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 province, where it mines for zinc and copper.
The pandemic has weighed heavily on 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.