Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
Hudbay Minerals (TSX, NYSE: HBM) reported a net loss of $14.9 million in the second quarter of the year as the Canadian company allocated resources to the acquisition of fellow miner Copper Mountain Mining Corporation.
The Toronto-based miner said that lower copper and zinc prices, higher operating costs and lower sales volumes contributed to the loss, which compares to earnings of $32.1 million in the same quarter last year.
Cash generated from operations decreased to $24.6 million in Q2, compared to $71.3 million in the first quarter on the back of higher operating costs in Peru associated with the scheduled mill maintenance program and higher planned stripping activities at Pampacancha.
Despite the disappointing results, Hudbay’s president and chief executive, Peter Kukielski, said the company is confident in its long-term strategy and growth prospects.
“We remain on track to meet our 2023 guidance as we completed many transitional activities in the second quarter that position us for stronger production and improved costs during the second half of 2023,” Kukielski said in a statement.
“The higher grades we are currently mining at Pampacancha, the planned improved throughput and recoveries in Snow Lake and the recent completion of the Copper Mountain acquisition are expected to generate strong free cash flows starting in the third quarter of 2023.”
Hudbay has said the acquisition of Copper Mountain will result in an estimated $30 million per year of operating efficiencies and corporate synergies. These include nearly $20 million annually from operating cost reductions through the application of the company’s operating efficiency practices to the copper mine.
The integration of Copper Mountain into its portfolio has transformed Hudbay into Canada’s third largest copper miner, after Teck and Vale, with an expected production of 150,000 tonnes per year.
Hudbay, which operates copper mines in Canada, Peru and the United States, is seen by analysts as a potential acquisition target. Most large to medium-size mining companies are rushing to secure supplies of the metal, key ingredient in the world’s transition to a greener economy and electrification.
With ageing mines and newer mines taking at least a decade to come into production, copper prices are expected to increase.
Glencore’s $22.5 billion rejected offer for Canada’s Teck Resources, which holds several copper assets, and rumours of First Quantum rebuffing a takeover bid from Barrick Gold have put Canadian miners in the spotlight.
