A sharp decrease of 46% in copper prices and 54% in molybdenum prices during the fourth-quarter 2008 dropped Southern Copper Corporation earnings 140% from $310.8 million or 35-cents per share in 4Q07 to a loss of $124.7 million (negative 14-cents/sh) in 4Q08.
The company reported a net income of $1.4 billion or diluted earnings per share of $1.60 for 2008, down 36.5% from the $2.21 billion or diluted per share earnings of $2.51 reported for 2007.
In a news release, SCC said the decrease in net sales in 2008 was partially offset with gains of $74.2 million and $137 million on copper hedge transactions in 4Q08 and Y08, respectively.
Copper production in 2008 was reported at 488,929 tons, down from 592,182 tons reported for 2007. Moly production was 16, 309 tons in 2008, compared with 16,207 tons a year ago.
Zinc production decreased 11.6% in 2008 to 25,964 tons. Sulfuric acid production increased 5.5% during the same period to nearly 1.61 million tons.
Mined silver production decreased 19.1% to 12.31 million ounces in 2008.
In 2008 Southern Copper Corp exceeded its production objectives at the open pit mines of Toquepala, Cuajone and La Caridad, as well as the underground mines of Charcas, Santa Eulalia, Santa Barbara, the coking facility at Nueva Rosita and the La Caridad precious metals plant.
In recently released financial results, SCC said, All capital expenditures have stopped or are under scrutiny. The company believes this shows the discipline required to respond to weakened commodity prices and economic uncertainties.
Although SCC spent $118 million on its Tia Maria project, the company is currently evaluating putting on hold or stopping the project in light of current market conditions and in order to obtain from our suppliers and engineering firms prices that reflect the economic reality.
The company has also put the Toquepala expansion on hold although SCC has spent $37.7 million on the project.
Meanwhile, the Agua Prieta lime plant modernization project in Sonora is moving toward completion.