Canadian lawmaker seeks increased scrutiny on mining industry in wake of NY Times story on Hudbay Minerals

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Spurred by Sunday’s front-page New York Times story on Hudbay Minerals’ alleged human rights abuses in Guatemala, the entire Canadian mining industry is coming under increased scrutiny by Canadian lawmakers.

Liberal MP (Member of Parliament) John McKay is calling for stricter oversight of Canadian mining companies abroad as plaintiffs increasingly look to Canadian courts to seek justice, according to an April 5 story in the Toronto Globe and Mail.

“These unwelcome instances keep on coming up,” McKay said in an interview after the Times story shone a harsh spotlight on Hudbay accused of serious crimes in Guatemala, the Globe and Mail reported.

“And not only does the mining company suffer brand problems, so also does the industry suffer brand problems, and so also does our nation suffer brand problems …. It has been and continues to be a bit of a black eye on our country,” the Toronto newspaper quoted McKay as saying. Continue reading

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Hudbay’s debt, low copper prices puts Rosemont on back burner

Hudbay Minerals’ decision to delay construction of the $1.5 billion Rosemont copper project underscores the increasingly perilous financial outlook for the Toronto-based company that is mired in debt during a period of low copper prices that are expected to continue for several years, if not much longer.

Under the direction of former CEO David Garofalo, Hudbay embarked on a five-year plan to open two new mines in Manitoba and the Constancia mine in Peru, by far its largest operation. (Garofalo resigned in December and is expected to become CEO of Goldcorp in April.)

Hudbay borrowed more than $1.2 billion to finance construction of the three mines. The company was banking on the demand for copper to remain strong and prices to remain high.

But instead, demand dropped and copper prices declined from $4.50 a pound in early 2011 to about $2.10 per pound today. The collapse in copper prices forced Hudbay to repeatedly borrow more money.

Hudbay 's former CEO David Garofalo

Hudbay ‘s former CEO David Garofalo

Hudbay increased its credit lines by $200 million just in 2015 and is now seeking a $550 million credit line. Hudbay paid $109 million in interest last year, according to its 2015 Financial statement.

Moody’s Investors Service downgraded Hudbay’s long-term debt on Monday and issued a “negative” rating outlook.

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Hudbay announces construction delay for the proposed Rosemont copper mine

Hudbay Minerals Inc. announced Wednesday that construction of the proposed Rosemont copper mine will be delayed until the depressed copper market improves but that it still intends to build the $1.5 billion project.

Low copper prices also forced Toronto-based Hudbay to reduce the value of the Rosemont project.

The company said “a pre-tax and after-tax impairment of $114.5 million was recognized on Rosemont goodwill mainly as a result of lower expected copper prices and an expected delay in the start of construction on the Rosemont project.”

Nevertheless, Hudbay stated it intends to eventually build the Rosemont mine. Continue reading

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Jaguar video generates widespread media attention on threats posed by Rosemont Mine

A wildlife surveillance video capturing movements of the only known wild jaguar in the United States is focusing national attention on the impacts of the proposed Rosemont copper project on the big cat and other endangered species.

The mine would be constructed in the biologically-rich Santa Rita Mountains that hosts a dozen endangered species including the jaguar.

The video taken by the Center for Biological Diversity and Conservation CATalyst, shows the male jaguar named “El Jefe” roaming through mountain woodlands and a stream that would be impacted by the proposed open-pit copper mine. Continue reading

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Peruvian communities begin 72-hour strike protesting Hudbay’s Constancia Mine as company’s stock price hits record low

Peruvian communities near Hudbay Minerals’ Constancia Mine on Monday began a 72-hour strike protesting the company’s refusal to negotiate over a host of economic, social and environmental issues.

The action comes on the same day that Hudbay’s stock closed at a record low $1.65 a share on the New York Stock Exchange.

Residents of communities in the district of Velille in the province of Chumbivilcas called the strike after Hudbay refused repeated requests for meetings, according to a press release issued by MiningWatch Canada. The strike comes 14 months after residents in nearby Uchucarco staged a protest march at Hudbay’s Constancia mine site. Protesters later seized and occupied the Constancia open pit site in Nov. 2014.

Velille Mayor, Sergio Valencia Salcedo, and the President of the Velille Defence Front, Guider Puma, have indicated that invitations and letters they sent to Hudbay and the government requesting dialogue have not received a response, the MiningWatch press release states. Continue reading

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