Could you introduce us to Asarco, its mines, and other assets?

Asarco has been a part of Grupo Mexico since 1999 and operates primarily in Arizona, where it possesses the Ray, The Mission Complex, and Silver Bell mines. The Ray operations, our largest operation, consist of an open-pit mine with a concentrator and a solvent extraction-electrowinning operation that generates copper concentrates, along with The Mission Complex, which also has its concentration plant. On the other hand, Silver Bell has proven to be profitable as it produces copper cathodes by a solvent extraction/ electrowinning (SX/EW) operation, which has been beneficial for Asarco as it allows the selling of two different products. Moreover, Asarco owns the Copper Basin Railway, a local railroad transporting ore to the Ray concentrator to the smelter and sulfuric acid to the leaching facilities.

It is noteworthy to highlight that each country presents its particularities, even if they share the same type of equipment, refinery, or smelter. In the case of Asarco, the profits are solid. While we may not achieve the same recovery rates as those achieved in Buenavista del Cobre and La Caridad mines in Mexico or Toquepala and Cuajone mines in Peru, Asarco's results in Arizona are favorable considering the specific conditions of our operations.

How has Asarco performed during 2022, and how are you trying to solve labor shortage?

Asarco has achieved satisfactory production levels and has diligently adhered to the established program at each of its mines. However, when compared to other Grupo Mexico operations in Peru and Mexico, Asarco in US has been affected by cost implications stemming from labor availability concerns.

Currently, we confront a scarcity of personnel, resulting in operations functioning below our desired capacity. Nevertheless, we are adeptly adjusting to the projected pace and have successfully met our financial targets for 2022 and the initial half of 2023. It is important to note that this labor shortage challenge extends beyond Asarco, permeating throughout North America. While we have undertaken personnel transfers from Mexico to the United States, navigating the requisite authorizations for talent importation across jurisdictions proves difficult.

What is the current state of the Hayden Smelter and the Amarillo Copper Refinery?

Both the Hayden smelter and the Amarillo refinery had been operating at a low rate; thus, the Amarillo refinery is currently suspended. On the other hand, the Hayden smelter recently started processing slag in 2023 to recover the remaining copper from Asarco's operations, as well as processing slag from the La Caridad metallurgical plant. As a result, we are primarily selling the concentrates we send to the northern border of Mexico, specifically the port of Guaymas, where they are shipped to Asia and, to a lesser extent, Europe.

In addition to Asarco's slag, we intend to process the slag generated at the La Caridad metallurgical plant in Mexico. Although this slag contains copper with a lower grade than the one from Asarco's, we want to evaluate its economic viability so that once the Hayden smelter no longer produces sufficient slag in Arizona, we can transport it from La Caridad there.

Are you expecting to expand Asarco’s operations soon?

Currently, we do not have plans to expand Asarco's mining operations. Our primary focus is on maintaining the current production pace.

What are Asarco’s goals for the next years?

In Arizona, we have a long-term work horizon, and our goal is to sustain Asarco's operations for another 10 to 15 years, leveraging existing reserves and seeking to improve the results achieved so far. While Silver Bell has shown more favorable results than Mission and Ray, all three operations have demonstrated positive performance, albeit with slightly higher costs than nearby mines.

We aim to restore operations at the Hayden smelter and the Amarillo refinery to produce copper cathodes and rod, which are primarily sold in the eastern region of the US. The Amarillo Copper Refinery is located nine miles northeast of Amarillo, a strategic location that allows us to be closer to the states bordering the Atlantic Ocean. Additionally, we are working to address the challenges related to labor shortages, as this has limited us to production levels below the desired targets.