US-based Chilco River Holdings acquires Mexican iron ore mining complex

Wednesday, 15 November 2023 23:30:48 (GMT+3)   |   San Diego

US-based Chilco River Holdings has acquired the Mexican mining company Leuffer Desarrollos, operator of 11 iron ore mining concessions in Mexico, reported the Mexican consulting firm RIóN, a specialist in company mergers and acquisitions. Financial terms were not disclosed.

According to Chilco River, geologists and international specialists are carrying out studies on the iron ore reserves of around 60 million tons in its four mining concessions in Sonora.

Under the new owners, Leuffer Desarrollos will increase production by 50 percent each year starting in 2024 and add two more open pit mines.

Leuffer Desarrollos' operational plan is to produce one million metric tons of iron ore in 2023. In recent years (2019 - 2022), Leuffer exported more than 1.3 million metric tons (mt) of iron ore to China (94 percent of the total), Hong Kong (4 percent) and the United States (2 percent).

According to Chilco River, Mexico is the 12th largest producer of iron ore in the world, with potential and growing every year, to become the top five in the next two to three years. Currently, Mexico produces around 3 percent of the world's iron ore, but its strategic location, climate, economic conditions and qualified workers are advantages to increase its total production to serve global markets such as China, the United States, among others.

Of Leuffer Desarrollos' mining concessions, four are in the northern state of Sonora and the rest in the western states of Michoacán and Jalisco. All mines are in the vicinity of major shipping ports, railway facilities and highways.

In Michoacán, there are two of the largest iron mining operations in Mexico, one is the Las Encinas mining complex, owned by Ternium, which in 2022 produced 1.93 million mt of iron ore. The other large complex is Las Truchas, owned by ArcelorMittal, which is an open pit mining operation that last year produced 1.61 million mt, according to Chilco River.

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