Even though production of metals silver, copper, molybdenum and zinc were all up for the first half for Southern Copper (SCCO), it wasn't able to translate into earnings, as the company reported a drop in earnings from $658 million million or 77 cents a share for the second quarter of 2011 to $564 million or 66 cents a share for the second quarter of 2012.
For the first half, net income jumped to $1.19 billion, or 1.39 a share, a 4.3 percent increase over the $1.32 a share during the first six months of 2011.
The company received approval from the Board of Directors for $1.5 billion in capital expenditures for 2012. That will be used primarily for projects in Peru and Mexico, and some for replacement capital and maintenance.
For the first half and second quarter, copper production rose significantly based on better recoveries and ore grades.
"This increase was the result of higher production at the Cuajone, La Caridad and Buenavista mines, which increased production by 31 percent, 18 percent and 4 percent, respectively due to higher ore grades and recoveries," said Southern Copper.
In the second quarter copper production rose to 160,595 tons, a 10 percent increase. For the first half copper production was up 16 percent, reaching 270,435 tons.
Silver in the first half rose 14 percent, climbing from from 6,110,000 ounces in the first half of 2011 to 6,934,000 ounces.
Silver mine production rose 10 percent in the second quarter from 3,197,000 ounces in the second-quarter 2011 to 3,514,000 ounces. The company said it was "principally as a result of higher production at our Cuajone (+31 percent), Buenavista (+28 percent) and La Caridad (+12 percent) mines," said the company.
Zinc production was up 8 percent in the first half, rising from 41,361 tons in the first six months of last year to 44,910 tons. In the second quarter it rose from 21,366 tons in the second quarter of 2011 to 22,227 tons, a four percent gain.
Molybdenum production was up 6 percent in the first half, jumping from 8,775 tons during the first half of last year to 9,310 tons. In the second quarter Molybdenum rose from 4,502 tons in the second quarter of 2011 to 4,687 tons.
Talking about the performance of Southern Copper Corporation in the first half, German Larrea said, "Looking beyond the current volatile markets, the medium to long-term outlook remains positive for metals, as strong demand growth from China and the emerging economies is poised to continue."
On July 26, the board of Southern Copper authorized a cash dividend of 24 cents a share, payable on August 28, 2012.
Southern Copper closed Monday at $32.09, gaining $0.42, or 1.33 percent.