About Grupo México (GMéxico)
Grupo México, a prominent conglomerate in mining and transportation, reported a 10% increase in net income for the second quarter. The company, led by entrepreneur Germán Larrea, is one of the world’s largest copper producers by volume. GMéxico operates in various sectors, including mining, transportation, and infrastructure.
Financial Performance
GMéxico’s net income reached $1,230 million, up from the previous quarter, despite a 4% decrease in revenue to $4,240 million. This result surpassed the analysts’ consensus estimate of $4,220 million.
The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 1.4% to $2,360 million, surpassing analyst expectations of $2,220 million.
Copper Production and Costs
Although copper production decreased by 1.3% to 267,325 tonnes compared to the same period last year due to lower production at the Buenavista mine in Sonora, GMéxico’s strategic focus on zinc and silver production at Buenavista Zinc impacted copper output.
Despite a 2.9% decline in copper sales compared to the previous year, sales of molybdenum (used to strengthen steel and accelerate oil refining), along with zinc and silver, increased. The effective cash cost for the mining division’s primary metal dropped by 10% to $0.93 per pound of copre, against an average price of $4.55 per pound.
Analyst Perspectives
JPMorgan analysts noted GMéxico’s strategic decision to prioritize zinc and silver production at Buenavista Zinc, which affected copper output. They highlighted GMéxico’s lowers-than-industry-average cash costs, benefiting from higher subproduct credits.
Santander analysts emphasized the reduction in extraction costs for net subproduct metals. “Grupo México’s overall balance remains solid,” they affirmed.
Investment Opportunities
With the U.S. imposing a 50% tariff on copper imports starting August 1 to promote domestic development, the U.S. still relies on imports for nearly half of its refined copper needs. Chile, Canada, and Mexico are the primary sources.
GMéxico sees an opportunity to invest up to $6,200 million in reopening and expanding projects aligned with the Trump administration’s new mining and industrial policies.
The company plans to expand production at its Ray and Silver Bell copper mines and reopen the Hayden smelter, managed by its U.S. subsidiary Asarco in Arizona, following years of negotiations with local unionized workers.
The Tía María project in southern Peru, also managed by GMéxico, is progressing as planned and is expected to start in 2027.
Transportation and Infrastructure Challenges
GMéxico Transportes, the logistics arm of GMéxico, reported that its delisting from the BMV should be finalized in September, pending regulatory process advancements.
The company announced its delisting intention from the BMV in early June and received shareholder approval to initiate the process on June 27.
GMéxico Transportes executives stated that, while there is value in the public market, operating as a private company aligns better with their core business objectives. This change will also optimize capital structure, reduce regulatory and administrative costs, and provide more flexibility to execute their long-term strategy.
Key Questions and Answers
- Q: Who is Grupo México (GMéxico)? A: GMéxico is a prominent Mexican conglomerate operating in mining, transportation, and infrastructure sectors. It is led by entrepreneur Germán Larrea and is one of the world’s largest copper producers by volume.
- Q: What were GMéxico’s financial results for Q2 2025? A: GMéxico reported a 10% increase in net income to $1,230 million, with revenue decreasing 4% to $4,240 million. EBITDA increased by 1.4% to $2,360 million.
- Q: How did copper production perform despite the strategic shift? A: Copper production decreased by 1.3% to 267,325 tonnes due to lower output at the Buenavista mine. However, GMéxico’s strategic focus on zinc and silver production at Buenavista Zinc impacted copper output.
- Q: What are the investment opportunities for GMéxico? A: GMéxico sees potential to invest up to $6,200 million in reopening and expanding projects aligned with the U.S. administration’s new mining and industrial policies, including copper mines and smelters.
- Q: What challenges does GMéxico Transportes face? A: GMéxico Transportes plans to delist from the BMV in September, pending regulatory approvals. The company aims to optimize capital structure and reduce costs by operating as a private entity.
