SCCO 10-K & 10-Q changes, risk factors and insider trading
Southern Copper Corp./ · NYSE · Metal Mining · CIK 1001838 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our operations are subject to risks associated with the management of waste rock and tailings storage facilities, which are subject to significant environmental, safety and engineering challenges that could adversely affect our business.”
Removed heading “Applicable law restricts the payment of dividends from our Minera Mexico subsidiary to us.”
Largest changes
Our financial performance is significantly affected by the market prices of the metals that we produce, particularly the market prices of copper, molybdenum, zinc and silver. Historically, these prices have been subject to wide fluctuations and are affected by numerous and complex factors beyond our control. Market prices are affected by a number of factors, including global economic and political conditions in general, and in particular by: international policies and regulations in the ambits of trade, taxes and tariffs; levels of supply and demand; the availability and cost of substitutes; inventory levels maintained by users; actions of participants in the commodities markets; interest rates; expectations regarding future inflation rates; currency exchange rates and changes in technology. In addition, the market prices of copper and certain other metals have on occasion been subject to rapid short-term changes. At the start of the pandemic in 2020, copper prices were initially negatively impacted by economic uncertainty.see in full comparisonHowever, in mid-2020, copperCopper prices began toriserecover in mid-2020 andreachedcontinuedato strengthen, reaching recordhighslevelsduringin2021.2025. Volatility in global economic growth, particularly in developing countries, has the potential to adversely affect future demand and prices for commodities. Geopolitical uncertainty and protectionism have the potential to inhibit international trade and negatively impact business confidence, which can create price volatility and constraints on our ability to trade in certain markets.
“Our financial performance is significantly affected by the market prices of the metals that we produce, particularly the market prices of copper, molybdenum, zinc and silver. Historically, these prices have been subject to wide fluctuations and are affected by numerous and complex factors beyond our control. Market prices are affected by a number of factors, including global economic and political conditions in general, and in particular by: international policies and regulations in the ambits of trade, taxes and tariffs; levels of supply and demand; the availability and cost of substitutes; …”see in full comparison
“Changes in international trade policies and relationships may materially adversely affect global commodity prices and market conditions and our business, financial condition and results of operations. The adoption and expansion of trade restrictions; tariffs, taxes or other governmental trade measures and uncertainty about such trade measures could reduce the demand for our products, increase our costs, disrupt customer and supplier relationships and harm the U.S. economy, any of which could materially impair our cash flows, competitive position, financial condition and results of operations. …”see in full comparison
“Our operations are subject to risks associated with the management of waste rock and tailings storage facilities, which are subject to significant environmental, safety and engineering challenges that could adversely affect our business.”see in full comparison
Potential developments insee in full comparisontheU.S.United States,policy, regulatory uncertainty,tariffthreatsthreatsor imposition of tariffs and trade tensions may materially affecttheourCompany’sbusiness,businessfinancial condition and results of operations.
“Applicable law restricts the payment of dividends from our Minera Mexico subsidiary to us.”see in full comparison
Full comparison: every changed paragraph (42)
Our financial performance is significantly affected by the market prices of the metals that we produce, particularly the market prices of copper, molybdenum, zinc and silver. Historically, these prices have been subject to wide fluctuations and are affected by numerous and complex factors beyond our control. Market prices are affected by a number of factors, including global economic and political conditions in general, and in particular by: international policies and regulations in the ambits of trade, taxes and tariffs; levels of supply and demand; the availability and cost of substitutes; inventory levels maintained by users; actions of participants in the commodities markets; interest rates; expectations
Our financial performance is significantly affected by the market prices of the metals that we produce, particularly the market prices of copper, molybdenum, zinc and silver. Historically, these prices have been subject to wide fluctuations and are affected by numerous and complex factors beyond our control. Market prices are affected by a number of factors, including global economic and political conditions in general, and in particular by: international policies and regulations in the ambits of trade, taxes and tariffs; levels of supply and demand; the availability and cost of substitutes; inventory levels maintained by users; actions of participants in the commodities markets; interest rates; expectations regarding future inflation rates; currency exchange rates and changes in technology. In addition, the market prices of copper and certain other metals have on occasion been subject to rapid short-term changes. At the start of the pandemic in 2020, copper prices were initially negatively impacted by economic uncertainty. However, in mid-2020, copperCopper prices began to riserecover in mid-2020 and reachedcontinued ato strengthen, reaching record highslevels duringin 2021.2025. Volatility in global economic growth, particularly in developing countries, has the potential to adversely affect future demand and prices for commodities. Geopolitical uncertainty and protectionism have the potential to inhibit international trade and negatively impact business confidence, which can create price volatility and constraints on our ability to trade in certain markets.
In addition to the factors discussed above, copper prices may be affected by demand from China, which is currently the largest consumer of refined copper and concentrate in the world.
the largest consumer of refined copper and concentrate in the world.
Over the last three years, approximately 76.1%75.9% of our revenues havewere comegenerated from the sale of copper; 11.4%10.9% from molybdenum; 4.5%5.7% from silver; and 3.5%3.6% from zinc. Please see the distribution of our revenues per product on Item 8 “Financial Statements and Supplementary Data” Note 1918 “Segment and Related Information—Sales value per segment”.
Through 2024,2025, the Company recognized the expected future tax benefit from deferred tax assets when the tax benefit was considered more likely than not to be realized. A valuation allowance is provided for those deferred tax assets for which management believes that the related benefits will not be realized. Determining the amount of the valuation allowance and assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income and existing tax laws. There can be no assurance that the Company will be able to recognize the expected future benefits of deferred tax assets; this inability could have a material adverse effect on the Company’s financial results.
be able to recognize the expected future benefits of deferred tax assets; this inability could have a material adverse effect on the Company’s financial results.
The waste rock and tailings produced in our mining operations represent our largest volume of waste material. Managing the volume of waste rock and tailings presents significant environmental, safety and engineering challenges and risks. We maintain large tailings impoundments containing sand of ground rock, moistened with water, which are effectively large dams that must be engineered, built and monitored to assure structural stability and avoid leakages or structural collapse. Defects, errors and failures at tailings dams and in other impoundments at any of our mining operations could cause severe property and environmental damage and loss of life. The importance of careful design, management and monitoring of large impoundments was emphasized in recent years by large scale tailings dam failures at unaffiliated mines, which caused extensive property and environmental damage and resulted in the loss of life. For more information regarding our tailing dams, please see Item 2 “Properties—Slope Stability—Tailing Dams.”
During recent years, social and political demands hashave caused violence which could result in damage to, or destruction of, mining operations resulting in monetary losses and possible legal liability.
Our operations are subject to risks associated with the management of waste rock and tailings storage facilities, which are subject to significant environmental, safety and engineering challenges that could adversely affect our business.
The waste rock and tailings produced in our mining operations represent our largest volume of waste material. Managing a high volume of waste rock and tailings presents significant environmental, safety and engineering challenges and risks primarily relating to structural stability, geochemistry, water quality and dust generation. We maintain large tailings impoundments containing ground rock sand that is moistened with water; these areas are effectively large dams that must be engineered, built and monitored to assure structural stability and avoid leakages or structural collapse. Our tailings impoundments must have effective programs to suppress dust emissions to meet regulatory requirements, which vary depending on the jurisdiction, and to limit potential impacts of our operations’ dust emissions on the environment and the adjacent communities. Management of this waste is regulated in the jurisdictions where we operate and our waste management programs are designed to comply with our permits, approved environmental impact studies and applicable laws.
Defects and/or failures of tailings storage facilities, other impoundments or stockpiles at any of our mining operations could cause severe, and in some cases catastrophic, property and environmental damage and loss of life, as well as adversely affect our business and reputation.
The importance of careful design, management and monitoring of large tailings impoundments has grown in recent years due to large-scale tailings dam failures at the mining operations of companies, unaffiliated with the Company, which caused extensive property and environmental damage and, in certain instances, resulted in the loss of life. The failure or loss of integrity of a tailings storage facility or related waste management infrastructure—whether due to operational deficiencies, extreme weather events, seismic activity, regulatory constraints or other factors beyond our control—could result in the release of tailings, process water or other materials, causing environmental harm and potential impacts to surrounding communities, damage to, or destruction of mining operations, resulting in monetary losses and possible legal liability. Such events could materially adversely affect our results of operations and financial condition, disrupt operations, damage our reputation, and subject the Company to regulatory enforcement actions, fines, remediation obligations and claims from governmental authorities or third parties. For more information regarding our tailings dams, please see Item 2 “Properties—Slope Stability—Tailings Dams.”
However, the success of the energy transition is intrinsically linked to copper, our key product, critical for the production of technological solutions to the decrease the global greenhouse gas (GHG) emissions. Given copper's crucial role in electrification and the generation of clean energies, there exists an increasing expectation from both corporate entities and societal stakeholders that copper sourcing should emanate from entities committed to rigorous and responsible production practices.
and societal stakeholders that copper sourcing should emanate from entities committed to rigorous and responsible production practices.
We require substantial amounts of fuel oil, electricity, water and other resources for our operations. Fuel, gas and power costs constituted approximately 26% of our total production costcosts in 2025 and 2024, and 29% in 2023 and 34% in 2022.2023. We rely upon third parties for our supply of the energy resources consumed in our operations. Therefore prices for and availability of energy resources may be subject to change or curtailment due to new laws or regulations; imposition of new taxes or tariffs; interruptions in production by suppliers; and variations in global prices or market conditions, among other factors. Regarding water consumption, although each of our operations currently has sufficient water supplies to cover its operational demands, the loss of some or all water rights for any of our mines or operations, in whole or in part, shortages relative to the water to which we have rights or a lack of additional back-up water supplies at an acceptable cost, or at all, could require us to curtail or shut down mining production and could prevent us from pursuing expansion opportunities, thereby increasing and/or accelerating costs or foregoing profitable operations. In addition, future shortages of critical parts, equipment and skilled labor could adversely affect our operations and development projects.
In 2025, we recorded four fatalities (three employees and one contractor). In 2024, we recorded one fatality of a contractor.contractor Inand in 2023, we recorded five fatalities (two contractors and three employees) and in 2022, four fatalities (two contractors and two employees) were registered.. The amounts paid to the Mexican and Peruvian authorities for reportable accidents had no adverse effects on our results. Under Mexican and Peruvian law penalties and fines for safety violations are generally monetary, but in certain cases may lead to the temporary or permanent shutdown of the affected facility or the suspension or revocation of permits or licenses. Additionally, violations of security and safety laws and regulations at our Peruvian operations can be considered criminal activity and punishable by a sentence of up to 10 years of prison.
Metals exploration is highly speculative in nature because it involves many risks and is frequently unsuccessful. Once mineralization is discovered, it may take a number of years from the initial phases of drilling until production is possible. During such time the economic feasibility of production may change. Substantial expenditures must be made to determine proven and probable mineral reserves, which requires drilling to establish the metallurgical processes that will be needed to extract the metals from the ore and, in the case of new properties, to construct mining and processing facilities. We cannot assure you that our exploration programs will result in the expansion or replacement of current production with new proven and probable mineral reserves.
facilities. We cannot assure you that our exploration programs will result in the expansion or replacement of current production with new proven and probable mineral reserves.
Development projects have no operating history upon which we can base estimates of proven and probable mineral reserves and estimates of future cash operating costs. Estimates are, to a large extent, based upon the interpretation of
Development projects have no operating history upon which we can base estimates of proven and probable mineral reserves and estimates of future cash operating costs. Estimates are, to a large extent, based upon the interpretation of geological data obtained from drill holes and other sampling techniques and on pre-feasibility or feasibility studies that generate estimates of cash operating costs based upon anticipated tonnage and grades of ore to be mined and processed; the configuration of the ore body; expected recovery rates of the mineral from the ore; comparable facility and equipment operating costs; anticipated climatic conditions; and other factors. As a result, actual cash operating costs and economic returns based upon the development of proven and probable mineral reserves may differ significantly from those originally estimated. Moreover, significant decreases in actual or expected prices may mean reserves, once found, will be uneconomical to produce.
In the last several years, we have experienced several strikes and other labor disruptions that have had an adverse impact on our operations and operating results. As of December 31, 2024,2025, unions represented approximately 57%51% of our workforce in Peru and 71% of our workforce in Mexico. Currently, we have labor agreements in effect for our Mexican and Peruvian operations.
Our Taxco mine in Mexico has been on strike since July 2007. It is expected that operations at this mine will remain suspended until these labor issues are resolved. In addition, workers at the San Martin mine were on strike from July 2007 to August 2018. After eleven years of an illegal stoppage, we resumed control of the San Martin mine in August 2018. During this period, the San Martin facilities deteriorateddeteriorated, and we undertook a major renovation to restart operations during the second quarter of 2019 for a total expense of approximately $90.5 million. For additional information, see Item 2, “Properties—Mexican IMMSA Unit—San Martin and Taxco”, and Note 13, “Commitments and Contingencies—Labor matters”, to the consolidated financial statements.
On April 30, 2022, the Peruvian government issued a Ministerial Resolution to set up a three-party-dialogue-table involving community members, government representatives and Company executives to better understand and address the concerns of all parties. Between 2023 and 2024, several meetings were held with community representatives, but no agreements were reached. In January 2025, new community representatives were appointed for two years. These individuals have demonstrated a greater willingness to engage in dialogue and are interested in collaborating with the Company on joint social programs. WeAs anticipateof resumingJanuary 2026, the Company continues to engage in ongoing discussions soonwith tocommunity tackle current issuesrepresentatives, and discusswe ourare proposedimplementing planshigh-impact for investing in social programsprojects that address community needs. TheAdditionally, Companyseveral haspreliminary alsomeetings indicatedwere interestheld into purchasingevaluate reopening negotiations to purchase land nearrequired for the Cuajone operations to create a buffer zone to protect our facilities and future production.operations.
Applicable law restricts the payment of dividends from our Minera Mexico subsidiary to us.
Our subsidiary, Minera Mexico, is a Mexican company and, as such, may pay dividends only out of net income that has been approved by shareholders. Shareholders must also approve the actual dividend payment, after mandatory legal reserves have been created and losses for prior fiscal years have been satisfied. These legal constraints may limit the
ability of Minera Mexico to pay dividends to us, which in turn, may have an impact on our ability to pay stockholder dividends or to service debt.
Potential developments in theU.S. United States,policy, regulatory uncertainty, tariffthreats threatsor imposition of tariffs and trade tensions may materially affect theour Company’sbusiness, businessfinancial condition and results of operations.
Our business operations may be adversely affected by changes in regulatory policies.policy Imposingor the imposition of new tariffs onor importsother trade restrictions, which could significantly affectincrease our cost structures andcosts, pricing strategies.strategies, The uncertainty surrounding potential tariff policies may complicatedisrupt our supply chain planningand complicate international sourcing and internationalcustomer relationships. Uncertainty about future trade relationshipsor whiletariff increasingmeasures costsmay forhinder rawplanning, materialsforce pricing adjustments, and goods.reduce Theseour events,competitiveness. shouldIf such developments occur, they materialize,could mayhave impacta material adverse effect on our profitabilitymargins, results of operations and competitivemarket positioning in the market.position.
Changes in international trade policies and relationships may materially adversely affect global commodity prices and market conditions and our business, financial condition and results of operations. The adoption and expansion of trade restrictions; tariffs, taxes or other governmental trade measures and uncertainty about such trade measures could reduce the demand for our products, increase our costs, disrupt customer and supplier relationships and harm the U.S. economy, any of which could materially impair our cash flows, competitive position, financial condition and results of operations. In July 2025, the U.S. announced trade agreements with the European Union and Japan. On July 30, 2025, the U.S. announced a 50% tariff on semi-finished copper products and copper-intensive derivative products, which became effective on August 1, 2025. Additionally, reciprocal tariffs with China have been suspended until November 10, 2026. On February 20, 2026, the U.S. Supreme Court issued an opinion that limited the President’s authority to impose certain tariffs under emergency powers, which may affect the scope, duration and future use of tariff measures by the U.S. presidential administration. In response, the U.S. presidential administration declared they would impose a 15% global tariff. These developments have produced and may continue to produce market volatility for our principal products and our common stock. We cannot assure investors that future tariff actions, trade tensions, or related regulatory changes will not adversely affect our product prices, stock price, financial condition or results of operations.
Additionally, changes in international trade policies and relationships may affect global commodity prices and market conditions and could have a material adverse impact on our business and results of operations. The adoption and expansion of trade restrictions; trade tensions; or other changes in governmental policies related to taxes, tariffs, trade agreements or any policies, are difficult to predict and could adversely affect the demand for our products, our costs, our customers, our suppliers and the U.S. economy and, consequently, could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations.
DespiteAlthough ourwe maintain risk management efforts and mitigation strategies,programs, we cannot provide any assuranceassure that suchthese measures will besuccessfully successful in addressingprevent or minimizinglessen the impact of political, regulatory, and trade-related risks on our business operations and financial results.
We are a company with substantial assets located outside of the United States. We conduct production operations in Peru and Mexico and exploration activities in these countries as well as in Chile, ArgentinaChile and Ecuador.Argentina. Accordingly, in addition to the usual risks associated with conducting business in foreign countries, our business may be adversely affected by political, economic and social uncertainties in each of these countries. Such risks include possible expropriation or nationalization of property, confiscatory taxes or royalties, possible foreign exchange controls, changes in the national policy toward foreign investors, extreme environmental standards, etc.
We may be adversely affected by natural disasters, pandemics (including the recent coronavirus outbreak) and other catastrophic events, and by man-made problems such as terrorism, which could disrupt our business operations and our business continuity. Furthermore, disaster recovery plans may not adequately protect us from a serious disaster.
Natural disasters, adverse weather conditions, floods, pandemics (including the recent coronavirus outbreak),pandemics, acts of terrorism and other catastrophic or geo-political events may cause damage or disruption to our operations, international commerce and the global economy, which could have an adverse effect on our business, operating results, and financial condition.
Between 2019 and 2023,February 2026, Peru experienced heightened political instability in a context marked by ongoing investigations into allegations of corruption and confrontation on the political front. Significant political turmoil in Peru led to a shutdown of the Peruvian Congress and the removal of threefive Peruvian presidents.
On October 10, 2025, the Peruvian congress invoked its powers under the Constitution to remove the President from office, amidst general concerns about rising threats to personal security throughout the country. The president of the
Peruvian congress immediately assumed the presidency, in the absence of a Vice President. However, on February 17, 2026, the interim president was impeached four months into his term. On February 18, 2026, a new interim president was appointed. This new president leads a transitional government in Peru, which is due to hold general elections in April 2026 amidst political turmoil.
On December 7, 2022, the Peruvian congress invoked its powers under the Constitution to remove the current President from office. The Vice President immediately assumed the presidency, which has led to considerable turmoil, particularly in the south of Peru, where acts of vandalism and violence escalated. Roadblocks were scattered throughout the country, which negatively affected the normal course of business in various regions. Fortunately, our operations were not impacted. This climate of violence gradually subsided during the year and was replaced by a general concern about the economic recession and personal insecurity.
In addition, public safety organizations in Mexico are under significant stress, as a result of drug-related violence. Recently, in February 2026, clashes between organized crime factions and federal authorities in Jalisco and Guanajuato resulted in periods of instability, disrupting commercial and logistics activities in such areas. This situation creates potential risks, particularly for transportation of minerals and finished products, which may affect a small portion of our production. Drug-related violence has had a limited impact on our operations, as it has tended to concentrate outside of our areas of production. The potential risks to our operations might increase if the violence spreads to our areas of production.
Inflation in Peru in 2024,2025, 2024 and 2023 and 2022 was 2.0%,1.5%, 3.2%2.0% and 8.5%,3.2%, respectively. In 2024,2025, the sol depreciatedappreciated 1.5%10.7% against the U.S. dollar, versus a 1.5% depreciation in 2024 and a 2.8% appreciation in 2023 and a 4.5% appreciation in 2022.2023. Although the Peruvian government’s economic policy reduced inflation and the economy has experienced significant growth in the past decade, we cannot assure you that inflation will not increase from its current level or that such economic growth will continue in the future at similar rates or at all. Additionally, a global financial economic crisis could negatively affect the Peruvian economy.
Although all of our Mexican operations’ sales of metals are priced and invoiced in U.S. dollars, a substantial portion of its costs are denominated in pesos. Accordingly, when inflation in Mexico increases without a corresponding depreciation of the peso, the net income generated by our Mexican operations is adversely affected. Inflation in Mexico was 3.7% in 2025, 4.2% in 2024,2024 and 4.7% in 2023 and 7.8% in 2022.2023. The peso depreciatedappreciated 20.0%11.4% against the U.S. dollar in 2024,2025, versus a 20.0% depreciation in 2024 and a 12.7% appreciation in 2023 and a 5.9% appreciation in 2022.2023. The peso has been subject in the past to significant volatility, which may not have been proportionate to the inflation rate and may not be proportionate to the inflation rate in the future.
Management's Discussion & Analysis (MD&A)
Largest changes
“transition and growth in artificial intelligence technologies. This positive outlook for demand may be impacted by U.S. import duties on China and other countries and by slow growth or even a recession in several European countries and emerging markets.”see in full comparison
“During our marketing effort, we held meetings with 85 global and local fixed income investors and received purchase orders from high quality institutional investors. We received orders for $3.5 billion, a demand of 3.5 times the offering. Proceeds will provide the Company with additional liquidity to finance our Mexican capital expenditures and Minera Mexico’s general corporate purposes.”see in full comparison
“In relation to economic development, we trained 1,219 people in mining communities in 2025, including 829 people in employment, 390 people in regional vocational and productive skills and 368 local businesses to support the development of small and medium mining suppliers. In addition, we invested $25.2 million in social infrastructure in Mexico and Peru. In Mexico, we finished the Urban Improvement and Safe Pedestrian Crossings in Esqueda, Sonora and began the construction of a sports center in Nacozari, Sonora. …”see in full comparison
see in full comparisonIn our commitment to improving performance on these critical issues, we have embarked on a multi-year process to align our climate change disclosures with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). Since 2020, Grupo Mexico’s Sustainable Development Report has included sections on climate-related risks and opportunities, moreAdditionally, detailed information is provided about newshort-,short,medium-medium and long-term Scope 1 and 2 climate targets, strategy and governance mechanisms, andnewemissions and energy metricsinformedbasedbyon Sustainability Accounting Standards Board (“SASB”) standards.InAdditionally,oursince 2023SustainabilitytheDevelopmentreportReport, we includedincludes Scope 3 targets and preliminary capital allocationfiguresdataonfor decarbonization projects.TheForreportacanmorebedetailedaccessedoverviewatof this progress, see https://www.gmexico.com/en/Pages/development.aspx.WeThearereferencereferringisourprovidedinvestorsfor informational purposes only and is not intended toGrupo Mexico's website for details on these initiatives for informative purposes only. We do not intend for this internet link to becreate an active link orto otherwiseincorporate thecontentswebsite’sof the websitecontent into this Report on Form 10-K.
“We continue to prioritize collaboration with the Peruvian government to close gaps in educational infrastructure through the Works for Taxes investment model. As part of our commitment, we finished the “Colegios de Alto Rendimiento” (“COAR”) or schools of excellence in Tacna and Moquegua and began studies for the COAR Apurímac. In 2025, the Arequipa and Cajamarca COAR projects are also expected to begin. Once these projects are complete, we will have built five Colegios de Alto Rendimiento to benefit 1,500 outstanding students from vulnerable areas. …”see in full comparison
“We also consolidated The Youth Orchestras and Choirs program promoted by SCC, benefiting 1,825 students in 14 communities in Mexico and Peru. In 2024, 65 artistic performances were held, including a concert at the Palacio de Minería featuring the Mining Symphony Orchestra and 68 student performers. Additionally, in collaboration with the Sonoran Institute of Culture, the Museum of Art of Sonora (MUSAS) is hosting the photographic exhibition Learning to Look. …”see in full comparison
Full comparison: every changed paragraph (153)
Based on current supply and demand dynamics, we are currently estimating a copper market deficit of 320,000 tonnes for 2026. Copper inventories worldwide were at the end of January 2026 at 1,054,000 tonnes. We estimate that this inventory currently covers approximately 14 days of global demand.
Regarding by-products, we expect to produce 26,000 tonnes of molybdenum from our mines. We also expect to produce 23.7 million ounces of silver and 165,500 tonnes of zinc in 2026.
For 2025, we expect demand to grow around 4%, driven by economic measures announced in China to promote economic expansion; resilient consumption in the U.S. economy; and new demand on the back of the energy
transition and growth in artificial intelligence technologies. This positive outlook for demand may be impacted by U.S. import duties on China and other countries and by slow growth or even a recession in several European countries and emerging markets.
On the supply side, we expect growth to stand at about 3.0%. As of the beginning of 2025, we expect a market deficit for the year of approximately 250,000 tonnes. We estimate that inventories will cover about one week of world demand. In summary, even though we see some risks, particularly for demand in 2025, we are optimistic about the strong support copper market prices will have this year.
For 2025, we believe that prices will hold at the current level of about $21.00 per pound due to a balanced market.
Regarding by products, we expect to produce 171,700 tonnes of zinc from our mines, up 32.0% from 2024 production level. This growth will be driven by the Buenavista Zinc concentrator (+40,700 tonnes). For 2025 and the coming years, we expect to produce over 170,000 tons of zinc per year on average. We expect to produce 26,200 tonnes of molybdenum, which represents a decrease of 9.7% compared to 2024 production levels. For silver, we expect to produce 23.1 million ounces of this metal, an increase of 10.1% compared to last year’s production.
Net sales in 20242025 totaledreached a record high of $11,433.4$13,420.0 million,million reflectingand arepresented 15.5%an increase of $1,986.6 million (+17.4%) compared to 2023.2024. This performance was drivensupported by higher sales volumes of molybdenum (+7.4%), zinc (+19.3%), and silver (+15.3%), together with higher prices for copper (+7.8% -8.7% LME; +14.2% COMEX), silver (+20.7%41.6%), molybdenum (+3.8%) and zinc (+5.0%3.2%),. combinedAdditionally, with increasednet sales volumesin 2025 were positively impacted by upward adjustments of copper (+5.5%), molybdenum (+7.9%), silver (+15.7%), and zinc (+44.6%). The significant rise in zinc sales volumes was primarily attributed to the Buenavista Zinc concentrator, which is operating at full capacity. These gains were partially offset by a decline in molybdenum prices (-10.6%), and by a downward adjustment of $77.6$197.8 million related to provisionally priced sales, reflecting athe varianceincrease in openmetal sales value at the end of 2024.prices.
Costs of sales (exclusive of depreciation, amortization, and depletion) increased by 10.7% in 2025 compared to the figures recorded in 2024, mainly reflecting higher costs related to workers’ participation, purchased copper, repair materials, and energy. These increases were partially mitigated by lower expenses associated with inventory consumption, freight, and reagents.
Costs of sales (exclusive of depreciation, amortization and depletion) increased slightly in 2024 driven primarily by upticks in various areas. The main sources of variation in costs came from higher expenses related to repair materials, labor and fuel costs. These results were partially mitigated by a decrease in copper purchased from third parties, energy costs and inventory variance. In this context, the overall impact on the cost of sales was relatively moderate, as opposing factors largely balanced out fluctuations, resulting in a 3.3% increase compared to the figures recorded in 2023.
In 2024,2025, net income attributable to SCC was $3,376.8 million, reflectingreached a 39.2%record high of $4,334.9 million and represented a 28.4% increase fromcompared theto 2023 net income.2024. This increaseperformance, which was primarilymainly driven by increasedhigher sales volumes and a minor increase inincreased interest income.income, was partially offset by higher cost of sales and income taxes. Net income attributable to SCC in 20232024 was 8.1%15.5% belowabove 2022’s2023’s net income; this was mainly duereflecting to a reduction inhigher sales volumes and aimproved slightmetal increaseprices infor costsmost of sales.our products.
Copper mine production in 2025 decreased 1.8% to stand at 2,108.2 million pounds. This decline was mainly driven by lower production at Toquepala (-0.4%; due to lower ore grades and lower SX-EW output); Cuajone (-1.3%; due to lower ore grades); and Buenavista (-4.3%; due to lower ore grades and recoveries, and the full dedication of the new concentrator to zinc production, partially offset by higher SX-EW output). These decreases were partially offset by higher production at La Caridad (+2.9%; due to higher ore grades and recoveries) and IMMSA (+4.8%; due to higher ore grades and higher mineral volume processed).
Molybdenum production increased 7.4% to 68.7 million pounds in 2025, compared to 63.9 million pounds in 2024. This increase was mainly driven by higher production at Toquepala (+18.2%) and La Caridad (+7.4%). These gains were partially offset by lower production at Buenavista (-2.8%) and Cuajone (-0.7%).
Silver mine production increased 15.3% in 2025, primarily due to higher production at our Buenavista (+30.7%), La Caridad (+21.9%), IMMSA (+11.4%) and Cuajone (+4.2%) operations. This growth was slightly offset by a decline in production at our Toquepala mine (-3.1%).
Zinc production increased by 36.1% in 2025, mainly reflecting higher output at our Buenavista Zinc concentrator (+81.6%). This increase was supported by full-capacity operations at this facility, which produced 257.4 million pounds in 2025.
Copper mine production in 2024 increased 6.9% to 2,147.0 million pounds. This increase was primarily driven by an uptick in production levels at all our operations: Toquepala (+10.8%; higher ore grades and recoveries), Cuajone (+10.5%; higher volume of mineral processed), La Caridad (+5.6%; higher ore grades), Buenavista (+4.0%; higher ore grades and the contribution of Buenavista Zinc operations) and IMMSA (+2.0%; higher ore grades).
Molybdenum production increased 8.1% to 63.9 million pounds, up from 59.2 million pounds in 2023. This increase was due to higher production at all our mines, with the exception of La Caridad mine (-14.5%), where grades and recoveries dropped.
Mined zinc production rose 98.5% in 2024, mainly driven by increases in production at our Buenavista Zinc concentrator. This facility started operating at full capacity in the second quarter of 2024 and contributed around 141.8 million pounds of zinc over the year.
Mined silver production for 2024 rose 14.0% compared to the previous year. This growth was fueled by higher production across all our operations, driven primarily by improved ore grades, growth in recoveries, and a larger volume of processed mineral.
For the year 2025, the operating cash cost per pound before by-product revenues increased from $2.13 to $2.17, mainly due to the unit cost effect of a slight decrease in copper production (-1.1%) and higher production costs (+3.2%); this was partially offset by lower treatment and refining charges due to market conditions. Additionally, a 27.2% increase in by-product revenues per pound helped reduce the operating cash cost per pound net of by-product revenues from $0.89 to $0.58. This 34.0% reduction was primarily supported by higher sales volumes of molybdenum, silver and zinc.
For the year 2024, our per pound operating cash cost before by-product revenues was $2.13, reflecting a 2.5% decrease compared to 2023. This improvement was primarily due to the unit cost effect of a 6.3% increase in production and a reduction of 2.2 cents in treatment and refining charges.
Operating cash cost per pound net of by-product revenues fell 13.9%, from $1.03 in 2023 to $0.89 in 2024. This reduction was mainly driven by a 4-cent decrease in production costs and by a unit cost effect that was generated by both an increase in pounds of copper produced and a 9-cent increase in by-product revenue credits.
We are subject to market risks arising from the volatility of copper and other metals prices. For instance, during the period from January 20152016 through December 2024,2025, the London Metal Exchange (LME) copper settlement price varied from a low of $1.96 per pound in 2016 to a record high of $4.92$5.68 per pound in 2024,2025. and theThe Metals Week Molybdenum Dealer Oxide weekly average priceprice, in turn, ranged from a low of $4.30$5.10 per pound in 20152016 to a high of $38.50 per pound in 2023. Metal prices historically have been subject to wide fluctuations and are affected by numerous factors beyond our control, as described further in Item 1A Risk Factors. These factors, which affect each commodity to varying degrees, include international economic and political conditions, levels of supply and demand, the availability and cost of substitutes, inventory levels maintained by producers and others and, to a lesser degree, inventory carrying costs and currency exchange rates. In addition, the market prices of certain metals have on occasion been subject to rapid short-term changes due to economic concerns and financial investments.
Our investments in Peruvian projects that are being built or for which basic or detail engineering is being conducted could surpass $10.3 billion in the next decade.
The Company’s investment program is underpinned by openness of the Peruvian government and institutions to private investment; strong local community support; and respect for the rule of law. With the support and assistance of Peruvian authorities, the Company is moving forward to secure the administrative permits and licenses that are required prior to investment. We believe the projects’ construction and subsequent operating phases will generate new poles of development; create significant job opportunities; and drive growth in tax revenues at both national and regional levels.
Tia Maria - Arequipa: This greenfield project, located in Arequipa, Peru, will use state of the art SX-EW technology with the highest international environmental standards with a capacity of 120,000 tonnes of SX- EW copper cathodes per year.
Tia Maria will generate significant revenues for the Arequipa region from day one of its operations. At current copper prices, we expect to export $20.2 billion and contribute $4.6 billion in taxes and royalties during the first 20 years of operation. The project budget has been set at $1,805 million.
Project update: As of December 31, 2025, the Company had committed $790 million to different project activities. Large-scale earthmoving works have mobilized 1.7 million tonnes of material from the La Tapada deposit. Purchase orders to acquire metallic structures for secondary and tertiary crushing have been issued for the dry area. At the SX-EW process level, state-of-the-art technology has been selected for our main equipment. Access roads and platforms, as well as the temporary contractor camp have been completed.
Regarding energy supply, all earthworks for the electrical main substation have been completed; foundation works are currently underway, and the transmission line is being built. Next efforts will focus on developing the main and secondary components of the project’s dry and wet areas and setting up a temporary camp.
At the end of 2025, progress at Tia Maria stood at 24% and 3,589 new jobs had been generated; 978 of these positions were filled with local applicants. To the fullest extent possible, we intend to fill the 5,000 jobs estimated to be required during Tia Maria´s construction phase prioritizing workers from the Islay province. In 2027, when we start operations, the project will generate 764 direct jobs and 5,900 indirect jobs.
Minera Mexico is planning to invest more than $600 million in 2025 at its open pit, metallurgical facilities and underground mines. 50% of this investment will be used to guarantee the viability of long-term operations by actively modernizing and updating assets. About 43% of the investment will target improvements in water usage and tailings management to ensure safety and efficiency at our operations. The remaining funds will be invested in efforts to bolster optimization and growth.
El Pilar - Sonora: This low-capital intensity copper greenfield project is strategically located in Sonora, Mexico, approximately 45 kilometers from our Buenavista mine. Its copper oxide mineralization contains estimated proven and probable reserves of 317 million tonnes of ore with an average copper grade of 0.249%. We anticipate that El Pilar will
operate as a conventional open-pit mine with an annual production capacity of 36,000 tonnes of copper cathodes. This operation will use highly cost efficient and environmentally friendly SX-EW technology. The budget for El Pilar is $310 million.
The results from experimental pads in the leaching process have confirmed adequate levels of copper recovery and we are evaluating different options for optimization. The Company is engaging in project development and on-site environmental activities. Mine life is estimated at 13 years.
The CompanySCC has several projects in its Mexican pipeline that may boost organic growth if they are found to be of value for both stakeholders and the communities in which we operate. These projects are Angangueo, Chalchihuites and the Empalme Smelter, which could bolster our position as a fully integrated copper producer. We are having ongoing discussions with the current administration to continue rolling out SCC’s Mexican investments for $10.2 billion.
El Pilar - Sonora: This low-capital intensity copper greenfield project is strategically located in Sonora, Mexico, approximately 45 kilometers from our Buenavista mine. Its copper oxide mineralization contains estimated proven and probable reserves of 317 million tonnes of ore with an average copper grade of 0.249%. We anticipate that El Pilar will operate as a conventional open-pit mine with an annual production capacity of 36,000 tonnes of copper cathodes. This operation will use highly cost efficient and environmentally friendly SX-EW technology.
Tia Maria - Arequipa: This greenfield project, located in Arequipa, Peru, will use state of the art SX-EW technology with the highest international environmental standards with a capacity of 120,000 tons of SX- EW copper cathodes per year.
Tia Maria will generate significant revenues for the Arequipa region from day one of its operations. At current copper prices, we expect to export $17.5 billion and contribute $3.4 billion in taxes and royalties during the first 20 years of operation. After a thoughtful and detailed review, the new project budget has been set at $1,802 million.
Project update: As of December 31, 2024, the Company had generated more than 614 jobs, 492 of which were filled with local applicants. To the fullest extent possible, we intend to fill the 3,500 jobs estimated to be required during Tia Maria’s construction phase prioritizing workers from the Islay province. When we start operations in 2027, the project will generate 764 direct jobs and 4,800 indirect jobs.
This year, we expect construction to begin. Work will initiate with construction of roads and access points to the project as well as railways; installation of a temporary camp; massive earthmoving efforts; and mine clearing activities. We have made progress in our efforts to delimit the property and have installed a live fence covering 59 kilometers to date.
Quebrada Honda dam expansion – Tacna: This project aims to enlarge the main and lateral dams in Quebrada Honda and includes the relocation and repowering of some facilities due to dam growth and development of other facilities for water recovery, among other factors. As of December 31, 2023, drainage works, removal of Eolic material for the main and lateral dam, and complementary operational work had been completed. We have also installed two cyclone nests for the main dam, which are currently operating. Additionally, in 2024, equipment purchased to haul tailings arrived on site for operational use. To align with the increase in size of the tailings dam, we intend to build new administrative facilities down the line. As of December 31, 2024, this project had been completed with an investment of $154.3 million, out of a total budget of $165.0 million.
We have a number of other projects that we may develop in the future. We continuously evaluate new projects on the basis of our long-term corporate objectives, strategic and operating fit, expected return on investment, required investment, estimated production, estimated cash-flow profile, social and environmental considerations, among other factors. All capital spending plans will continue to be reviewed and adjusted to respond to changes in the economy and market conditions.
investment, estimated production, estimated cash-flow profile, social and environmental considerations, among other factors. All capital spending plans will continue to be reviewed and adjusted to respond to changes in the economy and market conditions.
El Arco - Baja California: This is a world-class copper deposit located in the central part of the Baja California peninsula with ore reserves of over 1,230 million tonnes with an average ore grade of 0.40% and 141 million tonnes of leach material with an average ore grade of 0.27%. The project includes an open-pit mine with a combined 120 ktpd concentrator and 28 ktpa SX-EW operations.
Project update: The Company has completed the environmental baseline study for the mine. Currently, more detailed engineering is being conducted for the concentrator, SX-EW plant as well as for water desalination, logistics infrastructure and power delivery.
Los Chancas— - Apurimac: This greenfield project, located in Apurimac, Peru, is a copper and molybdenum porphyry deposit. Current estimates of indicated copper mineral resources are 98 million tonstonnes of oxides with a copper content of 0.45% and 52 million tonstonnes of sulfides with a copper content of 0.59%. The Los Chancas project envisions an open-pit mine with a combined operation of concentrator and SX-EW processes that are expected to produce 130,000 tonstonnes of copper and 7,500 tonstonnes of molybdenum annually. The estimated capital investment is $2,600 million and operationsthe areproject is expected to begin operating in 2031. We continue to engage in social and environmental improvements for the local communities and are working on the project’s environmental impact assessment.
Project update: As of December 31, 2025, we had continued to implement environmental and social programs in the communities of Tapayrihua and Tiaparo, which are located within the direct area of influence of the Los Chancas Mining Project. Despite these efforts, the presence of illegal miners within the project area has prevented the project from advancing. In this context, the Company continues to take actions with the relevant authorities to regain control of the project area.
Project update: In coordination with the Peruvian authorities, efforts continue to eradicate illegal mining activities. Once this process has concluded, we will resume our environmental impact study and begin hydrogeological and geotechnical studies. We will also begin a resource verification drilling campaign of a 40,000-meter in-fill to gather additional information on the geological characteristics of the Los Chancas deposit.
Michiquillay Project— - Cajamarca: In June 2018, Southern Copper signed a contract for the acquisition of the Michiquillay project in Cajamarca, Peru. Michiquillay is a world-classworld greenfieldclass mining project with inferred mineral resources of 2,288 million tonstonnes and an estimated copper grade of 0.43%. When developed, we expect Michiquillay to produce 225,000 tonstonnes of copper per year (along with by-products of molybdenum, gold and silver) at a competitive cash-cost for an initial mine life of more than 25 years. We estimate an investment of approximately $2.5 billion will be required and expect production start-up by 2032. Michiquillay will become one of Peru´s largest copper mines and will create significant business opportunities in the Cajamarca region; generate new jobs for the local communities; and contribute taxes and royalties to the local, regional and national governments
We estimate an investment of approximately $2.5 billion will be required and expect production start-up by 2032. Michiquillay will become one of Peru´s largest copper mines and will create significant business opportunities in the Cajamarca region; generate new jobs for the local communities; and contribute with taxes and royalties to the local, regional and national governments.
Project update: The comprehensive review of the geological information used to estimate the project’s mineral resources has been duly audited in accordance with the SEC’s mining disclosure standards under Regulation S-K 1300. Subsequently, the Company intends to use this information to estimate mineral reserves and develop the corresponding mine plan.
El Arco - Baja California: This is a world-class copper deposit located in the central part of the Baja California peninsula with sulfide ore reserves of over 1,230 million tonnes with an average ore grade of 0.40% and 141 million tonnes of leach material with an average ore grade of 0.27%. The project includes an open-pit mine with a combined 120 ktpd concentrator and 28 ktpy SX-EW operations.
Detailed engineering is still underway for the concentrator, SX-EW plant, water desalination, logistics infrastructure and power delivery.
Project update: As of December 31, 2024, total progress for exploration on the project was 35%. We had drilled 140,130 meters and obtained 45,762 core samples for chemical analysis. Diamond drilling will continue to provide information to interpret geological sections related to mineralization; conduct geological modeling; and evaluate mineral resources. Geo-metallurgical studies are currently underway, and hydrological and hydrogeological studies have also begun; the geotechnical study is scheduled to begin shortly.
The Company continues working with the Michiquillay and La Encañada communities following the guidelines of the social agreements signed with them.
The aboveaforementioned information is based solely on estimates only.estimates. We cannot make any assurances that we will undertake any of these projects or that the information noted is accurate.
Southern Copper Corporation,Corporation is among the top 10three mining companies with the highest ratings for sustainability in 2024.2025. In the Corporate Sustainability Assessment 2025 (“CSA”) of S&P Global, which publishes an annual performance review of the sustainability practices of 13,000 companies from across the globe, situatedSCC’s Southernsustainability Copperrating Corporationrose four points in 2025, placing the Company among the best-rated companies of 248 companiesleaders in the Mining and Metals sectorsector’s inperformance 2024.rankings, Withwith a scorerating that is more than twice the averageindustry’s of our peers in the mining industry, SCC’s sustainability rating rose 9 points year-over-year.average. This marksis our sixth consecutive year onin the MILA Pacific Alliance category of the Dow Jones’s SustainabilityBest-in-Class Index, and weour havefirst also beenyear included in the Sustainabilityits Emerging Markets Index.category.
Occupational safety and health of our workforce.workforce Operatingare priorities. Strong operating discipline and the strength of ourrobust preventive safety culture led todrove a 28%14% reduction in the number of employee accidents involving lost-time injuries in 2024.2025, Theseoutperforming results compare favorably with thecomparable rates reported by other companies inacross the mining sector.
Tía María: support for agriculture benefits communities. In the area around our Tía María mining project in Arequipa, Peru, we are implementing the “Technology for Agriculture” program with the participation of 28 out of 38 organizations
from the Tambo Valley. With a 14% increase in crop productivity, nearly 95% of the families of the valley have benefited from this program.
What changed in the latest 10-Q
Risk Factors
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Management's Discussion & Analysis (MD&A)
Largest changes
“For the first half of 2026, the operating cash cost per pound before by-product revenues increased from $2.08 in 2Q25 to $2.30 (+10.3%). This increase was primarily attributable to the unit effect of lower copper production (-3.5%) and higher production costs (+7.1%), mainly reflecting increases in fuel, labor, and operating material costs, which were partially offset by lower treatment and refining charges due to market conditions. By-product revenues per pound increased by 68.1%, from $1.38 to $2.33. …”see in full comparison
“SCC students’ performance in science and mathematics makes Sonora proud. Students from the Nacozari and Esqueda schools, both in Sonora, Mexico, performed admirably in national and international competitions, including the Mexican Mathematics Olympics and Infomatrix 2026. These achievements reflect the Company’s commitment to education and the development of STEM skills. The Company currently benefits 3,000 students through the 11 education centers it operates in Mexico and Peru.”see in full comparison
“For 2026, we believe that prices will hold at the current level of about $22.00 per pound due to high demand for stainless steel in China and given its diverse applications in critical industries.”see in full comparison
“Cularjahuira dam improves agricultural results in Candarave. Over the last five years, the Cularjahuira dam, located in Candarave in southern Peru, has transformed the lives of 18% of farmers of the area and their families by providing year-round access to water. According to the Ministry of Agricultural Development, crop yields in the area have risen around 20%. This infrastructure, with a capacity of 2.5 million cubic meters, was built by our company through an alliance with the Peruvian state and local farmers. …”see in full comparison
“Sports drive community integration and wellbeing. To promote integration and wellbeing through sports, our company joined the Global Social Initiative of the Mexican Government. Our efforts, which focus on communities neighboring our operations, have brought together 2,629 participants who are organized into 206 teams of employees and community members, with categories for children and youth. Alongside these initiatives, 580 volunteers worked to create 14 community murals and recondition sports venues, which strengthens harmonious relations, inclusion and the social fabric. …”see in full comparison
“Six months: Mined copper production in the first half of 2026 was 1,016.8 million pounds, which represented a 3.8% decrease compared to the same period in 2025. This decline was primarily attributable to lower production at Toquepala (-11.5%; due to lower ore grades, mineral milled, and SX-EW production) and Cuajone (-9.9%; due to lower ore grades and mineral milled). These declines were partially offset by higher production at our Buenavista (+1.0%; due to increased SX-EW production), La Caridad (+4.7%; …”see in full comparison
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For 2026, we believe that prices will hold at the current level of about $22.00 per pound due to high demand for stainless steel in China and given its diverse applications in critical industries.
Regarding by-products, we expect to produce 166,800163,900 tonnes of zinc in 2026, which is 1%0.9% abovebelow our initial plan. We also expect to produce 27,40027,900 tonnes of molybdenum in 2026, which represents an increase of 5%7% compared to our initial plan. For silver, we expect to comply with our plan to produce 24 million ounces in 2026, an increase of 1.3%this compared our initial goal.metal.
Earnings: The table below highlights key financial and operational data of our Company for the three-month periodand six-month periods ended MarchJune 31,30, 2026 and 2025 (in millions, except copper price, percentages and per share amounts):
Net sales in the firstsecond quarter of 2026 totaled $4,251.4$4,289.0 million, representingwhich represented a 36.2%40.6% increase compared to the same period in 2025. This performanceincrease, which was mainlyprimarily supporteddriven by growth in the sales volumes of silver (+11.6%) and zinc (+16.4%), together with higher prices for copper (LME, +37.5% LME39.8%; COMEX, +26.9%30.5%), COMEXmolybdenum (+43.1%), silver (+157.9%), molybdenum (+24.2%118.6%), and zinc (+14.0%30.8%)., Theseoccurred positive effects were partially offset bydespite a decrease in the sales volumes of copper (-4.9%-1.5%), molybdenum (-13.1%), silver (-8.7%) and molybdenumzinc (-2.8%-8.8%).
Net income attributable to SCC for the firstsecond quarter of 2026 reached $1,576.9$1,670.0 million, representingwhich anrepresented a 71.6% increase of 66.7% compared to the same period in 2025. This performanceincrease was mainlyprimarily supporteddriven by higher net sales (+36.2%40.6%), drivenreflecting mainly by strongerhigher metal prices.prices Theseacross positiveall effectsour wereproducts, partially offset by higherwhile operating costs (+11.6%)increased andat ana increaseconsiderably inlower income taxesrate (+67.2%13.8%).
Net sales for the first half of 2026 increased by 38.4% compared to the same period in 2025. This increase, which was primarily driven by higher sales volumes of silver (+1.1%) and zinc (+2.6%), as well as higher prices for copper (LME, +38.8%; COMEX, +28.6%), molybdenum (+33.7%), silver (+137.9%), and zinc (+22.6%), occurred despite a drop in the sales volumes of copper (-1.5%) and molybdenum (-8.0%).
Net income attributable to SCC for the first half of 2026 increased by 69.2% compared to the same period in 2025. This increase was primarily driven by higher net sales (+38.4%), which reflected higher metal prices across all our products, while operating costs increased at a considerably lower rate (+12.7%).
Production: The table below highlights our mine production data for the three-month periodand six-month periods ended MarchJune 31,30, 2026 and 2025:
The table below highlights our copper mine production data for the three-month periodand six-month periods ended MarchJune 31,30, 2026 and 2025:
FirstSecond quarter: Copper mine production in the firstsecond quarter of 2026 stood at 508.3508.5 million pounds, reflecting a 4.0%3.5% decrease compared to the same period ofin 2025. This decline was mainly attributed to lower production at CuajoneToquepala (-11.9%,-14.7%; which was attributabledue to a decrease in ore grades and mineral milled); Toquepalaand Cuajone (-8.4%-7.8%; due to lower ore grades); IMMSA (-4.6%; due to lower ore grades) and Buenavista (-0.8%; due to lower ore grades and recoveries). These effectsdeclines were slightlypartially offset by higher production at our Buenavista (+2.9%; due to increased SX-EW production), La Caridad (+5.5%3.9%; drivendue byto improved recoveries, higher ore gradesgrades, and increased SX-EW production) and IMMSA operations (+9.9%; due to higher ore grades).
Silver mine production increased 11.1% in the first quarter of 2026 compared to the same period of 2025. This growth was mainly driven by higher production at our La Caridad (+22.1%), Buenavista (+20.7%) and IMMSA (+10.8%) operations. However, this positive performance was slightly offset by lower production at our Cuajone (-7.5%) and Toquepala (-1.6%) mines.
Molybdenum production decreased 2.2%11.0% in the firstsecond quarter of 2026 compared to the same period in 2025. This decline was mainly driven by lower production at all of our operations, Toquepala (-21.9%), Cuajone (-1.4%), Buenavista (-19.2%-12.4%), and IMMSALa Caridad (-0.9%-3.5%) operations,, primarily due to lower ore grades. These decreases were partially offset by higher production at Toquepala (+5.6%) and Cuajone (+1.0%), reflecting improved ore grades and recoveries.
Silver mine production decreased 3.8% in the second quarter of 2026 compared to the same period in 2025. This decline was driven by lower production at all our operations: Toquepala (-12.4%), Cuajone (-7.6%), and Buenavista (-6.8%) mines, primarily due to lower ore grades. These declines were partially offset by higher production at our La Caridad (+3.4%) and IMMSA (+2.6%) operations, driven by improved ore grades and recoveries.
Zinc production increaseddecreased 2.0%14.5% in the firstsecond quarter of 2026 compared to the same period in 2025. This growthdecline was mainly driven by higher production at our IMMSA operations (+9.1%). These increases were partially offset by lower production at our Buenavista Zinczinc concentrator (-1.9%-18.6%) and the IMMSA operations (-5.9%).
Six months: Mined copper production in the first half of 2026 was 1,016.8 million pounds, which represented a 3.8% decrease compared to the same period in 2025. This decline was primarily attributable to lower production at Toquepala (-11.5%; due to lower ore grades, mineral milled, and SX-EW production) and Cuajone (-9.9%; due to lower ore grades and mineral milled). These declines were partially offset by higher production at our Buenavista (+1.0%; due to increased SX-EW production), La Caridad (+4.7%; due to improved recoveries, higher ore grades, and increased SX-EW production), and IMMSA operations (+2.4%; due to higher ore grades).
Molybdenum production decreased by 6.7% in the first half of 2026 compared to the same period in 2025. This decline was primarily attributable to lower production at our Toquepala (-8.5%), Cuajone (-0.2%), Buenavista (-15.8%), and La Caridad (-2.2%) mines, driven by lower ore grades.
Silver mine production increased by 3.3% in the first half of 2026, primarily driven by higher production at our Buenavista (+5.6%), La Caridad (+12.3%), and IMMSA (+6.7%) operations. This increase was partially offset by lower production at our Toquepala (-7.2%) and Cuajone (-7.6%) mines.
Zinc production decreased by 6.9% in the first half of 2026. This decline was primarily attributable to lower production at our Buenavista zinc concentrator (-11.1%), which was partially offset by higher production at our IMMSA (+1.4%) operations.
We define operating cash cost per pound of copper produced before by-product revenues as cost of sales (exclusive of depreciation, amortization and depletion), plus selling, general and administrative charges, treatment and refining charges net of sales premiums; less the cost of purchased concentrates, workers’ participation and other miscellaneous charges, including royalty charges, and the change in inventory levels; divided by total pounds of copper produced by our own mines.
charges, including royalty charges, and the change in inventory levels; divided by total pounds of copper produced by our own mines.
We believe that both of these measures are useful tools for our management and our stakeholders. Our cash costs before by-product revenues allow us to monitor our cost structure and address areas of concern within operating management. The measure operating cash cost per pound of copper produced net of by-product revenues is a common measure used in the copper industry and is a useful management tool that allows us to track our performance and better allocate our resources. This measure is also used in our investment project evaluation process to determine a project’s potential contribution to our operations, its competitiveness and its relative strength in different price scenarios. The expected contribution of by-products is generally a significant factor used by the copper industry to determine whether to move forward or not in the development of a new mining project. As the price of our by-product commodities can have significant fluctuations from period to period, the value of its contribution to our costs can be volatile.
contribution to our operations, its competitiveness and its relative strength in different price scenarios. The expected contribution of by-products is generally a significant factor used by the copper industry to determine whether to move forward or not in the development of a new mining project. As the price of our by-product commodities can have significant fluctuations from period to period, the value of its contribution to our costs can be volatile.
Our operating cash cost per pound of copper produced, before and net of by-product revenues, is presented in the table below for the three-month periodand six-month periods ended MarchJune 31,30, 2026 and 2025:
In the firstsecond quarter of 2026, the operating cash cost per pound before by-product revenues increased from $2.05$2.11 in 1Q252Q25 to $2.31$2.29 (+12.3%8.3%). This increase was mainlyprimarily drivenattributable byto the unit cost effect of a decline inlower copper production (-3.7%-3.4%) and by higher production costs (+11.6%4.7%)., which reflected an increase in costs for fuel and operating material costs that was partially offset by a decrease in treatment and refining charges due to market conditions. By-product revenues per pound roseincreased 87.4%,by 51.4%, from $1.29$1.48 to $2.41.$2.24. As a result, the operating cash cost per pound net of by-product revenues improved significantly,significantly shiftingand decreased from a cost of $0.77$0.63 per pound to a credit of ($0.11)$0.05 per pound, boostedbolstered primarilymainly by growth inhigher by-product revenues from silver, molybdenum,silver and zinc.molybdenum.
For the first half of 2026, the operating cash cost per pound before by-product revenues increased from $2.08 in 2Q25 to $2.30 (+10.3%). This increase was primarily attributable to the unit effect of lower copper production (-3.5%) and higher production costs (+7.1%), mainly reflecting increases in fuel, labor, and operating material costs, which were partially offset by lower treatment and refining charges due to market conditions. By-product revenues per pound increased by 68.1%, from $1.38 to $2.33. As a result, the operating cash cost per pound net of by-product revenues improved significantly and decreased from a cost of $0.70 per pound to a credit of $(0.03) per pound, supported mainly by higher by-product revenues from silver and molybdenum.
We are subject to market risks arising from the volatility of copper and other metal prices. For the remaining ninesix months of 2026, assuming that expected metal production and sales are achieved; tax rates remain unchanged and giving no effects relative to potential cost changes, metal price sensitivity factors would indicate the following change in estimated net income attributable to SCC resulting from metal price changes:
effects relative to potential cost changes, metal price sensitivity factors would indicate the following change in estimated net income attributable to SCC resulting from metal price changes:
Capital Investment Programs: We made capital investments of $441.9$864.7 million in the first quartersix months of 2026, compared to $317.8$553.5 million in the same period of 2025. In general, the capital investments and investment projects described below are intended to increase production, decrease costs or address social and environmental commitments.
Set forth below are descriptions of some of our current expected capital investment programs. We expect to meet the cash requirements for these projects by utilizing cash on hand; internally generated funds and additional external financing.financing, including funding received in June 2026. All capital spending plans will continue to be reviewed and adjusted to respond to changes in the economy and market conditions.
Our investments in Peruvian projects that are being built or for which basic or detail engineering isor environmental studies are being conducted could surpass $10.3 billion in the next decade.
The openness of the Peruvian government and institutions to private investment; the strong support offrom local communities; and respect for the rule of law underpin our aggressive investment program. With the supportbacking and assistance of Peruvian authorities, the Company is moving forward to secure the administrative permits and licenses that are required priorbefore toinitiating investment. The projects’ construction and subsequent operating phases will generate new poles of development; create significant job opportunities; and drive growth in tax revenues at both, national and regional levels.
Tia Maria - Arequipa: This greenfield project, located in Arequipa, Peru, will use state of the art SX-EW technology that meets the highest international environmental standards and has the capacity to produce 120,000 tonnes of SX- EW copper cathodes per year. Operations are expected to begin in the thirdsecond quarterhalf of 2027.
Project update: As of MarchJune 31,30, 2026, the Company has committed $948$1,101 million across various project activities.activities, Large-scaleof earthmovingwhich works$693 million has already been invested. Mass earthworks have moved 7.513.85 million tonstonnes of material from La Tapada deposit. The majority of purchase orders for major equipment have been issued. Regarding the SX-EW process, purchase orders have been placed for key equipment with state-of-the-art technology.
Tapada deposit (a 71% progress). Most purchase orders for the project’s major equipment have been issued. With respect to the leaching process, purchase orders have been placed for key state-of-the-art equipment, and procurement activities for the remaining major equipment continue.
Regarding energythe power supply, foundationelectromechanical works are underway at the main electrical substation,substations asand wellefforts as workcontinue to build the 220kV220-kV transmission line,line. areConcurrently, underway.the In parallel, large-scalemass earthworks forrequired to develop both the grading of the main dry and wet area componentsareas are in their final stage,stage. settingCivil theworks groundworkand forsteel civilstructure constructionassembly have commenced in key areasfacilities, forincluding secondarythe primary, secondary, and tertiary crushing circuits (dry area), solventas extractionwell as the Solvent Extraction (SX), and electrowinningElectrowinning (EW) facilities (wet area), among others.
At the endAs of theJune first quarter of30, 2026, progress atthe Tia Maria stoodproject athad 32.5%,reached 42% completion, and 4,2075,817 new jobs had been created. Of these positions, 1,254 have been generated; 815 of these positions were filled withby local applicants. To the fullestgreatest extent possible, we intend to fill the 5,000approximately 6,000 jobs estimatedexpected to be required during Tia Maria´sthe construction phase prioritizingof Tia Maria by giving priority to workers from the Islay province.
SCC has several projects in its Mexican pipeline that may boost organic growth if they are found to be of value for both stakeholders and the communities in which we operate. These projects are Angangueo, Chalchihuites and the Empalme Smelter, which are expected to bolster our position as a fully integrated copper producer. We are engaged in talks with the current administration to continue rolling out SCC’s Mexican investments for $10.2 billion.
El Pilar - Sonora: This new copper project has obtained the necessary environmental permits and will begin early site preparation works in September 2026 to develop energy lines, water pipelines, roads, workers accommodation, etc. Project construction will commence in the first quarter of 2027, and production is expected to begin in the second half of 2029.
El Pilar - Sonora: This low-capital intensity copper greenfield project is strategically located in Sonora, Mexico, approximately 45 kilometers from ourCananea and Buenavista mine. Its copper oxide mineralization contains estimated proven and probable reserves of 317 million tonnes of ore with an average copper grade of 0.249%.0.249% Weand anticipatea thatlife Elof Pilarmine of 18 years. It will operate as a conventionalan open-pit mine with an annual production capacity of 36,000 tonnes of copper cathodes.cathode, Thisutilizing operation will use highly cost efficientcost-efficient and environmentally friendly SX-EW (Solvent Extraction and Electrowinning) technology. With an investment of $551 million, this project will employ a direct workforce of 450 people during the construction phase and 300 during the operational phase.
Los Chancas - Apurimac: This greenfield project, located in Apurimac, Peru, is a copper and molybdenum porphyry deposit. Current estimates of indicated copper mineral resources are 98 million tonnes of oxides with a copper content of 0.45% and 52 million tonnes of sulfides with a copper content of 0.59%. The Los Chancas project envisions an open-pit mine with a combined operation of concentrator and SX-EW processes that are expected to produce 130,000 tonnes of copper and 7,500 tonnes of molybdenum annually. The estimated capital investment is $2,600 million and the project is expected to begin operating in 2031.
Project update: As of June 30, 2026, the presence of illegal miners within the project area continues despite the State’s on-site enforcement efforts through the Environmental Prosecutor’s Office; this has hindered the project's progress. Meanwhile, community development and environmental management programs remain underway in the communities of Tiaparo and Tapayrihua, both located within our direct area of influence.
copper and 7,500 tonnes of molybdenum annually. The estimated capital investment is $2,600 million and the project is expected to begin operating in 2031.
Project update: As of March 31, 2026, we continue to implement environmental and social programs in the communities of Tapayrihua and Tiaparo, which are located within the direct area of influence of the Los Chancas Mining Project. Despite these efforts, the presence of illegal miners within the project area has prevented the project from further progress. In this context, the Company continues to work with the relevant authorities to regain control of the project area.
Michiquillay Project - Cajamarca: In June 2018, Southern Copper signed a contract for the acquisition of the Michiquillay project in Cajamarca, Peru. Michiquillay is a world-class mining project with inferred mineral resources of 2,288 million tonnes and an estimated copper grade of 0.43%. When developed, we expect Michiquillay to produce 225,000 tonnes of copper per year (along with by-products of molybdenum, gold and silver) for an initial mine life of more than 25 years. We estimate an investment of approximately $2.5 billion will be required and expect production start-up by 2032.
2,288 million tonnes and an estimated copper grade of 0.43%. When developed, we expect Michiquillay to produce 225,000 tonnes of copper per year (along with by-products of molybdenum, gold and silver) for an initial mine life of more than 25 years. We estimate an investment of approximately $2.5 billion will be required and expect production start-up by 2032.
Project update: DevelopmentStudies ofto estimate mineral reserves and develop the geotechnical,mine hydrological,plan, as well as hydrological and hydrogeological studiesassessments, isare ongoing.currently underway. In addition, studiesgeotechnical relatedresearch tois the project’s reserve estimationprogressing and mineentering planits havefinal commenced.phase.
Additional projects in the Mexican pipeline are Angangueo and Chalchihuites (which are part of the Mexican copper circuit) and the Empalme Smelter, which are expected to bolster our position as a fully integrated copper producer.
Detailed engineering is still underway for the concentrator, SX-EW plant, water desalination facilities, logistics infrastructure and power delivery.
Cularjahuira dam improves agricultural results in Candarave. Over the last five years, the Cularjahuira dam, located in Candarave in southern Peru, has transformed the lives of 18% of farmers of the area and their families by providing year-round access to water. According to the Ministry of Agricultural Development, crop yields in the area have risen around 20%. This infrastructure, with a capacity of 2.5 million cubic meters, was built by our company through an alliance with the Peruvian state and local farmers. We continue to work with authorities to build the Callazas and Calientes dams, also located in Candarave. With these additional dams, more than 90% of farmers’ water needs will be covered.
SCC students’ performance in science and mathematics makes Sonora proud. Students from the Nacozari and Esqueda schools, both in Sonora, Mexico, performed admirably in national and international competitions, including the Mexican Mathematics Olympics and Infomatrix 2026. These achievements reflect the Company’s commitment to education and the development of STEM skills. The Company currently benefits 3,000 students through the 11 education centers it operates in Mexico and Peru.
Sports drive community integration and wellbeing. To promote integration and wellbeing through sports, our company joined the Global Social Initiative of the Mexican Government. Our efforts, which focus on communities neighboring our operations, have brought together 2,629 participants who are organized into 206 teams of employees and community members, with categories for children and youth. Alongside these initiatives, 580 volunteers worked to create 14 community murals and recondition sports venues, which strengthens harmonious relations, inclusion and the social fabric. These sports and cultural programs cover approximately 41% of the young population close to our Mexican operations.
For the fifth consecutive year, S&P Global included SCC in its Sustainability Yearbook, which recognizes companies that rank within the top 15% for corporate sustainability performance. In 2025, Southern Copper ranked 4th among 256 companies in the Mining and Metals sector and stood in the top 2% of best performers. Notably, SCC also led the ranking for copper mining companies.
Southern Copper Corporation was recognized by Morningstar Sustainalytics as an ESG Industry Leader. SCC ranked 7th among 215 companies in the metals sector with diversified operations for its performance in environmental, social and governance risk management.
The National Water Authority recognizes our water management efforts in Peru. Southern Peru was awarded the “Certificado Azul” and the distinction of “Water-Responsible and Community-Supportive Company” within the framework of the Water Footprint Reduction and Shared Value program, for the efficient management of water at our
Toquepala operations and for our contributions to strengthening agriculture in Ilabaya and Candarave (Tacna region), including the restoration of 61 hectares of terraces and traditional crops, benefiting 720 farmers.
Certificate for Conservation. Tandem Global, an international organization specialized in conservation and habitat management certification, recognized our Buenavista del Cobre Mine (BVC) for its biodiversity conservation efforts in the Sierra La Elenita ecosystem in Cananea, Sonora.
We drive talent development through our Scholarship program. Each year, more than 9,000 individuals benefit from our educational, sports, and cultural programs in the communities where we operate. In 2026, we awarded scholarships to seven gifted students to continue their professional education at universities in Mexico and the United States, in recognition of their achievements in disciplines such as music, cinema, and sports.
Our discussion and analysis of financial condition and results of operations, as well as quantitative and qualitative disclosures about market risks, are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Preparation of these consolidated financial statements requires our management to make
Our discussion and analysis of financial condition and results of operations, as well as quantitative and qualitative disclosures about market risks, are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Preparation of these consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We make our best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include: ore reserves, revenue recognition, ore stockpiles on leach pads and related amortization, estimated impairment of assets, asset retirement obligations, determination of discount rates related to the financial lease liabilities, classification of operating leases versus finance leases, valuation allowances for deferred tax assets, unrecognized tax benefits and fair value of financial instruments. We base our estimates on historical experience and on various other assumptions that we believe reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
At the Company’s July 2025 Board of Directors meeting, approval was granted by the Board to terminate the Retirement Benefit Plan for Salaried Employees of Southern Copper Corporation (the “Plan”) effective December 1, 2025. The Termination will proceedproceeded as a standard termination. Since November of 2000, the Plan has been frozen and closed to new participants and accruals of benefits. Retirees currentlywho receivingreceived their monthly benefits from The Metropolitan Life Insurance Company (“MetLife”) will continue to receive their monthly benefit from MetLife. Plan participants that will begin drawing their benefits for the first time after October 1, 2025, will receive their benefit from Midland Insurance Company.
SCCO insider buying and selling (Form 4)
Form 4 filings since 2026-04-11: 0 open-market purchases and 14 open-market sales (about $299.3K), across 30 filings with stock transactions. Awards, option exercises, tax withholding and gifts are listed but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-24 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $200.00 | $20.0K |
| 2026-09-08 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $210.00 | $21.0K |
| 2026-09-04 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $200.00 | $20.0K |
| 2026-08-31 | Palomino Bonilla Luis Miguel |
Open-market sale | 0 | — | — |
| 2026-08-31 | Palomino Bonilla Luis Miguel |
Open-market sale | 400 | $217.50 | $87.0K |
| 2026-08-05 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $200.00 | $20.0K |
| 2026-08-05 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $198.30 | $19.8K |
| 2026-08-04 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $195.00 | $19.5K |
| 2026-07-24 | Ariztegui Andreve Vicente |
Grant/award | 400 | — | — |
| 2026-07-24 | Arrigunaga Gomez Del Campo Javier |
Grant/award | 400 | — | — |
| 2026-07-24 | Castillo Sanchez Mejorada Enrique |
Grant/award | 400 | — | — |
| 2026-07-24 | Contreras Lerdo De Tejada Leonardo |
Grant/award | 400 | — | — |
| 2026-07-24 | Velasco German Larrea Mota |
Grant/award | 400 | — | — |
| 2026-07-24 | Palomino Bonilla Luis Miguel |
Grant/award | 400 | — | — |
| 2026-07-24 | Sacristan Carlos Ruiz |
Grant/award | 400 | — | — |
| 2026-07-24 | Valenzuela Rionda Jose Pedro |
Grant/award | 400 | — | — |
| 2026-07-24 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $179.00 | $17.9K |
| 2026-06-05 | Palomino Bonilla Luis Miguel |
Open-market sale | 4 | $181.00 | $724 |
| 2026-06-02 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $200.00 | $20.0K |
| 2026-05-21 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $179.85 | $18.0K |
| 2026-05-21 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $175.80 | $17.6K |
| 2026-05-15 | Palomino Bonilla Luis Miguel |
Open-market sale | 100 | $178.20 | $17.8K |
| 2026-05-04 | Ariztegui Andreve Vicente |
Grant/award | 400 | — | — |
| 2026-05-04 | Arrigunaga Gomez Del Campo Javier |
Grant/award | 400 | — | — |
| 2026-05-04 | Castillo Sanchez Mejorada Enrique |
Grant/award | 400 | — | — |
| 2026-05-04 | Contreras Lerdo De Tejada Leonardo |
Grant/award | 400 | — | — |
| 2026-05-04 | Velasco German Larrea Mota |
Grant/award | 400 | — | — |
| 2026-05-04 | Palomino Bonilla Luis Miguel |
Grant/award | 400 | — | — |
| 2026-05-04 | Sacristan Carlos Ruiz |
Grant/award | 400 | — | — |
| 2026-05-04 | Valenzuela Rionda Jose Pedro |
Grant/award | 400 | — | — |
| 2026-01-29 | Velasco German Larrea Mota |
Grant/award | 200 | — | — |
| 2026-01-29 | Velasco German Larrea Mota |
Grant/award | 400 | — | — |
| 2025-11-03 | Velasco German Larrea Mota |
Grant/award | 400 | — | — |
Well-known investors holding SCCO (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 991,974 | $172.9M | 0.13% | Added 18% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 436,209 | $76.0M | 0.18% | Added 11% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 397,245 | $69.2M | 0.04% | Reduced 49% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 82,959 | $14.3M | 0.0% | Added 30% |
| Millennium Management (Israel Englander) | 2026-06-30 | 73,022 | $12.7M | 0.01% | Reduced 20% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 53,495 | $9.3M | 0.01% | New position |
| Renaissance Technologies | 2026-06-30 | 42,654 | $7.4M | 0.01% | Added 957% |
| D. E. Shaw & Co. | 2026-06-30 | 5,550 | $967.1K | 0.0% | Added 328% |
| Duquesne Family Office (Stanley Druckenmiller) | 2026-06-30 | 123,060 | $21.4K | 0.49% | Added 1% |