Solid performers that buck the trend
As copper prices plummeted last year, two things prevented Grupo México - the world's 10th largest copper producer - from suffering a profits fall. One was a tight grip on costs. The other was diversity. Not only does it produce a wide range of base and precious metals, it also owns a railway. Grupo México has a 99% stake in Grupo Minero México, the mining arm of the company. It's other main subsidiary is Grupo Ferroviario Mexicano which operates the railway business.
When the country's railways were being privatized in 1997, Grupo México seized the opportunity to buy a major stake in Northern Pacific Railroad for $527 million. Union Pacific and a Mexican construction company, Ica, bought the rest. "Compared with what the other guys paid they did well," says Christopher Albi, industry analyst at Merrill Lynch in New York. "They paid slightly more than the minimum price set by the government." Construction company Tribasa, on the other hand, bid $323 million for the shorter Southeastern Railroad. By some estimates they paid $50 million to $60 million too much. In March this year, Grupo Minero México issued a two-tranche $500 million yankee bond to refinance the debt.