ENRC promises fresh blood for board

Revenues rose 17pc to $7.7bn last year, but profits before tax fell 7.5pc to $2.8bn as ENRC faced spiralling costs for its raw materials, energy, and labour. Total costs at the company rose 24pc last year, it said. Mehmet Dalman, the former banker who became chairman of the Kazakh miner on February 3, said in his first official address to investors in his new role said the group could not afford to \"stand still\". \"We have continued to review board composition, mindful of the need to progressively refresh the board, with a view to affording it with talented and dedicated directors exhibiting, amongst other qualifications, domain knowledge, long experience of best-in-class corporate governance practices, as well as corporate finance and strategy,\" he said in a statement. Mr Dalman replaced Johannes Sittard, who had been expected to stand down following a corporate governance review in the wake of last summer\'s boardroom battle. The turmoil saw deputy chairman Sir Richard Sykes and non-executive director Ken Olisa removed from the board. Felix Vulis, ENRC\'s chief executive, said however that the plans were \"not another corporate governance review\". He [Mr Dalman] wants to have more quality members on the board from the mining and processing business, people who have more experience in Africa,\" he said. \"It is an internal review. The main point of the restructuring is to have fresh blood.\" Rising costs are proving a headache for many miners as they compete for staff and equipment, particularly in booming mining territories. ENRC\'s rival Kazakhmys recently reported \'\"real\" inflation in Kazakhstan is almost three times the official rate. \"Looking at almost every single set of results, cost inflation is coming back in a big way,\" analyst Andrei Kroupnik at Collins Stewart said, adding this could prompt downgrades to analysts\' valuations across the sector. ENRC announced a final dividend of 11c per share, payable on June 21 and taking the full-year dividend to 27c, compared to 30.5c the previous year. The company also said it had called a shareholder vote in April on its plans to spend $650m buying outstanding shares in coal producer Shubarkol from its founders, adding it was now confident independent shareholders would back the deal. The deal was postponed in November after some expressed concerns. Three Kazakh oligarchs own more than 35pc of ENRC\'s equity, while a further 12pc is owned by the Republic of Kazakhstan, and Kazakhmys, the FTSE100 miner, owns 26pc.