Grupo Mexico SAB de CV

BMV:GMEXICOB

Earnings Call Transcript 2020-Q4

[Operator]

Good afternoon. Thank you for holding, and welcome to Grupo México's Fourth Quarter and 2020 Earnings Conference Call. With us this afternoon is our Vice President, Mr. Xavier Garcia de Quevedo; Mr. Oscar Gonzalez; Ms. Marlene Finny; Mr. Francisco Zinser; Mr. Isaac Franklin; and other executives who will discuss the fourth quarter and annual 2020 financial performance of the company, giving you a summary of the latest news and address any questions you might have at the end of the call.

Before we begin, I would like to remind you that information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions not to place undue reliance on these forward-looking statements.

Grupo México undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All results are expressed in full U.S. GAAP.

The presentation may be followed through our webcast. [Operator Instructions] A copy of the slides that the company we'll be reviewing today is available on the website at grupomexico.com.

[Operator Instructions] Now we will begin with Ms. Marlene Finny.

[Marlene de la Torre, executive]

Hi, good morning, everyone, and thanks for joining us today for Grupo México's fourth quarter earnings conference call. Joining me today are all the top executives for our main subject areas in the different divisions that we have. For today's conference and -- our Vice President, Mr. Xavier Garcia de Quevedo. For today's conference, we will follow a presentation that can be downloaded from our website or accessing the webcast. Whatever is better for you.

I would like to start today's call by sending my best wishes to everyone in this new year and hoping you are staying healthy and positive. On our call today, we will be following the program detail on Slide #3 of our presentation. In these occasions, we will go straight into our fourth quarter and 2020 main highlights mentioning Grupo México's achievements for the quarter and the year. Then Mr. Xavier Garcia de Quevedo will provide detailed information regarding our Mining Division, commenting on the industry's economic environment, the division's financials and highlights; followed by Mr. Isaac Franklin that will comment on the financial results and main events of our Transportation Division. And finally, Mr. Francisco Zinser will comment on the relevant events that occurred during the quarter in our Infrastructure Division. At the end, we will open the line for questions and answers and any concerns you may have.

As we move forward to Slide #5, we are proud to look back to the last 10 years and realize how the company has grown and what it -- has been achieved. We have increased our revenue by 31%. We have managed to improve our EBITDA by 37%, and we have increased our EBITDA margin by over 200 basis points. We have also invested a sum of more than $18 billion, which has driven the economic development of the community where we operate as well as the company. So as you can see, even during 2020, even with a lower average copper price when compared, for example, to 2010, we have been able to increase our production, our EBITDA and our margins as well, focusing on costs and increasing also our Transportation and Infrastructure Divisions' numbers and results. So that is very positive, as you see, a decade -- the decade we have had.

This is also thanks to the investments we have been doing to improve and have state-of-the-art technology. And thanks to all of our collaborators that work and give their best efforts even during challenging times as we faced last year.

Continuing into Slide #6, I would like to take the time to mention Grupo México's actions and donations that were taken in year to face the COVID-19 pandemic. These donations and actions include several things, an extraordinary donation of MXN 500 million to protect all of our workers, the communities, their families to protect health care personnel in COVID hospitals in Mexico, delivering also a hospital in Juchitán, Oaxaca; donating 846,000 (sic) [ 486,000 ] medical kits; implementing 18 temporary hospitals with 250 beds in Peru; also 500 non-invading ventilators and thousands of food baskets in Mexico and Peru. All the details are also in our press release, so you can see everything we have been doing. Here, I just mentioned some of the things that are most important, but that has been the core and the priority in this year, is to protect the people that work in Grupo México, the communities and their families as well, the #1 priority, and we have also provided free medical and labor assistance 24 hours a day.

On the other hand, another very important thing for us and an issue that is at the core of our strategy is that the ESG strategies that we have implemented throughout the year that allow us to improve our ESG rating and permitted our inclusion to the Dow Jones Sustainability Index and the FTSE4Good Index as well. These achievements include reaching our goal of 0 fatalities in the Mining Division and reducing the accident rate by 45% when compared to 2019. We also developed 4 new corporate policies to unify commitments and objectives in all of our core divisions.

Moving forward to Slide #7. This is the one that has a scorecard for the fourth quarter. We can see our main financial and production highlights, which will be discussed in more detail as we move forward in the presentation. I would like to highlight our revenue increase of 2.1% for the full year 2021 compared to 2019 and an increase of 22.1% for the fourth quarter when compared to the fourth quarter of 2019. This shows how we have been improving, and we have also a 13.5% increase quarter-over-quarter when comparing the fourth quarter to the third quarter. So as we move forward throughout the year, we have seen better results, also helped by better copper prices, higher copper prices and a slight recovery from the pandemic.

Our 2020 consolidated operating income exceeded $3.9 billion representing an almost 14% increase year-over-year and an impressive 61.2% increase when comparing the fourth quarter of 2019 and the fourth quarter of 2020. As I mentioned before, we achieved a record of $5.3 billion -- over $5.3 billion during this year, which translates into an EBITDA margin expansion of over 280 basis points when compared to the previous year, netting in a margin of 49.1% for the year and 53.6% during the fourth quarter. This has been thanks to the prompt implementation of the most strict hygiene protocols all across our divisions and operations and countries in which we operate and all the efforts that our workforce and all the collaborators have put into this year.

Our Board of Directors committed into transferring value to our shareholders, approved a cash dividend per outstanding share of MXN 1.25. This result translates into a 5.5% dividend yield, which is similar to previous dividend yields over the past quarters, reporting a strong dividend program, which we have been following and being very constant over the past years. Finally, our cost efficiency policy allow us to accomplish a 20.5% reduction in our net cash cost year-over-year, while reaching a before mentioned production milestone.

In the next slide, Slide #7 -- Slide #8, sorry, there, you have all the numbers in hand in case you need them at any point during the presentation. So there, you can see our fourth quarter and our year revenue, operating income, EBITDA and cash flow. Our main highlights are there.

Continuing to Slide #9, you can see that it was a year full of changes, but record-breaking results for our Mining Division, along with our copper production of over 1.13 million tons -- or almost 1.13 million tons that we were able to reach, also increases in molyb produced and we have produced almost 14 million ounces of silver, setting a record production for both byproducts and copper.

Our cash cost decreased 20.5% compared to 2019, settling at $0.85 per pound, the lowest cash cost in AMC in the last 9 years.

In our Transportation Division, we are able to maintain our railway service and operations uninterrupted while safeguarding our workforce. As for volumes, we have seen a steady recovery after the second quarter of the year in tons-kilometers and carloads. We ended the year -- the fourth quarter with a decrease of 3.2% and 4.1%, respectively, in ton-kilometers and carloads when compared to the same quarter of 2019. Also important to mention that our PCR (sic) [ PSR ] implementation continues to improve our operating metrics during the year. A great example of this is a decrease in dwell time of 26% achieved in 2020. But Mr. Isaac Franklin will comment in the further details later on the presentation.

And just to give a quick overview of our Infrastructure Division highlights on Slide #11. Despite the challenging times, we saw a 350 basis point increase in our EBITDA margin mostly driven by the exceptional results of our Energy and Engineering business units. Our Engineering Service Company was able to increase the number of projects contracted with different clients in different industries, which translated into a 40% increase in revenue and 127% increase in EBITDA versus the same period of last year.

Perforadora Mexico oil rigs, our oil and drilling company, achieved a historic operational efficiency of 99.5%. But unfortunately, its EBITDA margin decreased, and this was due mainly to a reduction in our daily tariffs.

Moving on to Slide 12. We know that Grupo México maintained a solid balance sheet with lower leverage and net debt-to-EBITDA ratio below 1x, 0.9x. Our debt is mainly issued in U.S. dollar, representing 82% of the total debt, while the remainder is denominated in Mexican pesos. This is matching our revenues. And as you know, in our Mining Division, 100% of our revenues is in U.S. dollars, so it's not -- we try to match identical revenues to have a natural hedge there.

As you see and you can now see an overview in Slide #13, we continue to have a very comfortable maturity schedule with no significant payments until 2035. And cash flow generation of $4.05 billion during 2020. So we -- even in this challenging time, we remain a good liquidity, and we have a very comfortable and good, solid balance sheet as well.

I will now pass the call to Mr. Xavier Garcia de Quevedo to comment on our Mining Division's main highlights and results.

[Xavier García de Quevedo Topete, executive]

Thank you, Marlene. First of all, I hope you and your loved ones continue to be healthy and strong. As we move forward in the Mining Division's operating and financial highlights on Slide 15, as Marlene mentioned, this was a record year in copper, molyb and silver products, reaching 1.3 million tons of coppers produced, a nice thing for our company in an adverse and unusual environment. And I'm delighted by [ 1,300 operations ] in 2020, and I want to congratulate every single one of them for their great work.

Continuing with the business, our Mining Division sales increased 35.5% versus the fourth quarter of 2019 and 7.5% versus last year, totaling $8.6 billion in 2020 mainly driven by both higher copper prices and production as well as an increase in byproduct contribution. Along with this revenue increase, we were able to reduce our net cash cost of the year to $0.85, a reduction of 20.5% versus the already exceptional cash cost achieved last year of $1.07. This cash cost is lower [indiscernible], and we report our cost leadership in the industry worldwide.

The aforementioned achievements resulted in an EBITDA margin expansion of over 380 basis points, reaching a margin of 48.5% and totaling $4.15 billion in 2020, a 16.5% increase from 2019 and a 76.7% increase versus [indiscernible]. [ Having ] copper operation performance was already discussed in detail in the call here so -- but let me share some additional details regarding Asarco, where we have achieved significant efficiency.

As anticipated, the net cash postponing this time at $1.99, same, and there was a strong EBITDA generation of $2,012 million in the full year 2020. The investments in the Mining Division during the year totaled $627 million. We continue to focus on the development of our [ low-funding ] growth projects, Pilares, Buenavista Zinc and El Pilar.

Before we mention, I would clarify -- would like to share with you a couple of additional remarks on the core copper market. In the fourth quarter, [indiscernible] copper price increased from the level of $2.60 per ton in the fourth quarter of '19 to $3.25, an increase of 21.7%. As of today, we are seeing prices of $3.50.

We see there are several factors pointing a positive outlook for 2021 and [indiscernible] [ although we are following a couple remarks on the fiscal year ] [indiscernible] [ recovering climate, ] economic activity and the low levels of copper inventories [for the overall company, PEMEX chain-wide and molyb ] worldwide. This closed the copper prices as the lowest since December [ 2014 ].

[indiscernible] [ so you understand in the meantime how ] [indiscernible] various reasons in our short- and long-term [indiscernible]

Can you close your microphones?

[Marlene de la Torre, executive]

Sorry. We keep on having interference in the line. Can you just close all the mics, please?

[Xavier García de Quevedo Topete, executive]

Thank you. In the short term, we are adding more than 200,000 tons of copper with 3 projects in Mexico and 1 in Peru. We expect Pilares to start operation by the first quarter of 2021 and [ know ] Buenavista Zinc and El Pilar to [ begin production ] by 2023.

In the long term, we have some Tier 1 large-scale projects that will add more than 560,000 tons of copper and a milestone to achieve roughly 2 million tons of total copper production over -- towards [ the new service ] this decade. We believe we continue to find -- to have one of the most attractive organic growth by demand in the second [ week ]. During 2020, we demonstrated our ability to maintain production levels with our [ reduced cost ]. For 2021, we're expecting an output of 1.1 million tons of copper with a net cash of [ $1.10 ] per ton.

If you happen to have any followed-up questions, we will be pleased to have these in the Q&A session.

I would like to close by thanking our [indiscernible] in the communities where we operate and our -- and all our people [indiscernible]. Now I will let Isaac to talk about our Transportation Division. Thank you. Isaac, are you on the line?

[Isaac Franklin Unkind;General Director of Administration, executive]

Yes. Thank you, Xavier. I hope that everybody is staying safe as we continue to navigate through these unprecedented times. I would like to start by emphasizing that GMXT continues to do extraordinary efforts to safeguard operations while taking care of our employees' health.

Starting on Slide 19. I would like to talk about our financial highlights for the fourth quarter and the year. As we face challenge throughout the year, our main financial indicators, double declines for 2020, but some of them showed sign of recovery towards the second half of the year. Our sales increased 0.7% quarter-over-quarter, while our 2020 sales totaled over $2.16 billion, a 12.7% decrease versus 2019. This was mainly driven by lower revenues from the automotive, industrial and intermodal segments.

Along these lines, our transportation volume increased 1.1% in net tons-kilometer quarter-over-quarter but ended the year with a 4% decrease versus 2019. So in this quarter, volumes were down 3.2% year-over-year. The drop in volume was mainly due to agricultural segments given that the corn and soybean movement happened mostly during the first 9 months of the year, resulting in lower volumes for the fourth quarter of 2020 as well as an increase in the demand for soybean in Asia, which led to a lack of railcars for Mexico.

Our EBITDA totaled $944 million, 13.9% below the numbers seen during 2019 and a 15.9% decrease versus same quarter last year. For the year, this was mainly due to a reduction in cargo in some segments as to more than $23.5 million in donation and nonrecurring costs to implement protocols to face the pandemic.

For the fourth quarter 2020, we had approximately a $10 million decrease in revenues from freight that reflects directly in our EBITDA and nonrecurring increase in sales of $11 million during the fourth quarter of 2019. Our net income totaled $275 million, a reduction of 12.1% versus 2019.

As we continue to Slide #20, you can see some additional fourth quarter 2020 highlights. GMXT continues to improve its market share position in relevant markets. Also, our operating costs saw a 7.1% decrease in Mexican pesos when compared to the same quarter of 2019.

On another topic, our Board has approved a $0.30 per share dividend and 65.17 million shares were repurchased during 2020 at an average price per share of MXN 25.16.

Continuing with the main variation of our revenue on Slide 21. We can see that 3 of our segments presented high revenue growth, including the metal segment, which inaugurates routes of raw material, increasing our market share. The Chemicals segment continued to upward trend due to an increase in cross-border volumes impacted by higher demand as a result of the COVID-19 pandemic. The last segment with high growth was the automotive segment, which was -- which, as expected, experienced a catch-up effect coming out of COVID-19.

We have 3 segments with negative impact including intermodal, energy and agricultural segment. The last one shows a 14% decline, as I explained before, due to a reduced inventory replenishment of corn and soybean resulting from higher prices. The energy segment was affected by the shifting international price of coal, shifting local consumption to local producer, while the intermodal segment showed positive recovery in volumes during the fourth quarter in the U.S., while the trend is heading in the right direction in Mexico but have not fully recovered.

On Slide 22, we show our operating metrics for the fourth quarters since 2018. We can see that we continue to improve our operating metrics thanks to our constant efforts and action to optimize our master service plan. Our average train speed for the fourth quarter of the year increased 13.2%, setting a 38.10 kilometers per hour, while our dwell time decreased 24.8% leading to a 14.9% increase in car velocity compared to the fourth quarter of 2018. We are now running 1.9 kilometer trains, and we have increased gross ton per train more than 8%, which has natural increase in cruise times. If you have any follow-up questions about these operating metrics, we can address them during the Q&A session since we have already given our detailed information during our call a couple of days ago.

Our investment plan for 2021 is shown on Slide 23, totaling $358 million: $260.7 million for maintenance, almost $70 million for growth projects and $28 million for efficiency programs. As for our outlook for 2021, we are expecting a double-digit growth year-over-year, propelled by a recovery from COVID-19 and new traffics.

This concludes our general overview of the Transportation Division. Thank you, everyone, for joining. I hope you stay safe. I will now let Francisco Zinser comment on the Infrastructure Division.

[Francisco Gonzalez, executive]

Thank you very much, Isaac, and good morning, everyone. Starting with the financial highlights of the Infrastructure Division on Slide #26. Revenues totaled $528 million for the year, a 9% increase compared to the -- decrease, excuse me, compared to the previous year but showing a steady recovery of 5.3% quarter-over-quarter. Our EBITDA totaled $267 million for 2020 translating in only a 2% decrease versus 2019. And our EBITDA margin showed an improvement of 360 basis points compared to last year, reaching a margin of 50.6%. Our net income totaled $41 million during the year, an 8.7% decrease year-over-year.

Moving on to Slide #27 and commenting on our energy generation division. Sales totaled $230 million and EBITDA $212 million, an increase of 1.9% and 3.7%, respectively, mainly driven by an up stretch in the price of the gas molecule and a 1% increase in generation, which totaled 3,656 gigawatt hours during 2020.

Our oil drilling division ended the quarter with 6 oil rigs in operation and an average efficiency of 99.5%, an all-time high. Sales for the year went down 1.3% versus 2019, reaching $172 million, while EBITDA totaled $85 million, a 3.8% decrease versus the previous year. This was due to adjustments on daily rates, extraordinary expenses related to COVID-19 and scheduled maintenance in the Tabasco and Campeche platforms.

Cumulative revenues on our highway division totaled $34 million, a decrease of 20.7% versus 2019. The EBITDA suffered the same decrease and ended the year in $22 million as the traffic in our highways suffered especially in the second and third quarter as a reduction of numbers because of the pandemic. The 23% reduction seen during the year again reflects the mobility restrictions, and we hope it recovers as the pandemic starts ending.

We recorded historical figures in our Engineering Services Company, with increases of 40% in sales and 127% in EBITDA versus the same period of last year. This was achieved mostly through a greater number of projects contracted with different clients in various industries.

Moving on to our projects. Our Fenicias wind farm, which is planned to start operations during this quarter of 2021, late March, reached an 83% completion rate with an investment up-to-date of $177 million. Our 3 terminals located in Monterrey, Aguascalientes and Guadalajara continue to see progress as we expected commercial operation to kick off by the second quarter of 2022 in the case of Monterrey and Aguascalientes and by the fourth quarter of the same year for Guadalajara.

Thank you very much, and I will now let Marlene proceed with her closing remarks.

[Marlene de la Torre, executive]

Thank you, Xavier, Isaac and Francisco, for your comments. Before closing, I would like to thank everybody for your time and attention and reiterate our commitment with our collaborators and community and all the people working at Grupo México as we continue to navigate the pandemic. Again, our thanks goes to everybody around the world who is in the frontlines helping [ outside the hands of time ]. Please stay safe. Now we will open the line for Q&A. Thank you.

[Operator]

[Operator Instructions] Our first question comes from the line of Timna Tanners from Bank of America.

[Timna Tanners, analyst]

I just wanted to try to summarize, if I could, some of the outlook comments. And I apologize because it was hard to hear the Mining Division commentary. So if you wouldn't mind, my understanding is the other segments are really looking at COVID-19-related recoveries, which I think makes a lot of sense. But in the Mining Division, can you help us understand what's driving the higher cost at a high level? And is it somewhat just the change from the very low levels from not getting some maintenance in 2020 due to COVID? What's driving cost increases? And what other volume expectations, if you can go through that in a bit more detail?

[Marlene de la Torre, executive]

Sure, Timna. Sorry, your line was a little bit breaking. So you're referring to the Mining Division and going further into our forecast. The question was why we will have cost increases and what will be our production going forward. Is that correct, just to make sure?

[Timna Tanners, analyst]

Yes. Just overall, could review a bit your outlook because I understood the non-Mining Divisions, but it was hard to make the outlook comments on the Mining Division. So if you could give some high level where you're seeing the cost pressures and what could be the variables that affect that into the year. And then remind us what we should expect and why on the volume side, please.

[Marlene de la Torre, executive]

[indiscernible]

[Xavier García de Quevedo Topete, executive]

We expected to have an additional cost in [ 2020 ] because we will have to move more waste material and [ reaching ]. Mainly this is the point. Another important -- very important, it depends on the cost of power, especially in Mexico and the cost of diesel. These are the main factors that would really increase the price. However, we will increase -- [ because of the ] strong copper price, we are planning to increase our EBITDA to close to $5.9 million.

[Marlene de la Torre, executive]

In terms of volume?

[Xavier García de Quevedo Topete, executive]

In terms of volumes, we are reducing our volume. One, we have -- I mentioned [ 167,000 ] tons because low grades mainly in the mine, in the mine of Toquepala and Buenavista. But -- and in 2022, we will continue with a low grade, and we'll have a high -- a good recovery in the year 2023, considering for this year that we will have the full production in [indiscernible]. For 2024, we will have already the El Pilar and Buenavista Zinc with some copper production.

[Timna Tanners, analyst]

Got it. And if you wouldn't mind, my second question is just relative to prior presentations. In your last one, you did change your CapEx and volume guidance. So if you could review for us how you're looking at CapEx going forward and help us understand what drove the changes from the past presentations.

[Xavier García de Quevedo Topete, executive]

Okay. Yes, sure. In CapEx for 2021, we are planning to invest $1.401 billion, $593 million in Peru and $110 million in Asarco. Also, we will start investing in Spain and the balance in Mexico, $965 million. For the next year, we will continue with our projects, investing over, an example, in 2023, [ $1.3 million ] as well in 2024, '25. And then we really start with this project [indiscernible] that is Michiquillay, Los Chanchas, Asarco, and of course, finishing Tia Maria. We're expecting in the year 2026 to have $3 billion invested.

[Marlene de la Torre, executive]

So you can take into consideration, Timna, but we've had to postpone some of the CapEx we were supposed to reinvest through the year because of COVID, and we want -- we didn't want people going in and out of our mines, and then we want to isolate the people that were working at the mines. So we postponed part of the things we were going to do this year into next year. But that doesn't mean we are not going ahead with the project.

[Xavier García de Quevedo Topete, executive]

[indiscernible] Buenavista Zinc project, we stopped the construction because we have to give priority really to production, [ better use of ] our people but we will start -- stop -- the project will continue with a little of delay in the purchasing [ and along with COVID ].

[Timna Tanners, analyst]

Okay. Great. So COVID-related mostly for the delays.

[Xavier García de Quevedo Topete, executive]

Exactly. But just for this project, [indiscernible] [ across the land ] which is driven by [ having delays ].

[Operator]

Our next question comes from the line of John Tumazos from John Tumazos.

[John Tumazos, analyst]

Could you talk a little bit about the $4.1 billion of cash balances? They're unusually large and wonderful. And could you explain, secondly, the 9% decline in the infrastructure revenues a little more where the toll highway's the only segment that fell, offsetting the big gain in Engineering?

[Xavier García de Quevedo Topete, executive]

Thank you. Could you, please, Marlene?

[Marlene de la Torre, executive]

Let us give you a little bit more into the cash balances for this year. As you could see, we have higher copper prices when compared to 2019, so for the year, we averaged at [ $3.80 ]. And by the end of the year, we averaged $3.27, so for the fourth quarter, and that helped in addition to very good results and a very low cash flow. We also had a higher -- well, not higher but good results from our Transportation Division in terms of cash generation and from our Infrastructure Division.

Going into the next year, if we see our numbers -- and this, obviously, it depends on copper prices. So let's assume, copper prices are $3.25 or $3.50. Then we would be looking at an operating cash flow during 2021 for Grupo México of above $4 billion. And if we see copper price of $3.50, we're talking of above $4.4 billion. So this is because of copper prices, other petrol prices and the generation from all of the divisions.

[Francisco Gonzalez, executive]

And John, this is Francisco Zinser addressing your second question about 9% revenue growth in the Infrastructure division. Highway was not the only division that had a drop in sales because of the pandemic. Our Construction division also had an important impact. As you probably know, construction was not declared an essential service or an essential industry for a few months during last year and that on top of having some projects that were either delayed because of the pandemic or finished from prior years. So we had an important fall in the revenue. However, we were able to really lower our costs very significantly and rapidly in the Construction division. And we only had an impact of 10% in EBITDA. So if you take that into account, that's one of the reasons why you can see our fall in EBITDA is significantly lower than in revenues.

[John Tumazos, analyst]

If I could follow up, please, what do you think the company will do with the $4 billion of current cash plus the new cash to come in?

[Marlene de la Torre, executive]

Well, this year, the $4.1 billion cash we had [ to manage ] the operation. And then what we're doing, we also have this into consideration that we had a lower CapEx that we were planning on having because of the delays due to the pandemic. So for the next year, as Mr. Xavier was commenting, we will have higher CapEx. We will also have, and I can give you the CapEx for the whole company because we will be investing a lot in transportation and infrastructure as well, so I will give you those numbers just in a couple of seconds.

But just to comment on that, you can also see that we increased the dividend. We don't want to hold cash or to have all the cash there because we don't think that will be a good cash flow structure for the company. So we increased our dividend as we generate more cash flow. This is a reflection of all the investments we have been doing over the past years as we mentioned before. And I think as we move forward and if copper prices continue to be good and our results continue to be strong, we should see our dividend dramatically stay at these levels or if you have further cash generation, rates will increase if this continues to be the case.

So we feel very comfortable at this current debt level, and we will be investing. As you know, our #1 priority and focus is our growth and to give value through growth and value for projects. And then everything else, we normally try to do, on a quarterly basis, our dividend or even buyback program, as we did 1.5 years ago.

And I was going to give you the CapEx at the whole Grupo México level because we discussed the CapEx. For the Mining Division, if you just give me 1 second and...

[Xavier García de Quevedo Topete, executive]

[indiscernible]

[Marlene de la Torre, executive]

For Grupo...

[Xavier García de Quevedo Topete, executive]

Yes. $2.1 billion.

[Marlene de la Torre, executive]

$2.1 billion in 2021, almost $2.7 billion in 2022, $2.7 billion in 2023, and almost $2.9 billion in 2024. This comes from a strong investment in Transportation Division of roughly $350 million per year for projects that will improve the operating metrics and will have operating efficiencies. And then in the Infrastructure Division, we are going to be investing this year roughly $230 million. In 2022, $125 million roughly and then '23 and '24, around $45 million, $43.4 million. So that gives you the amount. This year, the total investment was $1.1 billion, so next year, we'll have almost $1 billion of additional CapEx expense.

[Operator]

Our next question comes from the line of Alfonso Salazar from Scotiabank.

[Alfonso Salazar, analyst]

I have 3 short questions. The first one, easiest one, if you can confirm when is the start date for the Buenavista Zinc project. Is it 2023 or it's going to be 3Q 2022? I'm a little bit confused in that one. The second one [indiscernible]...

[Xavier García de Quevedo Topete, executive]

Buenavista Zinc, just for Buenavista. Francisco will give you the numbers.

[Francisco Gonzalez, executive]

If you want to ask the second question while we look for that number.

[Alfonso Salazar, analyst]

Yes. Sure. The second question is if you can give us an update on the national project in Spain. The question [ could you ] discuss what's going on in that project.

And the third one is regarding the [ driver ]. The exclusivity is part of the concession rights. And if I'm not mistaken, in the case of Ferrosur, this exclusivity will end in 1 part in 2 years and the longest part in 7 or 8 years. So the question I have is, if you have to anticipate any impact in the operations whilst this period of exclusivity. So on -- what are we doing to prepare for that, the end of the exclusivity in Ferrosur and in Ferromex later on?

[Xavier García de Quevedo Topete, executive]

[indiscernible]

[Marlene de la Torre, executive]

[indiscernible] Yes, thank you, Alfonso. Regarding Buenavista Zinc...

[Xavier García de Quevedo Topete, executive]

Regarding the Buenavista Zinc, we are expecting to start production in the third quarter of 2023. And El Pilar, as I mentioned, we are planning to start production in the first quarter in '22.

[Marlene de la Torre, executive]

I don't know, Isaac, if you want to comment on the question regarding Ferrosur and the rail concession.

[Isaac Franklin Unkind;General Director of Administration, executive]

Yes. Well, Ferrosur has the same 30-year exclusivity as Ferromex, so it will -- when they -- the exclusivity finish, what we'll see, we'll consolidate the -- all our customers, and we expect to be -- to still be very, very competitive against our competition. So what we are facing is that the -- we'll be competitive. We're investing in some of our customers and transloading facilities and everything in order to be and still be very competitive in our market. So we really don't expect to be losing a lot of market share when this exclusivity ends. We are lowering our cost. We're being very, very aggressive on all the efficiency measures. So we're going to be very, very competitive, but we don't expect to lose market share.

[Alfonso Salazar, analyst]

And in terms of logistics, how -- what are the implications in the logistics? For example, can a new operator enter and use the tracks? And how -- what exactly is going to be changes on your customers there while there is no exclusivity?

[Isaac Franklin Unkind;General Director of Administration, executive]

Yes. When we lose exclusivity, it allows another concessioners to serve some of the markets. So at some point, you will have to pay trackage rights to serve all the customers. And well, at this point, the competitive environment probably is expected to change and have more competition.

But the thing is that, since it's a volume of -- schedule volume in the economy and it's important to have all the critical mass of freight in order to be efficient. So the thing is, for some other concessioners trying to serve and paying the trackage rights, probably won't be competitive since all our efficiencies and all the investments we were doing in our company.

[Alfonso Salazar, analyst]

And the last question regarding Aznalcóllar. Any update on the project, please?

[Xavier García de Quevedo Topete, executive]

Yes. I mean in Aznalcóllar, we are continuing with having water to -- to get the water into the river. [indiscernible] -- correction [indiscernible] who was trying to discharge the water into the [ river platform. The name has changed ]. This is one issue.

The other issue, we are expecting the final service because there is some legal demand, not against us but against the development of Andalucía. We are very close to finish that. So we are expecting this there to continue with the [indiscernible] engineering and in the purchasing of the [ statement ] by the fourth quarter of this year.

[Operator]

Our next question comes from the line of Jens Spiess from Morgan Stanley.

[Jens Spiess, analyst]

Yes. Just a couple of questions here. Could you give us a number of how the cash cost at Asarco were in this quarter? And how do you expect them to evolve in '21? And also, any update on the fees at PEMSA that PEMEX approached you to lower the rate? And also, if you could get any update on the appeal you have on the new transmission rights of your wind farm. And also any update on share buybacks potentially, that would also be great.

[Isaac Franklin Unkind;General Director of Administration, executive]

Jens, in regards to your first question for Asarco, its cash cost for the 2020 year was [ 1 99 3 ]. We're expecting for 2021 to be around the [ 2 15 ] threshold.

[Marlene de la Torre, executive]

Regarding our [indiscernible] PEMSA and PEMEX and just -- regarding the buybacks, as you know, Jens, we normally revise our dividend and our buyback [ cost in ] strategy on a quarterly basis during the Board meeting. As of now, we decided that we'll increase the dividend to maintain similar dividend yield to previous quarters despite of the increase in the share price. So that's why we have the same or similar dividend yield. We will continue to analyze buybacks whenever it makes sense. We are seeing a big discount versus the sum of the parts, when taking into consideration the valuation of our mining assets with transportation and infrastructure that the market is not changing value through transportation and infrastructure. So it makes sense for us to analyze buyback, and we'll continue to do that to whatever it makes sense as well based on the new report.

[Francisco Gonzalez, executive]

And Jens, regarding your 2 questions about the Infrastructure Division. First, in PEMSA -- PEMSA, sorry, the oil drilling company, as you know, it's been a challenging year for all the companies related to oil. We have proved to be a very reliable partner for PEMEX. As we mentioned, we have achieved a historic availability of over 99.5% in all of our platforms. We are one of the only, if not the only company in Mexico who has not had a platform suspended. Many other companies have had to suspend operations with all the implications that, that had.

However, we have had to tighten our tariffs with them, and that's one of the reasons, as we explained, why our EBITDA and -- received a lower percentage of growth. We are working with PEMEX very diligently to continue to be a reliable partner. And we are in talks with them to extend the date of our contract in order to make sure that we continue to have a very high availability with them. We do not expect any further tariff reduction throughout 2021. And basically, that -- I'm not sure if that answers your first question.

[Jens Spiess, analyst]

Yes, it does.

[Francisco Gonzalez, executive]

Okay. Second question, I was not -- I'm not sure I understood you correctly. I think it has to do with the transmission costs of our energy project. Is that correct?

[Jens Spiess, analyst]

Yes, correct. So the fees -- imposed higher transmission fees and do you have an appeal of not having to pay them. Do you have any update on that appeal in the quarter?

[Francisco Gonzalez, executive]

Yes. Yes. So as you know, the regulation change at some point, I think it was mid-2020 when the CRE, the authority that changes this permit, they decided that they will increase wheeling charges or transmission costs for renewable projects in operation from now onwards. What we did at the time is that we filed an injunction. That process is still ongoing. We received a definite suspension of that impact, so as of today, we have not paid any increase in wheeling charges in our projects. And this has been generally the case with everyone who has filed an impairment. So we are confident that this will not go through.

And basically, the status is the same as what we have last quarter. We are expecting a final decision by the judges at some point this year. And again, based on how they have been deciding the suspensions, we think they will not go through, and we'll keep you updated.

[Operator]

At this time, I'm showing no further questions. I would like to turn the call back over to Marlene Finny for closing remarks.

[Marlene de la Torre, executive]

Thank you so much for your time and for joining us. If you have any further question afterwards, let us know. And stay safe. Thank you so much.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.