Reuters reported that Kazakh miner Kazakhmys posted 20% rise in H1 underlying profit boosted by stronger copper prices and announced a surprise share buyback in London worth up to USD 250 million.

Its board has also approved USD 1.8 billion development of a major copper growth project equivalent to a third of the miner's current output at Bozshakol in northern Kazakhstan.

Earnings before interest, tax, depreciation and amortization rose to USD 1.61 billion from USD 1.34 billion with its 26% stake in fellow FTSE 100 miner ENRC contributing USD 543 million.

ENRC's image has been battered by the purchase of a Congolese asset expropriated from rival First Quantum last year and a damaging boardroom spat. It is carrying out a review of its governance including the board's size and composition.

Mr Oleg Novachuk CEO of Kazakhmys said that "Of course we are concerned about the problems of corporate governance in ENRC. Kazakhmys' chairman had offered assistance to ENRC, when Richard Sykes was a senior independent director but that this was refused. We should wait until the corporate governance review comes out and then we will see what we can do."

Mr Novachuk said that "I think we will still keep that stake. Currently it is probably too early or too untimely to think about what we will do with the ENRC stake because of the share price performance."

Mr Peter Mallin analyst of Canaccord Genuity said that "The main catalyst to releasing value in Kazakhmys shares would be a resolution over the governance concerns within ENRC."

The London listed shares in Kazakhmys have fallen 38% this year prompting the company to undertake a share buyback plan. The current share price does not appropriately reflect the fundamental value of Kazakhmys and significantly undervalues the company and its growth prospects.

(Sourced from Reuters)