Kazakh mining group ENRCsaid on Wednesday high commodity prices boosted revenue in the first quarter,laying the foundation for an expected robust performance in the full year.
The world's biggestferrochrome producer said the strongest performances in terms of earnings beforeinterest, tax, depreciation and amortisation during the first three months ofthe year were in the ferrochrome and iron ore divisions.
The very significantgrowth in the group's revenue was largely attributable to higher prices,particularly in the ferroalloys and iron ore divisions, it said in astatement.
ENRC added overallproduction also rose, up 2.5 percent for total ferroalloys and 3 percent forhigh-carbon ferrochrome.
We had a very strongstart to 2008, Chief Executive Johannes Sittard said.
However, control ofcost inflation continued to be a key focus for management. Overall the group istrading in line with our expectations, and I anticipate a very strong year forENRC.
ENRC, which had beenconsidering a possible takeover of rival Kazakh metals major Kazakhmys, said onTuesday it had decided against making a formal bid ahead of a Friday deadlineset by Britain's regulators.
Sittard, addressingreporters later in a conference call, said the company was now looking at otheropportunities while hinting that ENRC could revisit the Kazakhmys bid.
It's not now ourpriority. Our priority now is to go to other opportunities, he said.
ENRC said extractionvolumes rose 7.6 percent in iron ore, 6.9 percent in bauxite and 5.9 percent inalumina.
But prices were the maindriver of the strong revenue growth, with ferroalloys prices soaring 91percent, iron ore jumping 42 percent and thermal coal up over threefold.
Alumina was the only softarea, sliding 10 percent since it is linked with benchmark aluminium prices onthe London Metal Exchange.
Costs were still a concern,but management has continued to hold their growth well below revenue rises, thefirm said.
Cost of salesincreased very significantly, reflecting the operations of the new aluminiumsmelter, increased materials costs and higher payroll expenses, ENRCsaid.
Sittard said separately thecompany was looking to expand further in Kazakhstan and beyond, and possibly branch outinto new metals such as zinc.
I cannot namespecific projects we are working on but I think we have an exciting pipelineahead of us, he said. We want to grow within Kazakhstan, to expand our presence in Kazakhstan to other metals. (Editing byLouise Ireland)
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