Mexican miner Minosa under bankruptcy protection

Bnamericas Published: Wednesday, January 04, 2023
Mexican miner Minosa under bankruptcy protection

Minera del Norte (Minosa), a subsidiary of steelmaker Alto Hornos de México (Ahmsa), has gone into bankruptcy protection, but the firm's iron ore and coal mining operations are continuing normally. 

The bankruptcy process, equivalent to Chapter 11 in the US, “means there is a legal suspension of payments to third parties for previous company obligations and guarantees may not be executed for non-payment," Ahmsa said in a statement sent to the Mexican stock exchange (BMV). 

"This procedure was originally requested as a result of the unilateral and improper cancellation of the contracts for the supply of thermal coal to Comisión Federal de Electricidad [CFE], a situation that substantially affected Minosa's operations," the statement reads.

The company stressed that this judicial decision "does not affect Altos Hornos de México in any way."

"As the statement says, Minosa fell into a financial crisis since CFE canceled the thermal coal purchase contracts that backed its loans. But iron ore and metallurgical coal operations continue normally while the financial aspect is restructured," an Ahmsa spokesperson told BNamericas.

The company representative added that power plants owned by state-owned utility CFE in Nava, Coahuila state, are "practically halted" because they use coal supplied by Minosa through its Micare unit. "Now, they [the CFE] are supplying them with some metallurgical coal, but it doesn't work well, damaging the equipment."


In December, local media reported that Ahmsa had accused CFE of acting "in bad faith" after two of its plants in Monclova, Coahuila state, experienced power cuts over alleged unpaid electricity bills, pointing out that 17,000 jobs depended on these two facilities.

"The available financial resources were allocated to comply in a timely manner with the [second] US$54mn payment to [state oil company] Pemex for the reparation agreement which the company was forced into. Therefore, deferred payment formulas were proposed to CFE to cover the full payment of the bill," Luis Zamudio, general director of Ahmsa and subsidiaries, said in a separate statement.

Ahmsa had already made a first payment of US$50mn in November 2021 as part of the reparation deal, under which the steelmaker was obliged to pay US$216mn that Pemex was estimated to have paid in excess for the steelmaker's fertilizer subsidiary Agronitrogenados in 2014.

However, CFE retorted in a statement of its own that Ahmsa had requested, in a letter signed by Luis Zamudio, "that the due dates of the invoices and payments for electricity consumption, for October and November 2022, be deferred for payment in February and March 2023."

"In addition to not paying off their debt, they want to consume electricity for the next six months without paying it, at the cost of CFE and Mexicans," the utility said.

Minosa is responsible for several mining operations: Micare, which produces around 7Mt/y of coal; Mimosa, which has output of approximately 4Mt/y of coal; iron concentrate producer Cerro del Mercado (Cemesa); and miner Compañía Real del Monte y Pachuca, which also operates the Loreto gold and silver treatment plant.

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