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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (32194)	2/4/2009 2:44:47 PM
From: LoneClone	Read Replies (1) \| Respond to of 195618

Grupo México says 2009 will be a difficult year for metals Grupo Mexico subsidiary Southern Copper Corp has posted a 4Q08 net loss of $124.7 million, no thanks to a strike and legal wrangling at its Cananea pit. Author: Dorothy Kosich Posted: Monday , 02 Feb 2009 RENO, NV - mineweb.com Grupo México reported a net income of $1.07 billion for 2008, a 34% drop from the $1.6 billion reported for 2007. During the fourth-quarter 2008, Grupo lost $175.2 million in net income, down 203% from the fourth-quarter 2007, which recorded a net profit of $169.5 million. The decrease in revenues was blamed on the drop in metals prices in the fourth quarter and negative adjustments made to provincial sales pricing. In recently released results, Grupo said, "We expect 2009 to be a difficult year for metals due to the fall in industrial production internationally and the difficulties in high consumption industries." "However, we remain optimistic that demand will recover before year-end, supported by aggressive economic stimuli and infrastructure programs in the U.S. and China, as is the case in the majority of countries." The company also announced it would cut its previously announced $1.3 billion capex by 61% to $515 million this year. Grupo subsidiary Southern Copper Company announced that, "given the sharp drop in metals prices and economic deceleration, SCC is canceling the majority of its investment projects to reevaluate their viability and also to obtain prices from our supplies and engineering firms that reflect the current economic reality." Meanwhile, subsidiary Minéra Mexico-Cananea announced that "given the drastic fall in copper prices and high extraction costs under which we have been operating the mine at Cananea, the company considers it's appropriate to save its reserves for better times when the company has legal and labor certainty that will ensure an efficient operation." After two proposed Asarco reorganization plans presented by Grupo México were rejected by Asarco's independent board, Grupo said it "is studying and evaluating taking proper legal action to recover assets lost from Asarco due to the negligence of its independent board." The good news is that the company "experienced a significant cost increase in energy, steel, and parts during most of 2008.However, these prices started to drop late 3Q08. During 4Q08, the prices of gasoline, electricity, and parts decreased 14%, 23%, and 21% respectively, as compared to 3Q08. We believe these downward trends will continue, which will result in lower production costs for the company over the next quarters, partially compensating for reduced metals prices." During 2008 Grupo México reported copper production of 488,929 metric tons, a 17% drop over 2007. Molybdenum production increased 1.1% to 16,390 metric tons in 2008, while zinc production declined 11.6% to 106,920 metric tons. Silver production declined 19.1% to 383,058 kg (12.35 million ounces), while gold production dropped 33.9% to 465 kg (14,950 ounces). Sulfuric acid production increase 5.5% to nearly 1.7 million metric tons, as lead production increased 5.5% to 20,445 metric tons.