July 28 (Reuters) – Southern Copper (SPC.LM)(SCCO.N) posted a second-quarter consolidated net profit of $313 million late Wednesday, a rise of 79 percent from the same period a year ago as metals prices improved.
The company, which operates mines in Mexico and Peru, said second-quarter sales were $1.17 billion, up 42 percent from the year-ago quarter.
The company’s owner, Grupo Mexico (GMEXICOB.MX), said last week it planned to merge its Arizona-based miner Asarco with Southern Copper to cut costs. It pulled the U.S. miner out of bankruptcy last year. [ID:nN23101823]
Combining Asarco with Southern Copper would increase savings between the two units and give Southern Copper shareholders exposure to Asarco’s growth potential, Grupo Mexico said in a regulatory filing last week. Grupo Mexico owns all of Asarco and 80 percent of Southern Copper.
The plan assigned a $6 billion value to Asarco, which went into bankruptcy under the heavy burden of environmental complaints around its mining operations in the United States.
Grupo Mexico recently won back control of the largest copper mine in Mexico, Cananea, which was paralyzed by a nearly three-year-long strike. The company retook Cananea with the help of federal police earlier this year after a long fight with the union in Mexican courts and is aiming to achieve some copper production by the end of this year.
As reported previously, with a $3.8 billion investment over the next five years, Grupo Mexico hopes to increase Cananea’s annual production by 150 percent to 450,000 tonnes.
The uptick in production will come from expansion at the mine to raise copper capacity by 270,000 tonnes. Cananea also will boost its molybdenum output, the company said. (Reporting by Patricia Velez and Terry Wade; Editing by Valerie Lee)