Grupo Mexico plans to invest $882mn over the next three years in various projects to enhance its production capacity in Mexico’s Sonora region.
At its Buenavista mine, the company is investing $413mn to build a concentrator that will produce around 80,000mt of zinc per year. The concentrator, which will be operational by 2022, will effectively double the group’s zinc production capacity, the miner indicated while reporting its Q3 2020 earnings on Oct 26.
Another project, which requires an investment of $159mn at its Pilares mine will improve Grupo Mexico’s copper ore grades once it becomes operational in H1 2022. The project involves building a road spanning 25 km to transport ore between the firm’s Pilares mine and its primary crushing plants at La Caridad.
The company is also developing the El Pilar copper mine in Sonora at a cost of $310mn with an expected start date in 2023. The mine has proven and probable reserves of copper at 325mn mt of ore, graded at 0.287pc copper. The project will produce copper cathodes.
Copper production and sales
In the nine-months ended September 30, 2020, the miner’s total copper output was almost flat, rising by 0.3pc to 838,989mt from 836,224mt in January-September 2019. The firm’s copper production declined by 2pc to 280,584mt in Q3 2020 from 286,335mt in the same quarter last year. The company attributed the decline to lower production at its mines in Peru during the quarter.
Copper sales during the first nine months of the year rose by 1.7pc to 842,110mt from 828,116mt during the same period last year. However, sales in Q3 2020 fell by 4.8pc to 285,642mt from 300,192mt in Q3 2019.
Revenue from copper sales in Q3 2020 increased during the same periods under comparison due to higher prices for the metal, Grupo Mexico noted in its report. During the quarter, the average price for the red metal was estimated at $2.94/lb compared with $2.62/lb in Q3 2019.
Zinc production and sales
In January-September 2020 zinc output fell by 2.6pc to 52,167mt from 53,558mt during the same period last year. The company’s zinc production was almost flat in Q3 2020 at 17,198mt, down by 0.4pc from 17,259mt in Q3 2019.
The metal’s sales in the first nine months of the year increased by 1.2pc to 77,761mt from 76,856mt in January-September 2019. In Q3 2020 zinc sales rose by 7pc to 25,162mt from 23,512mt in the same quarter last year.
Consolidated revenue and financials
Grupo Mexico, which also operates infrastructure and logistics businesses, reported a decline in its nine-month consolidated revenue, which declined to $7.69bn from $8.04bn in the same period last year. However, in Q3 2020, consolidated revenue increased by 1.4pc to $2.83bn from $2.79bn during the same quarter last year.
The company’s net profits fell to $1.24bn in January-September 2020 from $1.52bn last year but increased to $823mn in Q3 2020 from $337mn during the same quarter last year.