According to press reports, the Canadian miner seeking permits to build the proposed Copper World/Rosemont mine complex in the northern half of the Santa Rita Mountains southeast of Tucson has put itself up for sale.
In a July 7 interview with Reuters, Toronto-based Hudbay Minerals Inc. Chief Executive Officer Peter Kukielski said the company is willing to receive offers. Kukielski also said the company was open to merging with other miners to create one mega copper company.
“I would certainly like to put them together,” he told Reuters.
In a potentially significant development in the timeline to develop the Copper World/Rosemont complex, the Reuters article also states that Hudbay’s “aim is to triple its copper production by the end of the decade, which it is planning to achieve through mergers or acquisitions and not by organic growth.” (Emphasis added.)
HUDBAY HAS BEEN SUCCESSFULLY OPERATING MINES IN CANADA FOR MANY YEARS . IT IS A CANADIAN FOUNDED INSTITUTION THAT HAS HAD A GOOD TRACK RECORD MINING WISE . ITS TRACK RECORD REGARDING HUMAN RIGHTS VIOLATIONS RELATED TO ITS MINING ACTIVITIES HAS CREATED CONCERN , PARTICULARLY AT ITS CONSTANCIA MINE IN PERU .
HUDBAY HAS MOVED FROM SMALLER , HIGH-GRADE DOMESTIC MINES TO LARGE , LOW-GRADE(IN COMPARISON) OFFSHORE MINES IN PERU AND THE USA . THIS HAS CREATED A SHIFT IN BUDGETING REQUIRING INCREASED BORROWING . INVESTOR GROUPS THAT HAVE BEEN ABLE TO GAIN CONTROLLING INTERESTS ARE NOW DICTATING HUDBAY’S OPERATING PRIORITIES .
HUDBAY’S ROSEMONT PROJECT IN ARIZONA HAS A PROVEN POTENTIAL BUT THE BUREAUCRACY THAT IT FACES MAKES IT VERY TIME CONSUMING WHEN IT COMES TO BRINGING IN A NEW MINING OPERATION . THE OBSTACLES ARE MANY AND OCCUR AT MANY LEVELS WHERE POLITICS PLAY A SIGNIFICANT ROLE .
HUDBAY MAY HAVE TAKEN ON MORE THAN IT CAN HANDLE ALONE . JOINT VENTURES ON BILLION DOLLAR PROJECTS APPEARS TO BE THE ORDER OF THE DAY . THERE ARE SEVERAL MINING COMPANIES CURRENTLY OPERATING IN ARIZONA WHO WOULD BE INTERESTED IN A SHARE OF THE ROSEMONT PROJECT . AT LEAST ONE OF THESE HAS SMELTER CAPACITY .
HUDBAY WILL NEED TO RESET ITS CLOCK WHEN IT COMES TO ITS OPERATIONAL PRIORITIES . IT NEEDS TO REDUCE FINANCIAL RISKS BY FINDING A STRONG JOINT VENTURE PARTNER .
WHAT HAPPENED TO MY REPLY ?
HUDBAY IS HERE TO STAY IN ONE FORM OR ANOTHER . HUDBAY IS A CANADIAN MINING ICON AND HAS WEATHERED MANY CRISES FROM WHEN IT WAS FOUNDED . IT PROSPERED ON WELL-RUN DOMESTIC MINING OPERATIONS RELATED TO RELATIVELY SMALL BUT HIGH-GRADE BASEMETAL/GOLD DEPOSITS .
WHEN HUDBAY ACQUIRED THE CONSTANCIA PROJECT IN PERU IT WAS MOVING INTO THE INTERNATIONAL ARENA . THE DEPOSIT IS BIG , BUT LOW- GRADE . PERHAPS , HUDBAY TOOK ON MORE THAN COULD HANDLE BOTH FINANCIALLY AND TECHNICALLY . HUDBAY THEN MOVED ON TO ACQUIRE THE ROSEMONT PROJECT IN ARIZONA . THIS IS ANOTHER LARGE , BUT LOW-GRADE COPPER DEPOSIT REQUIRING BILLIONS OF DOLLARS IN CAPEX .
THE ROSEMONT PROJECT HAS BEEN BURDENED WITH US GOVERNMENT BUREAUCRACY AT EVERY LEVEL OF PERMITTING . AS SUCH , THE DEPOSIT SITS IDLE AND PRODUCES NO CASH FLOW . AT LEAST ONE MAJOR SHAREHOLDER GROUP HAS BECOME FRUSTRATED AND IS PUTTING PRESSURE ON HUDBAY TO START GENERATING REVENUE AND SHAREHOLDER BENEFITS .
TO SEE OR MERGE IS THE DECISION THAT HUDBAY MUST MAKE . THERE ARE CURRENTLY MINING COMPANIES OPERATING IN ARIZONA THAT WOULD BE INTERESTED IN A MERGER . AT LEAST ONE COMPANY ALREADY HAS SMELTER FACILITIES THAT COULD BE USED TO PROCESS HUDBAY’S ROSEMONT PRODUCTION . A MERGER WOULD BE BEST UNDER THE CIRCUMSTANCES .