Grupo Mexico Q1 profit up by 47pct as copper prices climb
Mine Web reported that Grupo Mexico Q1 profit rose 47% on increased copper prices and production. Net income grew to USD 531.7 million from USD 361.9 million in the year earlier period.
The Mexico City based mining and Railroad Company said that sales climbed 26% to USD 2.5 billion. No per share figure was given. Asarco generated USD 254 million in the quarter.
Copper futures averaged USD 4.377 a pound in the quarter, 33% higher than in the year earlier period. Prices for copper were USD 4.3778 per pound up from USD 3.2806 per pound in the Q1 of 2010. Output rose 5.2% after the company resumed production at its Cananea, Sonora, copper mine, now named Buenavista after 3 year standoff with the miners union.
Asarco's mined copper production in the quarter decreased 13.5% compared to the Q1 of 2010 mainly due to lower ore grades at the Mission and Ray mines in Southern Arizona. Copper production for 2011 is estimated at 830,000 tonnes of which 630,000 tonnes will be produced by Grupo Mexico's Southern Copper Corporation mines in Peru and Mexico and 200,000 tonnes by Asarco mines.
The company said that copper prices continue to strengthen given the expectations for high consumption and the rebound of the construction sector. Prices have also been supported by a weak dollar. The earthquake in Japan has resulted in slightly lower consumption worldwide which will be compensated by very high consumption once re initiation of production in plants and reconstruction of housing in Japan starts.
The company also expects increased copper demand from China despite the Chinese government's efforts to moderate growth. And it said molybdenum prices could continue to rise given the significant demand for steel expected from Japan.
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