* Says Cananea ramp-up is at 75 pct, will be 100 pct in Apr
* Sees production at capacity 190,000 tonnes/yr in 2012
* New expansion at Cananea to nearly double output
* Copper prices could start to slip next year
(Adds details on expansion, copper prices, China)
By Pav Jordan
TORONTO, March 8 Grupo Mexico (GMEXICOB.MX)
expects its Cananea copper mine, Mexico's largest, to reach 100
percent production capacity in April as it returns to full
operations after a three-year strike that ended in 2010.
Grupo Mexico Chief Operating Officer Xavier Garcia de
Quevedo told Reuters on the sidelines of the Prospectors and
Developers (PDAC) mining conference in Toronto that Cananea
cathode production was at 100 percent, while concentrate output
was between 55 percent and 60 percent.
"We hope to be at 100 percent installed capacity in the
month of April," Garcia de Quevedo said at a PDAC presentation
hosted by the Mexican economy ministry.
Cananea is a massive open pit copper mine in northern
Mexico that has enough copper to stay in production for at
least seven decades.
A workers' strike that began in July 2007 closed the mine
and cost the company some 530,000 tonnes of production, or some
$3.5 billion, before it was ended last year with the help of
"The reconstruction work at Cananea is 80 percent
complete," Garcia de Quevedo said before an address to
investors at the headquarters of the Toronto Stock Exchange.
"What we still have to do, for example, is complete the
reconstruction of the electrical systems, above all the
For more stories on PDAC convention: [ID:nN02153893]
Grupo Mexico has embarked on a multibillion expansion project at the mine
near the U.S.-Mexico border, and expects to more than double output there by
adding production in concentrates and cathodes.
Garcia de Quevedo said the expansion should be fully
implemented by the first quarter of 2015, with new SX/EW
(solvent extraction/electrowinning) copper cathode production
coming on ahead of new concentrate capacity.
Expansion is underway at a time when copper is near record
highs on the back of booming demand in China, India and other
emerging economies, which need the metal to feed infrastructure
Garcia de Quevedo expects prices to remain solid this year,
even though China copper demand has slipped.
Copper suffered its biggest one-day decline in nearly four
months on Monday, as rising oil prices and geopolitical
instability fanned recovery doubts and Chinese measures to
tackle inflationary pressures dimmed prospects for demand.
"There is a bit of a slowdown in Chinese demand," said
Garcia de Quevedo, whose company sells about 2 percent of its
supply to Chinese customers.
"The way we see it is that in 2012, prices could start to
(Reporting by Pav Jordan; editing by Janet Guttsman)