Southern Copper Corp. reported profits fell 53 percent in the fourth quarter as a labor strike stalled production at Mexico's biggest mine, diluting the year's record sales.
Net income dropped to US$311.2 million (euro211.7 million) from US$655.2 million (euro445.7 million) in the same period of 2006, as strikers slashed output at the company's Cananea mine, Southern Copper said in a news release Friday.
Sales dipped to US$1.29 billion (euro877.4 million), a 21.5 percent decline from the fourth quarter of 2006, driving earnings per share down 52.5 percent to US$1.06 (euro0.72) in that time.
High metal prices nonetheless helped the company post a record US$6.09 billion (euro4.14 billion) in sales in 2007, up 11.5 percent over US$5.46 billion (euro3.7 million) in 2006. Net income jumped 8.8 percent to US$2.22 billion (euro1.5 billion) for the year.
Southern Copper, one of the world's largest copper producers, operates mines, smelting and refining facilities in Peru and Mexico. It is 75.1 percent owned by Grupo Mexico SA.
The strike at Cananea and two other Grupo Mexico mines began July 30, as workers sought improved health and safety conditions and a 10 percent raise.
A Labor Arbitration Board ruled the stoppage illegal on Jan. 11, but a judge reversed that finding this week and prevented the company from firing striking workers.
Mexico's Mining Chamber asked the government Jan. 22 to clear the way for forced arbitration to end the stoppage, which has cost Grupo Mexico an estimated US$3 million (euro2.04 million) a day. Grupo Mexico calls the strike illegal and insists it has met union safety and health demands.
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