the Jan-June 2020, down from $85.6mn in H1 2019. The company’s profit before tax declined to $24.3mn in H1 2020 compared with $35.5mn in the same period last year.

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