UPDATE 1-Grupo Mexico dodges mine closure with $151 mln toxic spill fund

jueves 11 de septiembre de 2014 15:00 GYT
 

(Rewrites throughout to add details on clean-up fund, Economy Minister quote)

By Adriana Barrera

MEXICO CITY, Sept 11 (Reuters) - Grupo Mexico and its subsidiaries on Thursday dodged losing a concession to run one of the biggest copper mines in the world as long as they comply with government obligations following a toxic spill that include creating a $151 million clean-up fund.

The fund is far bigger than a $23 million reserve that Grupo Mexico had previously set aside for the clean-up at Buenavista copper mine. The government said Grupo Mexico could face fines totaling 44.5 million pesos ($3.37 million).

"If they meet obligations set by the authorities, production will continue," Economy Minister Ildefonso Guajardo told a news conference.

Shares in Grupo Mexico slightly pared losses following the announcement, to trade down 0.47 percent at 46.37 pesos a share.

A toxic leak released 40,000 cubic meters of mining acid into the Bacanuchi River in the northern state of Sonora last month, leading critics to call for massive fines against the company and even an end to its Buenavista concession.

Grupo Mexico said last week that the mine was operating normally after the spill and reaffirmed its overall copper output for this year at 850,000 tonnes.

The company is in the midst of a $3.4 billion expansion project at the mine, which has the largest proven copper reserves in the world. The expansion aims to boost production capacity to 1.3 million tonnes by 2017. (1 US dollar = 13.2050 Mexican peso) (Reporting by Adriana Barrera; Editing by Grant McCool)