Central Asia Metals Share Discussion Threads

[pughman] 09/3/2022 11:33

The market cap is under £350m now. CAML paid £300m for SASA and must have £30m+ net cash, so the market is putting very little value on Kounrad, which in 2021 generated over $100m EBITDA. I bailed out of here recently, because the company is a sitting duck to a prolonged and escalating war in Ukraine.

[zaphod99] 09/3/2022 11:15

If Kazakhstan continues to align with Russia, will CAML still be welcome in Kazakhstan or will the assets be expropriated?We've already seen US, Canadian and British miners forced out of neighbouring Uzbekistan and Kyrgyzstan in highly questionable circumstances in recent years.The geopolitical risks for CAML have undoubtedly increased as a result of recent events.

[cthompso] 09/3/2022 10:45

With oil you're stuck with where the pipelines run. If it's shipped out on the back of a truck then the options are rather more open...

[spoole5] 09/3/2022 10:12

Come on CAML get buying back these cheap shares!

[mount teide] 09/3/2022 08:39

Likely to be a turbulent year geopolitically for Kazakhstan - been reducing my holding further today.


Kazakhstan Braces For Economic Fallout From War In Ukraine - Oilprice.com

Kazakhstan is facing economic crisis as the war in Ukraine threatens crude oil exports, which alone account for around 14 percent of GDP and 57 percent of exports.

The bulk of these oil exports pass through a pipeline from Kazakhstan’s western oil fields through southern Russia to Russia's Black Sea oil terminal at Novorossiysk. The pipeline, owned by the Caspian Pipeline Consortium (CPC), can handle around 60 million metric tons a year.

At just 200 kilometers from the Ukrainian port of Mariupol, where some of the fiercest fighting is underway, Novorossiysk is close enough for oil tankers to incur a "war risk insurance premium," which according to energy news agency S&P Global Platts has been high enough to deter buyers since the Russian invasion of Ukraine began last month.

Platts reported that shippers have been cancelling scheduled bookings to collect tanker loads of crude from Novorossiysk.

One of the main destinations for crude exported from the terminal is the Ukrainian port of Odessa where it is fed into a pipeline network to Europe. With Odessa expected to come under Russian bombardment within days, that route is effectively closed.

Production at Kazakhstan's giant Chevron-operated Tengiz oil field and oil flow through the CPC pipeline is continuing as normal, although thanks to the "war risk" the price of Kazakh crude has fallen, despite global oil prices soaring to their highest since 2008.

Unfortunately for Kazakhstan, the risk is not confined to the physical danger posed by the conflict.

Around 10 percent of the crude oil carried by the CPC pipeline comes from oil fields in the Russian sector of the Caspian, which is blended with the Kazakh crude. With the U.S. and EU discussing a ban on Russian oil imports, buyers are wary of being left with a tanker full of crude they would be unable to deliver.

The pipeline’s ownership too could pose problems. The Russian section is operated by CPC-R – a company headquartered in Moscow – while the pipeline itself is owned by a consortium in which Russian state firm Transneft holds 24 percent and subsidiaries of sanctioned Russian oil giants Lukoil and Rosneft together hold another 20 percent. Currently it is unclear whether this will subject the pipeline to direct sanctions.

Flow of Kazakh crude to Novorossiysk may be continuing for now, but storage tanks at the terminal have the capacity to hold only about eight days of flow at full capacity. Once full, flow will have to halt which in turn would force a cut in oil production at Kazakh fields.

Kazakhstan does have alternative export routes, but none could make up for the losses incurred if the CPC shuts down.

Up to a quarter of Kazakh crude is exported via other Russia pipelines including the 4,000-kilometer Druzhba network that supplies refineries across eastern Europe and as far west as Germany, although that route also faces closure if the European Union opts to ban oil imports from Russia.

Kazakhstan also has an eastern export route, a pipeline to China capable of carrying 20 metric tons per year, or about one-third the CPC’s capacity.

That line too carries crude oil from Russian fields which if blocked would leave more capacity for Kazakh exports.

Another option for Kazakh oil producers could be the Baku-Tbilisi-Ceyhan pipeline from Azerbaijan through Georgia to Turkey's Mediterranean, which already carries some Kazakh crude.

The route, which has a maximum capacity 50-million tons per year and involves transporting the oil across the Caspian by tanker to Baku, is logistically more complex and hence more expensive to utilize than the CPC pipeline.

The more so since January 2021 when Ankara hiked its transit fee from $0.55 per barrel to between $1.50-$2.00 per barrel. The reason for the price hike is unclear but the volume of crude transited through the line last year was down around 4 percent compared to 2020 – despite increased demand for oil products as the COVID-19 pandemic eased – and down by 22 percent on 2018.

Data from Turkey's state pipeline operator Botas, which operates BTC, shows that flow through the line last year was only 55 percent of capacity, leaving 22.5 million tons of capacity unused – sufficient for a sizeable chunk of Kazakh exports currently going to Novorossiysk.

Azerbaijan's state oil company SOCAR, which is a major shareholder in BTC and which manages the existing transit of Kazakh crude, said on March 4 that "currently" no extra Kazakh volumes were being exported.

Managing the transfer of exports to from one pipeline to another is likely to be fraught with legal, commercial, and logistic technicalities; a significant increase in Kazakh exports to Ceyhan won't be achieved overnight.

One further complication exists.

According to BP, another major shareholder in BTC, the Kazakh oil currently exported through the line is blended by SOCAR with other crudes from Turkmenistan and Russia.

Neither SOCAR nor BP replied to requests for further comment.

To date, Azerbaijan, Georgia, and Turkey, through which the pipeline passes, have all stated their opposition to imposing any sanctions of their own on Moscow.'

[zho] 08/3/2022 13:21

Saxo this morning:

Nickel, traded on the London Metal Exchange and used in stainless steel and electric-vehicle batteries, has become embroiled in a historic short squeeze which saw it reach a historic $101,000 per ton in early European trading, a four-fold increase in the price since the beginning of the Russian war in Ukraine. Traders holding short positions, some of which are against physical holdings, have been forced to cover positions as supplies from Russia, which produces 17% of the world’s top-grade nickel, has dried up. Together with gas, wheat, and crude oil these are the contracts that have endured most of the pain related to Russia’s war and sanctions.

[spoole5] 08/3/2022 12:57

Nickel is rising because of short term supply issues, copper has a long term structural demand story.

[spoole5] 07/3/2022 16:50

I'm sure they will on 29th.

[mondex] 07/3/2022 16:13

What would help is if they issued an announcement clarifying their situation, explaining their Cu sales are all ex factory gate.

[spoole5] 07/3/2022 11:49

Tough one. Uncertainty not helpful, khasakstan unlikely to be drawn in. The route out is the issue. If they are managing to carry on with no disruption the cash flow will be phenomenal

[garycook] 07/3/2022 11:21

So are EVR,POG POLY,and RAV,but look at their share price s !

[zaphod99] 07/3/2022 11:16

Geoplitical risk.Kazakhstan closely aligned with Russia.

[garycook] 07/3/2022 11:11

Why is CAML down 6%.When all other Metal shares are up big time,and Copper,Lead and Zinc are also up ???

[spoole5] 07/3/2022 09:58

Share buyback coming with all that cash?

[geckotheglorious] 06/3/2022 16:57

Taxes will be rising across the board, especially for profitable miners.
Why? Because most governments are broke.

Zangdook is spot on. More mining taxes are inevitable sadly.

[zho] 06/3/2022 14:28

I don't think CAML has commented on this yet, but it looks as if income tax will probably increase from 20% to 24%. CAML paid $16.0 million in income tax in FY2021 so this would have meant an increase of $3.2 million, or about 1.8p per share.

I can't see anything on how much MET might increase.

"A spokeswoman for Central Asia Metals, which produces 14,000 mt/year copper in Kazakhstan, told S&P Global Platts, "It is our understanding that taxation is currently being reviewed by the government, but until further information is available we would not want to speculate on any potential outcome." The miner currently pays MET of 5.7% and corporate taxes of 20%."

[lord gnome] 06/3/2022 14:15

Lol. Nice try zangdook. Sadly, I think their government might not see it that way.

[zangdook] 06/3/2022 13:57

Perhaps it's a frivolous question, but are we treated as a miner for tax? We're really a waste processing company in Kaz.

[zaphod99] 06/3/2022 12:53

The geopolitical risk here has increased as a result of recent events and taxes look certain to rise for foreign miners.

[andydaf] 06/3/2022 11:05

whilst i understand peoples worries about the political position/economic problems that may occur in kazakhstan with copper through 10000,zinc 4000 and lead nearly 2500 you pay your money and take your choice here.Not many safe places to mine now days and whilst i see some saying spain may well be a better bet i would suggest energy prices will be having a marked impact on many producers.Every week that goes by cash is building here.As always GLA

[mount teide] 04/3/2022 08:53

Brad_K - thanks for posting your reply from the company reply.

[brad_k] 04/3/2022 08:44

MT Can't disagree with your concerns over Kazakhstan in general, however I did email CAML about the situation regarding Kounrad output. I will post the reply below as it did clarify, for me at least, how CAML monetise their copper output.

Reply from CAML corporate relations:

"Thanks very much for your email. Yes, such a terrible situation in Ukraine…..

We sell over 95% of our copper cathode to metals trader, Traxys, which buys the metal from us at the mine gate and pays us for it at that point. Transport, country of sale etc is all their decision. You are correct that they currently sell the majority to Turkey but it does not go by rail, it goes by trucks, either through Russia to Georgia and then Turkey or south through Turkmenistan. The reality for Traxys is that if there were any challenges on their routes, they would have to find another buyer for the copper / use a different route.

I hope that helps.

Kind regards, Louise

Louise Wrathall
Director of Corporate Relations"