Penoles Says Zinc Demand to Rise 3% in 2011, Fees Unchanged

Feb. 21 (Bloomberg) -- Industrias Penoles SAB, Mexico’s second-largest mining company, expects global demand for zinc to rise by about 3 percent this year and fees from smelters to stay unchanged.

“Treatment fees for basic minerals will remain similar to the previous year,” Fernando Alanis, Penoles’s chief executive officer, said today in an interview in Cancun. Fees to refine minerals such as copper will likely increase, he said.

Last year, Penoles’s plants processed about 70 percent of Mexico’s production of zinc, which is used to galvanize steel. Macquarie Group Ltd. said Dec. 20. it expected zinc processing fees, which are paid by miners to smelters to process concentrates into metal, to fall as much as 20 percent in 2011.

Alanis also said copper is becoming “the metal of choice” again after new technology increased the capacity of wires made of the commodity to transmit data. The price will likely be little changed this year, he said.

Penoles rose 4.5 pesos, or 1.1 percent, to 414.2 pesos at 1:49 p.m. on the Mexican Stock Exchange. The shares have gained 51 percent in the past year.