Grupo Mexico to press ahead with major US copper projects after output dip

By Raul Cortes

MEXICO CITY, Oct 22 (Reuters) - Grupo Mexico GMEXICOB.MX said on Thursday it will push ahead with major investments at its US mining unit Asarco, expanding the Ray and Silver Bell mines in Arizona and aiming to restart the Hayden smelter and refinery, after copper output fell in the third quarter.

The mining and transportation conglomerate expects to spend $4 billion to $6 billion over the next three years on Asarco's main projects, mining head Leonardo Contreras told analysts on a call.

The investment would mark a significant step up from the unit's recent spending levels, which came in at just $101 million in 2024, though in line with what the firm had previously floated for potential US expansion plans.

US EXPANSION PUSH

Grupo Mexico has long weighed kickstarting output from its US assets, particularly as Washington has prioritized domestic copper production and securing critical mineral supply chains.

The plans come after Grupo Mexico reported that third-quarter copper output fell about 2%, hurt by lower production in the US and Peru.

In September, Itau analysts said management intended to move ahead with Asarco investments despite uncertainty over possible US tariffs, while also evaluating opportunities to integrate Mexican concentrates and US copper scrap.

Grupo Mexico shares closed down more than 4% on Thursday, making them among the weakest performers on the Mexican market, with copper prices also falling on the day.

Contreras said Grupo Mexico is continuing work on the Ray expansion while carrying out feasibility studies. He added that the company is becoming "increasingly optimistic" about restarting Hayden with capacity to process 1.4 million metric tons of copper concentrate a year, restoring additional copper-processing capacity in the United States.

"That would represent almost 350,000 metric tons of contained copper," Contreras said. "If that feeds into our refinery, we could be looking at 500,000 metric tons of copper."

He said the Silver Bell project is also in the feasibility stage, with more clarity expected in coming quarters.

PERU LONG-TERM FOCUS

Even so, Grupo Mexico's long-term growth plans remain centered on Peru through subsidiary Southern Copper SCCO.N, despite a delay to its flagship Tia Maria project. The company said this week that startup had been pushed back from the fourth quarter of 2027 to the first half of 2028.

Southern Copper is also developing the Los Chancas and Michiquillay projects in Peru, expected to produce 130,000 and 225,000 tons of copper a year, respectively. Both are currently scheduled to begin operating around 2032.