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Message Boards Settings Southern Peru Copper Corp (PCU) - Quote Info
CC notes--2 of 2     23-Oct-09 12:26 pm    
Q about BHP settlement of labor contract in Chile ( it was a whopper, likely to stoke unreasonable demands which is already happening at another BHP mine in Chile. A = will not talk about a non-pcu mine. With the exception of the Cananea union and one "political" dispute in Peru, labor relations are excellent.. Answer noted pcu workers did not join this week's national strike in Peru.

My overall take: They are producing all they can, and doing well at it. Not much room for production increases (except rod vs cathode) until Cananea back. Assuming no serious interruption in current production, 4Q will be driven by the price of metals and costs of production (fuel, power, labor).

My longer view: Cananea back at full production a year from now, with lesser monthly amounts earlier. Add 180,000 tons.

Tia Maria beginning to produce 120,000 tpy beginning in 2011 (so figure 2012 for full effect). Toquepala expansion = 100,000 tons starting in 2012 (so figure 2013 for full effect. Folks, that's almost double 2009 production in a little better than 4 years. Add El Arco at 190,000 tons (financed by a JV with the Chinese) in another few years.

Lots of very bad things can happen in 10 years, like a "better mousetrap" for copper, nationalization of their mines, a giant earthquake which wipes out the Peru mines for years in one shot and things I can't even think of. But if none of these "killer" bad things happen, PCU will be printing money like you cannot imagine 5 years from now and even more with El Arco.

Commodities should be a permanent part of every diversified portfolio. Until something big and bad happens or can be forseen. PCU will be a permanent part of my portfolio. Jacob may even get used to me asking him questions.
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dar200

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CC notes--2 of 2
dar200 23-Oct-09 12:26 pm  
 
thank you for taking the time to post this.
b_1039 Rate it 23-Oct-09 04:54 pm  
 
DAR THANKS !!!! As always exceptional analys...
Giorgio2210... Rate it 3-Nov-09 03:21 pm  
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Southern Copper Corp. (PCU)

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