Southern Peru sees profits plunge

Vancouver — The year 2001 was not a good one for most copper producers and Southern Peru Copper (PCU-N) was no exception.

Peru’s leading copper producer tabled net profits of US$46.6 million for the year, about half the US$92.9 million recorded in 2000.

“The decrease in the company’s results for both the fourth quarter and the year is due to the decrease of metals prices in the world market,” said the company’s Chairman, German Larrea Mota-Velasco.

In the fourth quarter of 2001, Southern Peru saw profits drop 61.4% to US$11.8 million from US$30.6 million recorded in the same period of 2000. Driving the decline is a slump in copper prices, which have dropped 22.6% to US65 per lb in the fourth quarter compared to US84 in the year ago period.

Sales in the fourth quarter came in at US$160.8 million, down from US$205.9 million in the 2000 period. For the year, sales fell 7.5% to US$657.5 million from US$711.1 million in 2000. Production in 2001 increased 0.5% to 755 million lbs.of copper. The slight jump is due to higher ore grades and recoveries at its Toquepala concentrator.

Grupo Mexico, the worlds number 3 producer, holds a 54.2% stake in Southern Peru, while Phelps Dodge (PD-N), the worlds second largest producer, holds 14% of the company.