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Mining and transport conglomerate Grupo Mexico on Monday reported a 34% increase in second-quarter net profit, topping analysts’ forecasts at $1.122 billion, fueled by higher copper prices and mining output.
Revenue for the major global copper producer rose 27% to total $4.397 billion in the quarter.
Analysts polled by LSEG had forecast a net profit of $952.6 million, on revenues of $4.09 billion.
Grupo Mexico, controlled by billionaire German Larrea, is one of the world’s largest copper producers with mines in Peru, the United States, Spain and its home base of Mexico, where it also operates major freight railroads.
Copper production during the quarter totaled 270,747 metric tons, up 4.7% from a year earlier, thanks to more output from operations in Peru and Mexico and bringing sales up 33% to $3.4 billion.
Copper prices rose around 8% over the quarter, according to LSEG data.
The miner said it expected to produce some 1.08 million metric tons of the red metal this year. It had previously forecast some 1.06 million metric tons.
Grupo Mexico said it had on July 1 restarted work on its Tia Maria project in Peru’s Arequipa region, which was held up for over a decade due to community opposition on fears of the mine’s environmental impact.
Protests against the mine left six people dead between 2011 and 2015.
Peruvian officials have predicted that construction could start in 2025 and production by 2027. The mine is expected to eventually produce 120,000 tons of copper annually.
“Tia Maria will generate significant revenues for the Arequipa region from Day One of operation,” Grupo Mexico said in a filing.
“Considering current copper prices, we expect to export $17.5 billion and contribute $3.4 billion in taxes and royalties during the first 20 years of operation,” it added.
Grupo Mexico said it was reviewing its planned $1.4 billion investment into the project and would provide an update by the end of 2024.
The firm’s transport unit saw a 9% increase in sales to $881 million.
(By Sarah Morland, Aida Pelaez-Fernandez, Natalia Siniawski and Marion Giraldo; Editing by Kylie Madry and Leslie Adler)
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