Hudbay stock continues downward spiral as copper prices decline

Hudbay Minerals Inc. stock continued its precipitous decline closing Wednesday at a six-year low of $4.13 a share on the New York Stock Exchange as fears of a slowing world economy continue to depress commodity prices.

Hudbay is proposing to construct the Rosemont Copper Mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.

The company’s stock has plummeted since closing at $10.28 on April 27 as copper prices continue to decline on weakening demand from China. Copper closed at $2.30 on the COMEX Wednesday, down from $2.90 in early May.

Copper has historically been a volatile commodity with wide price swings that closely track worldwide economic trends.

Screen Shot 2015-09-23 at 8.13.33 PMHudbay’s stock price tends to go up and down with the price of copper.

Screen Shot 2015-09-23 at 8.17.06 PMThe Arizona Daily Star on Thursday published a brief synopsis of the impact of copper prices on the state’s economy from 2001 through 2015.

“The sometimes dizzying bust-boom-slump-boom history of copper is especially well-known in Arizona, a region that — combined with New Mexico and Sonora — is the world’s second-richest source of the metal after Chile,” the Daily Star reports.

In October 2001, copper was trading at 63 cents per pound. The price soared to nearly $4.50 a pound by June 2011, before beginning a steady decline to $2.30 Wednesday. Slowing growth in China, which consumes about 45 percent of the world’s copper, is widely cited as the primary cause for the steady drop in copper prices.

Hudbay Minerals CEO David Garofalo stated at the company’s annual meeting last May that the copper price would have to return to $3.50 a pound before Hudbay would bring on additional copper production, raising questions over when the Rosemont project would be viable.

The company, however, told the Daily Star earlier this month that it intends to move forward with the Rosemont project because of the cyclical nature of copper prices.

Hudbay still needs several key permits before construction could begin, including a Section 404 Clean Water Act Permit from the U.S. Army Corps of Engineers and a Air Quality Control Permit from the state of Arizona.

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