Oscar González practically shrugs at the mention of the numerous demands that come with his role as CEO of the world’s newest copper giant, Southern Peru Copper Corp. The 68-year-old Mexican engineer likes to point out that he has already raised six children and has ten grandchildren, so hard work is nothing new. In fact, he happily works side trips into his frenetic schedule, which has required frequent flights between Lima and Mexico City since 1999, when he moved to Peru. Says González, “I always go out of my way to see my grandchildren in Mexico.”
It’s a sweet sentiment, but even he knows that turning New York Stock Exchangelisted Southern Peru into an attractive buy will be anything but effortless. The company created on April 1 by conglomerate Grupo México, which merged the original Southern Peru with its Minera México operations but retained the name, is now the world’s No. 2 copper miner by market cap ($7 billion). That’s the good news. Southern Peru also has more than $1 billion in high-interest debt and a stock that is illiquid. And copper prices may start sinking.
González seems unfazed. “We’ll prepay $200 million in debt this year,” he says, “and if investors like our second-quarter results, we’ll issue shares this year to help pay more debt.” He plans to have the company’s debt all cleaned up within five years.
The CEO is also optimistic about Southern Peru’s new Tía María project in Peru, due to begin production in 2007. “The Tía María mine may not be as delicious as Tía María, the drink,” says González, with his trademark wry smile, “but it is good news for investors.”
