Copper and the Making of Kazakhstan’s New Metal Moguls – by Paolo Sorbello (The Diplomat – July 10, 2017)

Commodity prices have found a “new normal” but copper is doing much better.

What seemed to be a widespread disease impacting commodity prices turned out to be a selective virus, against which some commodities proved immune, at least in the long run. The performance of copper prices over the last few months has contributed to the changing landscape of Kazakhstan’s richest people.

Together with the recent reorganization of the banking sector, commodities have played a major role in swaying the fortunes of the Central Asian country’s elite. After hovering around $2/lb for most of 2016, copper prices jumped 25 percent in November 2016 and have remained around or above this level for the past eight months. On June 30, Bloomberg quoted the precious metal at $2.7/lb.

In the same period, despite a roller coaster ride peaking above $55/barrel, Brent oil prices have returned to the same level of November 2016, at $46/barrel. Copper clearly outperformed other major commodities and this had a decisive effect in reshuffling Kazakhstan’s richest people.

KAZ Minerals, a copper producer listed in London, has improved its position over the past months. In its annual report for 2016, the company reported a 43 percent growth in revenues, up to $969 million, compared to the previous year, after it started operations at its new sites in Bozshakol and Aktogay.

In late April 2017, the company also announced that its copper production had significantly grown in the first quarter, compared to the same period last year. Taking November 2016 as a benchmark, KAZ Minerals’ share price almost doubled in the past eight months to £5.41 ($6.97), reaching a peak at £5.92 in February. Before the surge in recent months, KAZ Minerals’ shares had traded below £4 for about three and a half years.

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