Shougang Hierro Perú says it is operating at half of its iron ore extraction capacity following the resumption of mining activities from 1 June, while evaluating Covid-19’s economic impact, Kallanish learns from a company stock exchange filing.

Peru’s securities market commission requested SHP fill out an exceptional form to inform shareholders and the market about the impact it has sustained from Covid-19. SHP did not release its first-quarter audited financial results within the regulatory period due to an ongoing accounting review.

SHP was forced to halt operations on 16 March in order to reduce the risk of Covid-19 spread in Peru. During the period, the miner was able only to fulfil its raw materials export agreements from existing volumes, while maintaining its main economic indicators in line on-year.

SHP’s operating income and revenue were almost flat on-year in the first half of 2020. These were up by 0.72% and 0.74% respectively over H1 2019, while net cost and expenses rose by 41.2% y-o-y. Net income fell by -76.1% on-year, according to preliminary data.

SHP maintained all its workforce during Q1 and is appealing the Ministry of Economy’s decision not to include the company in its extraordinary plan for preserving jobs during June.

Before iron ore production was halted in April and May due to Covid-19 restrictions, Peru’s output totalled 2,438,058t in Q1. From this total, SHP’s production comprised almost 97.1%.

SHP is a subsidiary of major Chinese steelmaker Shougang Group. The Peruvian company extracts, processes and sells iron ore from its deposits located in the Marcona District of Nasca province, in Peru’s Ica region. MSP processes Shougang's mining tailings.