Canadian miner Hudbay Minerals (TSX, NYSE: HBM) swung to a loss in the first three months of the year mainly due to weak base metal prices and lower grades at its Constancia copper mine in Peru.
Despite solid production figures at its Canadian operations,
the Toronto-based miner lost $76.1 million, or $0.29 per share in the quarter.
While Constancia achieved its target mill throughput and
operating costs during the period, Hudbay had to temporarily suspend mining
near the end of March to comply with covid-19 restrictions in the
country.
Constancia’s performance and realized base metal prices also
impacted Hudbay’s cash generated from operating activities. The figure dropped
to $9.1 million in the first quarter of the year, from the almost $100 million generated
in the fourth quarter of 2019.
The company suspended its production guidance for its
Peruvian mine, but confirmed expected output at its operations in Canada’s
Manitoba, where it mines for zinc and copper.
Virus effect
The pandemic has weighed heavily in copper exports from Peru
and Chile, particularly in the first quarter. The neighbours and competitors,
however, have fared very differently, Colin Hamilton, BMO Capital Markets’
head of commodities wrote in a note this week.
Peru was the hardest hit, as it imposed a stricter
quarantine and greater restrictions on the supply chain than Chile.
The Andean country’s concentrate exports to China dropped
16% when compared to the same period the previous year due to restricted
operations at large mines, including MMG’s Las Bambas, Chinalco’s Toromocho and
Freeport McMoran’s Cerro Verde.
Peru’s copper production dropped 12% to 2 million tonnes in
the first quarter, with March seeing a 27% year-on-year drop, Hamilton said. By
comparison, Chile battled through rather unscathed, with copper concentrate
production rising 4.8% year-on-year to 5.5 million tonnes per annum (mtpa).
Refined copper output also climbed 12% year-on-year, with March exports 4%
above the trailing 12-month average.