The steel company Altos Hornos de Mexico (AHMSA) announced the permanent closure of its Cerro del Mercado mine, located in the state of Durango, due to the weak market conditions. The mine employs 420 workers and produces more than 40,000 mt iron ore per month for AHMSA's steel mills.
The sharp decline in steel production has eliminated the need for iron ore from the mine, explained AHMSA's spokesman Francisco Orduña.
"Since October of last year, production levels have been reduced and as the negative conditions in the marketplace prevail we are currently only operating at 65 percent capacity, which can be sufficiently supplied for by Coahuila's iron ore mine," further explained Mr. Orduña.
AHMSA also released its Q1 financial results this week, which showed a decrease of 84.6 percent in net profits compared to last year's Q1, and a drop of 37.6 percent in sales revenues. The company also reported a 28 percent drop in sales volumes and a 50 percent decrease in steel prices in the first quarter.
In order to cope with the harsh economic environment, the firm has delayed projects and investment plans as well as cut production levels and accelerated mill maintenance plans.