impairment of inventories includes an amount of 73 million and 15 million in respect 598042

Kazakhmys PLC (2008 and 2010)

Notes to the consolidated financial statements [extract]

7. IMPAIRMENT LOSSES – 2008 [extract]

(d) Kazakhmys Copper and MKM inventories

Impairment of inventories includes an amount of $73 million and $15 million in respect of Kazakhmys Copper and MKM, respectively. For Kazakhmys Copper, the impairment primarily relates to the impairment of stockpiled ore which is not going to be processed in the foreseeable future as its processing is uneconomic at current commodity price levels. Within MKM, a provision has been recognised to record inventory at the lower of cost and net realisable value. This primarily relates to finished goods held in stock at the end of the year which have been written down reflecting the fall in copper price in December.

8. IMPAIRMENT LOSSES – 2010 [extract]

(b) Kazakhmys Copper inventories

Included within the provisions against inventories is an impairment loss of $15 million relating to general slow moving inventory, and a reversal of a previous impairment against certain stockpiled ore of $18 million. In 2008, it was envisaged that the stockpiled ore would not be processed in the future as this would have been uneconomic at the prevailing commodity prices. However, during 2010 certain of these stockpiles were processed and the previous impairment reversed.