Summary
Southern Copper Corporation (SCCO) reported on September 23, 2004, through statements made by its President, Oscar Gonzalez Rocha, regarding increased operational costs impacting Peruvian copper mining companies, including SCCO. The company has experienced a cost increase of at least 10% year-to-date, attributed to the depreciation of the US dollar against the Peruvian currency, rising maritime freight expenses, and higher fuel prices. Despite these challenges, SCCO has secured a long-term agreement for electricity supply with Enersur, which will shield the company from a potential 5.3% increase in electric power costs in Peru. This agreement, valid for the next 14 years and costing the company US$12 million per month, provides significant cost stability for a crucial operational input.
Key Highlights
- 1SCCO President reported a minimum 10% increase in operational costs for Peruvian copper mining companies, including SCCO, year-to-date.
- 2Factors contributing to cost increases include the fall of the US dollar against the Peruvian currency.
- 3Rising maritime freight costs are also cited as a reason for increased expenses.
- 4Higher fuel costs have further impacted the company's cost structure.
- 5SCCO has a 14-year agreement with Enersur for electric power, mitigating the impact of a potential 5.3% electricity price hike in Peru.
- 6The company's current monthly expenditure on electricity is US$12 million.