Volcan Compania Minera

Peru is one of the leading countries in the export of zinc, gold, lead and copper. In 2009, the country was the second-biggest cooper producer, leaving behind the United States with 1.27 million metric tons produced. The production of zinc for the year 2009 equaled 1.50 million MT, with silver and gold totaling 3.85 million kilograms. Volcan Compania Minera /ticker VOLCABC1/, is one of the two largest national mining companies, given great credit for its contributions as a mass producer of copper, zinc, lead, and silver concentartes. The company has over 3000 employees and is also engaged in investment management activities.

Volcan Compania Minera was founded in 1942 by Leon James Rosenshine under the name Volcan Mines Company, a subsidiary of Volcan Mines Leasing Company. The miner was renamed and took its current name in 1943. Volcan operates mainly in the regions of Yauli, Cerro de Pasco, Chundar and Vinchos.

In 1968, Volcan Compania Minera treated close to 219 thousand tons of ore, processing 36 thousand tons of zinc concentrate. Volcan operated just two mining sites - the Ticlio and the Carahuacra and till 1972, the company was privately owned, earning profits at $200,000 per year. The low profits were due to lack of funding for its modernization and the renovation of its outdated facilities. In 1979, the gross sales of the company stood at close to $11 million while in 1986, the net sales were at $14.3 million. Most of the stock was owned by wealthy families (Moreyra, Letts, and Beltran) that had representatives in the Board of Directors. Later on, the company's facilities were acquired by the government and sold to foreign companies.

Volcan began to expand and entered the zone of high income companies in 1997 after the purchase of the Mahr tunel mining complex, worth $127.80 million. The mining complex comprises of two sites: San Cristobal and Andaychagua. The acquisition was followed by another major event: in 1999, Volcan Compania Minera acquired Empresa Minera Paragsha for about $61.80 million. As a result, Volcan became Peru's second largest zinc producer and the fifth largest in the world. Zinc is the company's most important product. Volcan's ambitious plan is to develop a large scale production, focused primarely on the processing of zinc and lead. The company aims to make up for the serious financial losses and debts incurred in the period 2000-2002 when zinc prices dropped worldwide. As a result of falling prices, the annual production dropped down by 20 percent in 2003.

In the period between 2003 and 2006, the price of zinc got stable once again, resulting in steady financial growth for the company and helping to restore its good position on the market. Volcan Compania Minera is trading on the Lima Stock Exchange, Latibex, and the Madrid Stock Exchange. Volcan also operates via several subsidiaries, including Empresa Administradora Chungar SAC, Compania Minera Huascaran SAC, and Shalca Compania Minera SAC, among others. The company and its subsidiaries own a mining area of approximately 260 000 hectares.

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