September 07, 2008

Grupo Mexico zinc production down by 20% YoY in Q3

Metals Insider reported that Grupo Mexico production of mined zinc during the July to September 2007 quarter was 29,306 tonnes down by 20.3% YoY from production of 36,786 tonnes in July to September 2006 quarter.

Cumulative production over the January to September 2007 period fell by 7.9% YoY to 95,049 tonnes from 103,162 tonnes in January to September 2006 period.

Grupo Mexico didn’t specify in its results the causes of the production decline but our best guess is that the Q3 drop reflects the impact since the end of July of strike action at the San Martin and Taxco mines. These two operations produced just under 30,000t of contained zinc last year.

Grupo Mexico has been fighting a protracted battle in the Mexican courts to have the strikes and that at the Cananea copper mine declared illegal so far without success. It has also announced it intends to close permanently Taxco on a combination of the strike action and falling reserves.