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Grupo Mexico considers new zinc refinery in Northern Mexico
February 25, 2013 / 6:25 PM / 5 years ago

Grupo Mexico considers new zinc refinery in Northern Mexico

* Expects zinc demand to be steady in ‘13

* Smelters seen obtaining higher treatment charges this year

By Silvia Antonioli

CANCUN, Mexico, Feb 25 (Reuters) - Mexican mining and infrastructure giant Grupo Mexico is considering investing in a second zinc smelter to be built in Northern Mexico, a company executive said.

“We are doing a strategic analysis based on zinc refining, because we believe that the zinc concentrate market, in the long term, is going to be very tough. We are considering building a zinc refinery in Empalme, Sonora, Mexico,” said Xavier Garcia de Quevedo, the company’s executive president, interviewed on the sidelines of the annual IZA zinc conference.

“We want to be able to process all of our concentrate...You can’t produce just a commodity. If you differentiate, you have more chances of success,” he said late on Sunday.

Grupo Mexico runs mines in Mexico, Peru and the United States, including the Buenavista mine in northern Mexico, one of world’s largest copper mines.

The company, which plans to increase investment 65 percent this year, to $3.5 billion in 2013, $2 billion of which in its mining division, already owns a zinc refinery, in central Mexico, with capacity of about 110,000 tonnes.

If the company decides to go ahead, the new refinery will be built within the next five years and will double the company refined zinc capacity.

Talking about zinc treatment charges, fees paid by miners to smelters to process concentrate into metal, de Quevedo said he expected better terms for smelters this year due to the heavy oversupply in zinc concentrates.

For example, in the last spot deal the company had to pay 10 percent more that the 2011 benchmark of $191 per tonne.

The miner, which supplies zinc concentrates mainly to Mexico, the United States, Brazil and Europe, sees stable demand in 2013, compared with 2012.

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