Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Grupo Mexico registered a net profit of $1.1 billion in this year’s first quarter, the Mexican mining and transport company said on Tuesday, helped by a 50% surge in copper prices during the first three months of the year.
The company’s billion dollar profit in the January-to-March period marked a sharp rebound from a nearly $370 million loss during the same period last year.
Grupo Mexico, the country’s third largest company by market capitalization, is the world’s fifth-biggest copper producer as well as a major rail freight operator in Mexico.
The company, controlled by Mexican billionaire German Larrea, runs mines in Mexico, the United States and Peru
The firm’s total revenue during the first three months of this year reached $3.4 billion, up about 40% compared with the first quarter in 2020, the company said in a filing to the Mexican stock exchange.
Sales from Grupo Mexico’s mining division during the quarter reached $2.8 billion, up 56% from a year earlier, while sales from the company’s transport unit hit $593 million, down about 2%, the filing showed.
Sales for the infrastructure division grew by 8% during the quarter to reach some $147.5 million.
Meanwhile, the company’s tax bill during the three-month period reached $476 million.
Copper prices rose by 50.2% during the quarter, while prices for silver, molybdenum and zinc also rose by double-digits, or by 56%, 17% and 29%, respectively.
Production of the red metal was essentially flat for the quarter at slightly more than 271,000 tonnes. Both silver and gold output were up by about 6%, while zinc production slid by nearly 15% to settle around 16,500 tonnes.
The company, controlled by Mexican billionaire German Larrea, runs mines in Mexico, the United States and Peru, and its overall mining business accounted for around 90% of its first quarter profit.
(By Noe Torres and Abraham Gonzalez; Editing by David Alire Garcia, Marguerita Choy and David Gregorio)
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