Higher prices strengthen SPC

Denver — Higher copper prices and cost-cutting measures contributed to improved earnings for Southern Peru Copper (PCU-N) in the fourth quarter.

The company posted net earnings of US$30.6 million (or 38 per share), compared with US$9.7 million (12 per share) in the corresponding period of 1999.

For 2000, earnings totalled US$92.9 million ($1.16 per share), compared with US$29.4 million (37 per share) in the previous year.

Sales in the fourth quarter jumped nearly 20% to US$205.9 million, though production was off 3.5% to 196.1 million lbs. copper. For the year, sales were up 21% to US$711.1 million, while production increased nominally to 751 million lbs. Production would have been higher, though a fire in the Cuajone concentrator during the first quarter resulted in a loss of 11.9 million lbs. copper.

The company saw the average copper price on the London Metal Exchange reach US84 per lb. during the fourth quarter, compared with US79 per lb. in the fourth quarter of 1999. For the year, copper averaged US82 per lb., up from US71 per lb. in 1999.

Southern Peru reduced administrative and production costs as a result of the recent takeover by Grupo Mexico, which holds a 54.2% stake. It lowered operating costs to US54 per lb. in 2000, down 2.1 from a year ago.

Meanwhile, the company has nearly completed a US$75-million expansion program at the Cuajone mine. It is evaluating two proposals for improving the Ilo smelter.

In December, several residents of the town of Ilo filed suit in the U.S. alleging that the smelter polluted the air and water.