Southern Copper profit drops in first half on copper price slump
LIMA, July 28 (Reuters) - Southern Copper Corp said on Tuesday its net income dropped 12.6 percent drop in the first half of the year due to the slump in global metal prices, but it said it was well-positioned to weather the "temporary downturn".
The global mining company controlled by Grupo Mexico said first-half net income was $577.1 million compared with $660.6 million in the first half of last year.
"Even though the current economic scenario is affecting metal prices, we believe this is a temporary headwind that will eventually fade, making the strong copper market fundamentals prevail," said German Larrea, chairman of the Southern Copper board and Grupo Mexico chief executive officer.
Sales fell 6.5 percent to $2.658 billion compared with the same period in 2014 as a higher sales volume was unable to offset lower prices.
Output rose 8.6 percent to 356,701 tonnes, the company said.
Peru is the world's third largest producer of the red metal and its production of copper, gold, and silver will likely rise by 13 percent this year, the country's mines minister told Reuters last month. Zinc is set to rise 18 percent.
Southern Copper said its earnings before interest, taxes, depreciation and amortization declined 13.3 percent to $1.193 billion in the first half of 2015.
"We believe that Southern Coppers excellent reserve base, low cash cost, conservative capital structure and growth program, makes us the industrys best prepared company to weather this temporary downturn in metal prices," said Larrea.
The company operates mines in Mexico and Peru, where it is on track to expand its Toquepala mine but has faced delays in rolling out its Tia Maria project amid protests.
Southern Copper said last month it hoped to reach an agreement with protestors in time to begin construction of the planned $1.4 billion mine before the end of 2015.
Mining conflicts in recent years have held up billions of dollars worth of investment in which is expected to contribute a significant amount to future global supplies. (Reporting by Lima newsroom; Writing by Sarah Marsh in Buenos Aires)
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