Grupo Mexico S.A. de C.V. includes 100% of IMMSA and ASARCO. Low Cu prices, high energy costs in the year 2001, continued labor problems and enormous debt from the purchase of Asarco are all weighing heavily on Grupo Mexico as 2002 rolls around. Environmental liabilities at the Tacoma smelter are also looming large.

Grupo Mexico S. A. de C.V.

Mexican corporate giant Grupo Mexico S.A. de C.V. includes a separate mining subsidiary IMMSA as well as ASARCO Incorporated and other diverse interests apart from mining such as 74% of the largest and most profitable railroad in Mexico etc.

State of Grupo in early 2002: Unionized workers at Grupo Mexico's La Caridad, San Martin and Nueva Rosita operations went on strike . These facilities produce 180,000 tons of Cu annually, or 1.2% of the world's production. Grupo's burdening debt of approximately $2.9 billion has come about largely as a result of its' purchase of Asarco in 1999. Grupo lost $254 million or $0.39 per share in 2001. As a result Grupo's outstanding debt has been downgraded numerous times by Fitch and S&P in late 2001 and early 2002. Currently Grupo is in negotiations with its creditors to delay repayment of $450 million in debt it guaranteed on behalf of Asarco, and this dept is now due because the company has violated covenants regarding collateral assets needed to cover the loan. In addition Asarco (and thus Grupo) is being forced to spend $60 million this year to clean up its Tacoma smelter. Environmental groups are concerned that Grupo might let Asarco go bankrupt - forcing the cleanup to be covered by the Superfund Trust (which, not surprisingly, has mostly gone to pay lawyers thus far).

This Week in Rock, Tuesday March 12, 2002

IMMSA (Grupo Industrial Minera Mexico)

IMMSA is a subsidiary of Grupo Industrial Minera Mexico S.A. de C.V. (GIMMEX), Mexico's largest mining and metallurgical refining group and mineral producer. GIMMEX is owned outright by Grupo Mexico .A. de C.V.

Various GIMMEX subsidiaries/operating units include: Mexicana de Cobre, Mexicana de Cananea, Minerales Metalicos de Norte, Zinc de Mexico, Carbonifera de Mexico, Carbonifera de Nueva Rosita, and several other subsidiaries involved in exploration as well as non-mining interests. See IMMSA subsidiary table for details

Until August 9, 1994 GIMMEX was affiliated with ASARCO through it's 28.3% direct interest in MEDIMSA (Mexico Desarrollo Industrial Minero S.A. de C.V., a privately held company which was 68.8% GIMMEX, 28.3% ASARCO and 2.9% Chase Manhattan Bank). Shares were swapped and the organization regrouped into a new publicly traded company, "Grupo Mexico", which trades on the Mexican Bolsa under the symbol GMEXICO. GIMMEX plans a 5-year 1.7 billion dollar investment program in Mexico. GIMMEX reported adjusted net profits of $US870 million in the 2Q96 (down from a high of $1.5 billion in 1Q95!!! the peso devaluation helped) Through various subsidiaries including IMMSA, Grupo Mexico owns and operates numerous mines and smelters throughout the country. These include:

Cananea Mine and smelter, Sonora (155,000 tons of Cu annually)
La Caridad Mine and Nacozari smelter, Sonora which received an $118 million expansion as of April, 1996.
San Luis Potosi Cu and Zn smelter/refineries
Santa Barbara, Chihuahua
Charcas, San Luis Potosi
San Martin, San Luis Potosi
San Antonio Mine, East Camp of Santa Eulalia District, Chihuahua
Velardena, Durango
Nueva Rosita

Geomimet #209 Sep/Oct 1997
SEG October, 1995
PAY September, 1994

Major Exploration commitments

Leon-Guanato Mineral Preserve, Guanajuato During the summer of 1998 the bidding on the Leon-Guanajuato Reserve packages was concluded. IMMSA paid $2.3M subject to a 2.5% nsr for Fraccion 1, the southern part. Penoles got the northern parcel for about half that. The other player in the district is Noranda through their options from Golden Temple.

El Arco Cu-Au porphyry, Baja California. A major low-sulfide type Cu porphyry with some Au credits which has been in advanced exploration for nearly 2 decades. Located almost exactly halfway down Baja peninsula.

ASARCO Incorporated AR (NYSE)

A wholly-owned subsidiary of Grupo Mexico S.A. de C.V.

After an entertaining  merger and takeover dance which included Phelps Dodge and CyprusAmax, ASARCO decided to merge with Grupo Mexico. (See News & Rumors for scuttlebutt). The combined entity which amounts to the marriage of the old U.S. based ASARCO Inc. with one of Grupo Mexico's 100% controlled subsidiaries, ASMEX Corporation (that owned 10% of ASARCO to begin with) will continue to operate under the name of ASARCO Incorporated. This gives Grupo Mexico considerable expanded presence in both the southwest U.S. and South America, particularly Peru. El Viejo Gambusino figures that all things considered Grupo Mexico will probably continue run their Mexican exploration and mining divisions through IMMSA and use their newly expanded presence through the new ASARCO Incorporated to expand outside of their domestic presence  Mexico.      

Pursuant to the 3Q99 merger with Grupo Mexico, their subsidiary ASMEX Corporation has been merged with and into ASARCO Incorporated. Upon consummation of the merger, all outstanding shares of common stock representing ownership of ASARCO Incorporated were cancelled and those shares not purchased by ASMEX Corporation pursuant to its recently completed tender offer were converted into the right to receive $29.75 cash, without interest, the price pursuant to the tender offer. The business will continue to operate under the name ASARCO Incorporated. 

   Press Release 15Nov99