AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


Grupo Mexico focuses on organic growth

Keywords: Tags  Grupo Mexico, zinc, copper, molybdenum, Xavier Garcia de Quevedo Topete, Mission Mine, Ray Mine, Buenavista andrea hotter


CANCUN, Mexico — Copper, zinc and molybdenum producer Grupo Mexico SAB de CV is focusing on expansions and greenfield projects to secure growth rather than mergers and acquisitions.

"We have large reserves. To continue in the long term, to be a profitable and sustainable business, we have to develop them," executive president Xavier Garcia de Quevedo Topete told AMM. "We don’t need to look at mergers and acquisitions; not only is there no need, but also the market conditions are not there. We haven’t even looked at which assets might be available as we’ve been very active in developing our own reserves."

He estimated that less than 30 percent of Mexico’s ore reserves have been developed.

"Mining is the starting point of the production chain—we need to create jobs, especially in isolated regions. If miners invest in people, in communities, in the right way, there shouldn’t be any problems," Garcia de Quevedo said.

Grupo Mexico produces 825,000 tonnes of copper per year and will add an estimated 480,000 tonnes annually as part of a $3.9-billion investment program approved by the company’s board in 2010. The extra output will come from its two mining subsidiaries: Southern Copper Corp. and Asarco LLC.

Most of its expansions will come from Southern Copper, but the group also is expanding Asarco’s Mission Mine and plans to expand the Ray Mine, both in Arizona.

The company said that spiralling costs have prevented some other companies from developing and expanding projects, particularly in South America. "What we’ve seen is that costs and capital expenditure requirements have risen tremendously. There aren’t many projects in South America, even though the continent has the reserves," Garcia de Quevedo said. "The cost of electricity, water, plus problems with land and communities—these issues are preventing projects from getting up and running."

The mining industry needs to be focused on how to reduce costs, he said. "Look at Chile, for example—energy costs are five times those
in the U.S."

Demand for the metals the company produces will continue, Garcia de Quevedo told AMM, but much hinges on the recovery of the world economy. "In America, they still have to solve the debt imbalance, but we’re seeing definite signs that industrial production is going up. In the end, the U.S. will solve its financial problems," he said.

The United States is the company’s biggest market, followed by Mexico, Europe, South America—mainly Brazil and Peru—and Asia, a market Grupo Mexico "needs to grow and develop" further, Garcia de Quevedo said. "China, India, South Korea—these countries account for enormous copper demand and we’re looking very seriously at entering more into the Asian market and trying to sell copper cathode there." He ruled out joint ventures in China, however.

Grupo Mexico plans to bring its new solvent extraction-electrowinning (SX-EW) copper plant at its Buenavista del Cobre operation online at the end of the year, Garcia de Quevedo said.

The company is in the process of moving equipment to Mexico from Peru for the expansion. "The project is on time; we’ll finish the first train (needed for the expansion) in December and then start with the new project," he said in an interview during the International Zinc Association conference in Cancun. "This will allow Grupo Mexico to add 120,000 tonnes of copper annually." The plant’s existing SX-EW production capacity is 88,000 tonnes per year.

The company also is building a new concentrator at the site that will have the capacity to process 100,000 tonnes of ore per day and produce 180,000 tonnes of copper in the second quarter of 2015. Buenavista, which has 23.7 million tonnes of copper reserves, produced 172,500 tonnes of copper in 2011.

Grupo Mexico also plans to build a new copper smelter in northern Mexico to smelt and process concentrates from Buenavista.

It also will focus on deriving value from its molybdenum by-product ( amm.com, Feb. 26).


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends

AMM Events