Eurasian hit by higher input prices

Kazakhstan-focused miner, Eurasian Natural Resources, said revenue in the first nine months of the year had increased significantly driven by higher prices for its main commodities and increased sales volumes.

However, it spooked investors by saying its financial performance had been hit by higher prices for raw materials, pushing shares down 2% in early trading.

"In line with our expectations, cost of sales for the first nine months of 2011 increased significantly due to higher input materials prices and increased volumes," the company said.

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"Prices for many key input materials, such as coke, diesel fuel, masut and explosives, have risen above our initial expectations in 2011," it added.

It was also said distribution costs had risen due to an increase in Kazakhstani railway tariffs, higher sales volumes and a shift to longer routes in its ferroalloys division

Despite this revenue for its ferroalloys division was markedly higher than in the comparable period of 2010, reflecting higher realised prices and slightly increased sales volumes.

Revenues at its iron ore division and alumina and aluminium division also rose significantly.

Eurasian said it expected production expected to remain at or close to effective full available capacity for the full year 2011.

"Our outlook for revenue and cost growth remains broadly unchanged from our expectations at the time of our half-year results," the firm said.