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LUXEMBOURG - Nexa Resources S.A. (NYSE:NEXA), a $621 million market cap zinc producer with $2.81 billion in revenue, has partially and temporarily suspended operations at its Cajamarquilla smelter in Peru after operator employees represented by their labor union began a strike on Tuesday.
The zinc producer reported that despite several weeks of negotiations involving the Ministry of Labor, no agreement was reached with the operator’s union. The company noted that dialogue channels remain open and that it has already secured an agreement with the technician’s union, which is not participating in the strike. According to InvestingPro data, the company’s stock has declined by 44% over the past six months, though analysis suggests the stock is currently undervalued.
Nexa stated it is monitoring the situation and implementing measures to ensure the health and safety of employees, contractors, and local communities in accordance with applicable regulations.
Despite the work stoppage, the company does not expect any impact on its 2025 sales guidance, according to the press release statement.
The Cajamarquilla facility, located in Lima, is described as the largest smelter in the Americas. It is one of three smelters operated by Nexa, with the other two located in the state of Minas Gerais, Brazil.
Nexa Resources operates four underground polymetallic mines—two in Peru and two in Brazil—as well as one open pit mine in Peru. The company ranked among the top five producers of mined zinc globally in 2024 and one of the top five metallic zinc producers worldwide during the same year.
In other recent news, Nexa Resources has been the subject of a new analysis by BMO Capital Markets, which initiated coverage with a Market Perform rating and set a price target of $6.00. This assessment comes amid the company’s ongoing challenges, including weak smelting margins and a slow ramp-up at its Aripuana project. Despite these hurdles, BMO Capital analysts anticipate an improvement in Nexa Resources’ operating cash flow, although the company is prioritizing debt reduction in the near term. In a separate development, Nexa Resources announced plans to issue new senior unsecured notes, guaranteed by its subsidiaries. The proceeds from this offering are intended to fund a cash tender offer for existing notes due in 2027 and 2028 and for general corporate purposes. The company clarified that these notes will not be registered under the U.S. Securities Act of 1933 and will be available only to qualified institutional buyers or non-U.S. persons. Nexa Resources’ focus on improving cash flow and reducing leverage remains a key area of interest for investors.
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