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 dont need
to look at mergers and acquisitions; not only is there no need,
but also the market conditions are not there. We havent
even looked at which assets might be available as weve
been very active in developing our own reserves."
He estimated that less than 30
percent of Mexicos ore reserves have been developed.
"Mining is the starting point of
the production chainwe need to create jobs, especially in
isolated regions. If miners invest in people, in communities,
in the right way, there shouldnt 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 companys 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
Asarcos 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
weve seen is that costs and capital expenditure
requirements have risen tremendously. There arent 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 communitiesthese
issues are preventing projects from getting up and
The mining industry needs to be
focused on how to reduce costs, he said. "Look at Chile, for
exampleenergy 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 were 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
companys biggest market, followed by Mexico, Europe,
South Americamainly Brazil and Peruand Asia, a
market Grupo Mexico "needs to grow and develop" further, Garcia
de Quevedo said. "China, India, South Koreathese
countries account for enormous copper demand and were
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; well 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 plants
existing SX-EW production capacity is 88,000 tonnes per
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).