US has second-longest mine development timeline in the world, S&P Global says
Mines in the US go from discovery to production in an average of 29 years.
Mining and transport firm Grupo Mexico on Wednesday reported a 40.5% drop in its second-quarter net profit from the same period a year earlier, as sales fell while costs rose, according to a company filing.
Second-quarter net profit stood at $611 million, down from the $1.03 billion from the year-ago period.
One of the world’s largest copper producers and a major Mexican rail operator, Grupo Mexico also posted a 12% drop in copper production in the second quarter from last year.
A community protest in Peru halted production at the company’s Cuajone mine for over a month back in March.
Grupo Mexico also said in the filing that the Los Chancas mining project in Peru, which is still under construction, was affected by protests between February and May too, which could impact its future production projections.
Brokerage JP Morgan said the Mexican company’s results for the period were “weak…as illegal strikes in Cuajone continued to impact volumes and consequentially costs”.
In morning trading, shares in Grupo Mexico were down 1.6% to 74.64 Mexican pesos.
Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter slid to $1.4 billion, a 41.2% drop year-on-year, and missing the Refinitiv estimate of $2.04 billion.
Grupo Mexico’s transportation division may have also experienced a setback earlier this month, with local media reporting that the company’s high-profile construction contract with the national tourism fund has been terminated.
(By Valentine Hilaire, Noe Torres and Aida Pelaez-Fernandez; Editing by David Evans and David Gregorio)
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