1. business and industrial
2. energy
3. coal

Health and Safety
18 November 2014
AGENDA
The past
Current change
The future
Performance measurement
2
PETER PLAVINA, GROUP HEAD OF HS
Metallurgical Engineer with post graduate diploma in
Occupational Hazard Management
Involved with HSE management for 20 years, in WMC
Resources (taken over by BHP Billiton), Oxiana (now
MMG) and BHP Billiton.
Worked in Papua New Guinea, Australia, Chile and
now Kazakhstan
Led WMC’s “Elimination of Fatalities Task Force” in
1997-98.
3
HS GOVERNANCE AND MANAGEMENT
BOARD
Determines strategic direction
Approves HSE and ethical policies
Group HSE Committee
Reviews framework of HS policies and standards/
compliance with legislation
Monitors and assesses Management approach to
safety
Reviews all significant incidents
Makes proposals to RemCo on appropriate HS
performance objectives
CEO
Drives the establishment of a safety-focused culture
Monitors implementation of HS strategy
Ensures compliance with HS standards and
regulation
Group Head of Health & Safety
Direct report to CEO
Divisional Heads AND Divisional Heads of HS all
have a functional reporting line to Group Head of HS
4
Board
Group HSE
Committee
CEO
Group Head of
HS
Functional HS reporting line
Gen. Dir.
Projects
Gen. Dir.
Projects
Construction
Operations
Head of HS
Projects
Head of HS
Projects
Construction
Operations
General
Director
East Region
General
Director
Bozymchak
Head of HS
East Region
Head of HS
Bozymchak
Strong commitment of KAZ Minerals Board and CEO to a step change in HS performance
THE PAST
High fatality rates
GROUP FATALITIES
High rates of permanent disability
Significant efforts at improvement over recent years
Contractors
5
Employees
Fatality rates have decreased by 30% over last 10
years
5
4
3
27
4
19
15
15
10
2010
* Year to date
5
2011
2012
2013
2014*
RECENT PROGRESS
Management and reporting systems in ongoing development
(LTIFR first reported in 2010)
Roof bolting technologies reviewed
DuPont appointed in 2010 to develop internal training
programs for senior operations and safety managers
Developing and streamlining a system of safety standards
and rules – 10 “Cardinal Rules” adopted in 2010
Review of PPE in 2011-2012
Regular inspections commenced in 2011
6
Change has started – aim now is to improve systematic approach and consistency
THE CHANGE – RESTRUCTURING COMPLETE
Disposal Assets
Copper and other metals
Coal mines
Captive Power
KAZ Minerals
Growth projects
Copper and other metals
7
KAZ Minerals to focus on safer open-pit mining, new operations to become safety
ambassadors
THE CHANGE – IMPLICATIONS FOR HEALTH AND SAFETY
WAS
Workforce
Operations
Production
>53,000
14 U/G mines
2 O/C mines
7 concentrators
1 smelter (+1 dormant)
3 power stations
approx. 300,000
IS NOW
WILL BE
10,000 + construction contractors
>13,000
East Region
4 U/G Mines
3 Concentrators
Bozymchak
1 O/C mine (new)
1 Concentrator (new)
Bozshakol/Aktogay
Under construction
East Region
Gradual modernisation and replacement of
equipment
Bozymchak
New equipment and facilities
<85,000
>300,000
Bozshakol/Aktogay
2 O/C mines (new)
2 Concentrators (new)
(Tonnes copper)
Safety challenges
8
Underground operations
Risk awareness
Safety stewardship
Cultural factors
Change has started in East Region
operations
Construction period for growth projects will
have elevated risk
Bozshakol/Aktogay
Global best practice HS management from
the start
Bozymchak and East Region
Introduce global best practice management
(from Bozshakol/Aktogay)
SAFETY MANAGEMENT FRAMEWORK
Right tools
Right people
Safe &
Efficient
Work
Right work
environment
9
Right
procedures
THE FUTURE - BOZSHAKOL AND AKTOGAY
Large-scale modern open-cut mines
State-of-the-art concentrators
Operations management teams strengthened by
expatriates with extensive top-tier global mining
industry experience
Approach to HS management:
Focus on managing risks, not regulations
Adopt contemporary standards for managing high
risk work
Focus on the management systems and
management culture
Key challenges: construction phase inherently higher
risk
Plans: Establish strong systems and culture from first
day through training – to commence December 2014
10
BOZSHAKOL - MODERN EQUIPMENT AND APPROACH
11
THE FUTURE - BOZYMCHAK
New modern facilities
Currently being commissioned
Key challenges
Remote location
Limited pool of experienced mining industry workers
Plans
HS Management approach to be harmonised with
Bozshakol and Aktogay
12
THE FUTURE - EAST REGION
Key challenges:
Ageing facilities and equipment
Inherently riskier underground operations
Some upgrades underway
Plans and priorities:
Approach to HS Management to be harmonised
with Bozshakol / Aktogay
Underground operations external review
Revise existing standards
13
PERFORMANCE MEASUREMENT
KAZ Minerals will adopt ICMM Health and Safety
Performance Indicators in full for complete
comparability
Fatalities
Total recordable injury cases
Total recordable occupational disease cases
Incident reporting and action tracking tool to be
available to all supervisors
Focus on approach to incident investigations
External independent reviews of status and progress
as required
14
PLANS AND PRIORITIES
Improve safety leadership
for site and divisional
management
Introduce best practice
reporting systems
Review standards and
rules
New wave of training
Ultimate measure of success: reduced
fatality, injury and permanent disability
rates over a sustained period
15
Goal - zero fatalities
APPENDIX
Group Restructuring
INTRODUCING KAZ MINERALS
TARGET
Delivery of Major Growth Projects
Industry leading cost position
Shareholder value creation
RESTRUCTURING COMPLETE
Company renamed ‘KAZ Minerals’
High margin, cash generative operating assets
DISPOSAL OF NON-CORE ASSETS COMPLETED
$2.2 billion of cash proceeds
Majority free float
17
DEMERGER RATIONALE
DISPOSAL ASSETS
Mature assets
‒ Lower copper grade (2013: 0.81%)
‒ High sustaining capex (2013: $415 million)
Large workforce
‒ Sensitive to inflation
‒ Significant social role
Potential to extend mine life but:
‒ High capital commitment with low financial
return
‒ Required government support
Returns do not meet the requirements of external
investors
‒ More suited to private ownership
18
Notes:
1. Sustaining capital expenditure figure excludes $9 million of spend related to MKM.
KAZ MINERALS
Five mines
‒ Higher copper grade (2013: 2.41%)
‒ Low sustaining capex (2013: $721 million)
‒ Positive free cash flow generation
Meets Group’s strategic aims
‒ Achieve sustainable positive free cash flow
‒ Focus on large scale, low cost, open pit mines,
expected:
‒ 80% of output from open pit mines by 2018
‒ 300 kt of copper in concentrate by 2018
Suited to requirements of listed ownership
TRANSFORMING THE BUSINESS MODEL
2013 DISPOSAL ASSETS AND KAZ MINERALS SPLIT
Cu in concentrate
production
EBITDA¹
Sustaining capex
Employees
72%
28%
(228 kt)
(87 kt)
47%
53%
($342 mln)
($389 mln)
85%
15%
($415 mln)
($72 mln)
81%
19%
(43,000)
(10,000)
Disposal Assets
19
KAZ Minerals
Notes:
1. Excludes special items and includes intra-group transactions of $9 million between the Disposal Assets and KAZ Minerals which are eliminated on consolidation to give the
Group’s EBITDA (excluding special items) from continuing operations for the year ended 31 December 2013 of $722 million.
.
HIGH GROWTH PRODUCTION PROFILE
2014 OPERATIONAL & FINANCIAL INDICATORS
COPPER IN CONCENTRATE OUTPUT (kt)
5 mines, 4 concentrators
Positive free cash flow
Estimated 80 - 85 kt of copper cathode
East Region¹
Bozshakol
Aktogay
By-products : 37 – 42 koz of gold,
3,300 – 3,700 koz of silver, 115 – 120 kt of zinc
Net cash cost – 120-140 USc/lb
Sustaining capex – $80-$100 million
Employees2 – 10,000
GROWTH PROJECTS
Bozshakol commissioning H2 2015
Aktogay oxide Q4 2015, sulphide 2017
Koksay at scoping stage
Employees estimated for Bozshakol and Aktogay – 3,000 at full
operation
20
Notes:
1. Current estimates for the East Region and Bozymchak.
2. Estimated number of employees of KAZ Minerals.
Today
2018
HIGH GROWTH, LARGE SCALE, LOW COST
COPPER CASH COST1 (USC/LB)
187
185
154
KGHM
Lundin
145
Freeport-McMoRan
Antofagasta
138
First Quantum
120-140
East Region and
Bozymchak 2014²
110-130
102
80-100
Aktogay³
Southern Copper
Bozshakol⁴
COPPER PRODUCTION CAGR5 (2013-2018E)
28%
23%
12%
5%
KAZ Minerals
21
First Quantum
Southern Copper
Freeport-McMoRan
3%
3%
Antofagasta
Lundin
(1)%
KGHM
Notes:
1. Lundin C1 2014 guidance for full year. KGHM net cash cost as reported in H1 2014 report. All other companies as reported net cash cost (C1) for Q1 2014.
2. Company estimate for 2014.
3. Estimated net cash cost for copper cathode equivalent sales of 110 to 130 U.S. cents per pound (in 2014 terms) in the first 10 years after the commencement of the sulphide concentrator’s operation,
calculated using a long-term molybdenum price of $30,000 per tonne.
4. Estimated net cash cost for copper cathode equivalent sales of 80 to 100 U.S. cents per pound (in 2014 terms) for the first 10 years after the concentrator has been commissioned, calculated using a longterm gold price of $1,300 per ounce.
5. Broker equity research estimates. KAZ Minerals’ production growth estimate excludes the Koksay project.
GROWTH PROJECTS OVERVIEW
Financing secured
from the China Development Bank for Bozshakol and Aktogay
Bozshakol
Aktogay
Koksay
4.1 MT of
copper
5.8 MT of
copper
3.4 MT of
copper1
Commissioning H2 2015
Capex $2.2 billion
First production Q4 2015 (oxide)
First production 2017 (sulphide)
Capex $2.3billion
Low-cost, long-life mines
22
Notes:
1. Estimated copper resource.
At scoping phase, exploration and
verification drilling to commence
in H2 2014
Capex TBC following completion
of pre-feasibility
BOZSHAKOL – TRANSFORMATIONAL PROJECT
KEY STATISTICS
PRODUCTION SCHEDULE - KEY METALS
Large scale open-pit processing 30 MT ore annually
150
1.2
Production life of over 40 years, with average production of
100 kt of copper cathode equivalent in first 10 years
Employee numbers estimated 1,500 at full operation
Close proximity to existing infrastructure
Net cash cost – 80-100 USc/lb1
Total anticipated project capital cost $2.2 billion
MINERAL RESOURCE2
Tonnage
(MT) Cu grade (%)
1,173
0.35
23
Au grade
(g/t)
0.14
Ag grade
(g/t) Mo grade (%)
0.88
0.004
1.0
100
0.8
0.6
0.4
50
0.2
0.0
0
2015
2020
Copper cathode equivalent
2025
2030
Mo in concentrate
Au in concentrate
Mo and Au in concentrate output (kt, moz)
By-products include 5,255 koz of contained gold and 57 kt of
contained molybdenum
Copper cathode equivalent output (kt)
4.1 MT of contained copper at a grade of 0.35%
Notes:
1. Estimated net cash cost for copper cathode equivalent sales in the first 10 years after the concentrator has been commissioned (in 2014 terms), calculated using a long-term gold
price of $1,300 per ounce.
2. Includes indicated and inferred material. Stated at 0.2% Cu cut-off grade. In accordance with JORC code.
AKTOGAY – TRANSFORMATIONAL PROJECT
KEY STATISTICS
PRODUCTION SCHEDULE - KEY METALS
Production life of over 50 years:
‒ Average output of 15 kt of copper cathode equivalent per
annum from oxide ore (11 years)
‒ Average output of 90 kt of copper cathode equivalent per
annum from supplied ore in first 10 years
Employee numbers estimated 1,500 at full operation
Net cash cost – 110-130 USc/lb1
Total anticipated project capital cost $2.3 billion
24
2.0
150
1.5
100
1.0
50
0.5
0
MINERAL RESOURCE2
Oxide
Sulphide
2.5
0.0
2015
Tonnage
(MT) Cu grade (%) Mo grade (%)
121
0.37
1,597
0.33
0.008
Mo in concentrate output (kt)
5.8 MT of contained copper
200
Cu cathode equivalent output (kt)
Large scale open-pit processing on average 25 MT ore annually
(sulphide ore)
2020
2025
Copper production (oxide & sulphide)
2030
Mo in concentrate
Notes:
1. Estimated net cash cost for copper cathode equivalent sales of 110 to 130 U.S. cents per pound (in 2014 terms) in the first 10 years after the commencement of the sulphide
concentrator’s operation, calculated using a long-term molybdenum price of $30,000 per tonne.
2. Includes measured and indicated resources. Stated at 0.2% Cu cut-off grade. In accordance with JORC code.
KOKSAY – LONG TERM GROWTH
KEY STATISTICS
Copper resource of 3.4 MT with upside potential,
average grade of 0.48%
RUSSIA
Bozshakol
Estimated average annual production of around 85 kt
of copper cathode equivalent,
55 koz of gold, 360 koz of silver and 1 kt of
molybdenum in concentrate1
KAZAKHSTAN
Aktogay
Capex in 2014 – $5 million
Exploration drilling to commence in
Q4 2014
‒ To provide further enhanced geological,
geotechnical and hydrogeological data
on deposit
Minimal investment until Bozshakol begins production
25
Notes:
1. In the first 10 years of operations.
Koksay
KYRGYZSTAN
Major Growth Projects
CHINA