TORONTO (miningweekly.com) – Canadian base-metals producer HudBay Minerals earned C$7,3-million in the fourth quarter of 2009, compared with C$15,8-million a year earlier, the firm reported on Wednesday.
Profit was negatively affected by lower sales of copper cathode, as well as some C$6,9-million in severance costs, HudBay said.
Chinese buyers made fewer scrap purchases of copper cathode in the fourth quarter, compared with earlier in the year, and the North American market remained weak, so HudBay opted to increase its inventories rather than sell into the soft market.
As a result, the company ended the year with unsold inventory of around 3 800 t of copper.
Management expects to sell most of the excess inventory, together with new copper production in the first quarter of 2010.
"Although our fourth-quarter results were affected by lower copper sales, we are already seeing a drawdown of HudBay's inventory levels and we look forward to stronger results beginning in the first quarter of 2010," interim CEO Warren Holmes said in a statement.
Fourth-quarter revenue amounted to C$166,67-million, compared with C$178,78-million in the same period of 2008.
Like many of its rivals, HudBay halted some operations and curtailed spending when metals prices fell and financial markets froze up in 2008.
However, the company announced in October last year it would restart its shuttered Chisel North mine and concentrator in Manitoba, to provide zinc concentrate feed for HudBay's Flin Flon zinc plant.
The firm also mines zinc, copper, gold and silver from its 777 and Trout Lake mines, in Flin Flon and has started development of the first phase of its new Lalor project, which contains zinc, copper and gold.
HudBay announced in June last year it would close its 80-year-old copper smelter in Flin Flon by mid-2010.