Southern Copper posted a 2.7% decline in second-quarter copper production due to declining ore grades at its Peruvian mines.
Copper output fell to 221,384 mt in the quarter from 227,495 mt a year ago, the Phoenix-based company said Thursday in a statement. Molybdenum production climbed 1.8% to 5,403 mt, while silver fell 2.6% to 3.99 million oz and zinc was down 11% to 17,815 mt.
Southern said it sold copper at $2.58/lb on the Comex, up 21% from a year earlier, while zinc jumped 35.6% to $1.18/lb, silver rose 2.1% to $17.19/oz and molybdenum rose 16% to $8/lb.
The company cut cash costs net of byproducts to 93 cents/lb in the quarter from 95 cents/lb the previous year, while capital expenditures totaled $252 million, with the bulk of spending on the $1.2 billion Toquepala expansion in Peru.
Southern, which last year completed a $3.5 billion expansion at its Buenavista mine in Mexico, said it is working on detailed engineering at a $413 million, 80,000 mt/year zinc concentrator plant at Buenavista which is slated to start operating in 2020. The $159 million, high-grade Pilares project near its La Caridad mine is also expected to add 34,500 mt/year of copper in 2019.
In Peru, Southern has invested 650.2 million to date on an expansion of its 100,000 mt/d Toquepala concentrator plant to 217,000 mt/d. The project is 70% complete and due for completion by Q2 2018. A $50 million HPGR system at the mine will be completed by Q1 2018, Southern said.
The company has invested $184.4 million to date in a $215.5 million conveyor belt and a 43.8 million mt/year crusher at its Cuajone mine, which is 99% complete and is to be completed by Q3 2017. A $30 million tailings thickener project is scheduled for completion in Q3.
Southern boosted its Q2 by 35% to $299.7 million as sales rose 14.6% to $1.53 billion. The company is counting on expansions at three of its mines to boost annual copper production to 1.2 million mt by 2021.
