Grupo Mexico SAB, the world’s fourth-largest copper producer, fell the most since March after congress called for a cancellation of the company’s Cananea mine concession following a chemical spill.
Grupo Mexico, billionaire German Larrea’s holding company, fell 2.9 percent to 45.75 pesos at 1:21 p.m. in Mexico City. Earlier it lost as much as 3.9 percent, the most intraday since March 13. The shares have lost 5.3 percent since a copper sulfate solution spill was detected at the company’s Cananea mine Aug. 6 in the northern Sonora state.
The permanent commission of Mexico’s congressional houses yesterday called for the cancellation of Grupo Mexico’s concession and a suspension of operations at the mine after the spill contaminated local rivers. Mexico’s environmental prosecutor, known as Profepa, announced Aug. 18 that it will seek a fine and a prison term of up to nine years for those found responsible. The spill is being investigated by the National Water Commission.
“The shares have been falling and the noise around this case will continue until the water commission completes its investigation,” Rodrigo Garcilazo, an analyst at Corporativo GBM, said in a phone interview from Mexico City. “If there is a temporary suspension of the plant, this could have more long-term impacts on Grupo Mexico than expected.”
The copper sulfate solution that spilled into two Sonora rivers isn’t hazardous, Grupo Mexico said yesterday in a statement. The company said it “regrets the incident” and expects the environmental alert to be lifted tomorrow.