10-K: Southern Copper Achieves Record 2025 Sales & Net Income

Southern Copper Corporation reported record net sales and net income in 2025, driven by higher metal prices and increased by-product volumes, while advancing significant capital projects.

Summary

• Net sales reached a record high of $13,420.0 million in 2025, an increase of 17.4% compared to $11,433.4 million in 2024.
• Net income attributable to SCC hit a record $4,334.9 million in 2025, representing a 28.4% increase from $3,376.8 million in 2024.
• Copper mine production decreased by 1.8% to 2,108.2 million pounds in 2025, primarily due to lower ore grades at Toquepala, Cuajone, and Buenavista.
• Molybdenum production increased by 7.4% to 68.7 million pounds in 2025.
• Silver production increased by 15.3% to 24.2 million ounces in 2025.
• Zinc production surged by 36.1% to 390.2 million pounds in 2025, mainly reflecting full-capacity operations at the Buenavista Zinc concentrator.
• Operating cash cost per pound of copper, net of by-product revenues, decreased by 34.0% from $0.89 in 2024 to $0.58 in 2025, largely due to higher by-product revenues.
• Capital investments totaled $1,325.3 million in 2025, a 29.0% increase from $1,027.3 million in 2024.
• The Board of Directors approved a capital investment program of $1,925.5 million for 2026.
• Minera Mexico issued $1.0 billion of fixed-rate senior unsecured notes in February 2025, due in 2032 with a 5.625% annual interest rate.
• The company repaid $500.0 million of 3.875% senior unsecured notes due 2025.
• Cash dividends paid to common stockholders were $2,485.1 million in 2025, up from $1,637.2 million in 2024.
• Stock dividends were approved quarterly since Q2 2024, with $3.50 per share in 2025.
• The Tia Maria project in Peru is 24% complete as of December 31, 2025, having generated 3,589 new jobs.
• The Los Chancas project is experiencing delays due to the presence of illegal miners.
• The Taxco mine has been on strike since July 2007, and the Santa Eulalia mine suspended operations in Q1 2020 due to flooding.
• The company achieved a 14% reduction in employee lost-time injuries in 2025.
• All four open-pit mines in Mexico and Peru earned The Copper Mark accreditation.
• Consumption of renewable electrical energy increased from 23% in 2023 to 36% in 2024, exceeding the 2027 target of 25%.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, with record sales and net income, significant cost reductions, and robust capital investment plans, despite a slight dip in copper production and ongoing project delays. The company's strong ESG performance and strategic growth initiatives are positive indicators.

Positives

• Record net sales of $13,420.0 million in 2025, a 17.4% increase from 2024.
• Record net income attributable to SCC of $4,334.9 million in 2025, a 28.4% increase from 2024.
• Significant increase in by-product sales volumes: molybdenum (+7.4%), zinc (+36.1%), and silver (+15.3%).
• Higher average metal prices for copper (LME +8.7%; COMEX +14.2%), silver (+41.6%), molybdenum (+3.8%), and zinc (+3.2%) in 2025.
• Operating cash cost per pound of copper, net of by-product revenues, decreased by 34.0% to $0.58 in 2025, indicating improved cost efficiency.
• Strong capital investment program with $1,325.3 million invested in 2025 and $1,925.5 million planned for 2026, aimed at increasing production and decreasing costs.
• The Tia Maria project is 24% complete, generating 3,589 new jobs, with a focus on local hiring.
• Achieved a 14% reduction in employee lost-time injuries in 2025, outperforming the mining sector.
• All four open-pit mines in Mexico and Peru received The Copper Mark accreditation for responsible production.
• Increased consumption of renewable electrical energy from 23% in 2023 to 36% in 2024, surpassing the 2027 target.
• Received a climate governance score of 100/100 in S&P Global CSA and 100 in TCFD category in 2025.
• Successful issuance of $1.0 billion fixed-rate senior unsecured notes by Minera Mexico in February 2025.
• Long-term extensions of collective bargaining agreements in Peru (earliest expires 2027, latest 2033) ensuring labor harmony.

Negatives

• Copper mine production decreased by 1.8% in 2025, primarily due to lower ore grades at Toquepala, Cuajone, and Buenavista.
• Smelted copper production decreased by 5.6% and refined copper production decreased by 3.9% in 2025.
• Operating cash cost per pound before by-product revenues increased from $2.13 in 2024 to $2.17 in 2025 due to higher production costs and lower copper production.
• Cash dividend per share decreased from $4.00 in 2023 to $3.10 in 2025.
• The Los Chancas project is experiencing delays due to the presence of illegal miners.
• The Taxco mine in Mexico has been on strike since July 2007, leading to suspended operations and a non-material impairment of assets.
• The Santa Eulalia mine suspended operations in Q1 2020 due to flooding, with its future still under evaluation.
• Ongoing legal proceedings related to the Tia Maria project and the 2014 Buenavista mine spill.
• The Mexican Congress approved a constitutional reform to the Judicial Branch in September 2024, replacing the existing appointment-based system with popular election of judges, with potential unknown impacts.
• Mexican Mining Law changes in May 2023 reduced concession terms, added water use restrictions, required closure guarantees, and mandated a 5% net earnings contribution to indigenous communities for new projects.
• Peru experienced heightened political instability between 2019 and February 2026, including the removal of five presidents and ongoing political turmoil, which could adversely affect business.
• Drug-related violence in Mexico, particularly in Jalisco and Guanajuato in February 2026, could disrupt commercial and logistics activities.
• A valuation allowance of $2,748.1 million on U.S. deferred tax assets, foreign tax credits, and U.S. tax effect of Peruvian deferreds as of December 31, 2025, due to the U.S. corporate tax rate being lower than Mexican and Peruvian rates, making it unlikely to utilize excess foreign tax credits.

Risks

• Financial performance is highly dependent on the volatile market prices of copper, molybdenum, zinc, and silver.
• Inability to maintain required levels of capital investments for exploration, exploitation, and compliance.
• Restrictive covenants in debt agreements may limit business strategies, debt incurrence, asset sales, or dividend payments.
• Future dividend distributions may be lower than in recent years due to capital investment programs and global economic conditions.
• Ability to recognize benefits of deferred tax assets is dependent on future cash flows and taxable income, with a valuation allowance of $2,748.1 million as of December 31, 2025.
• Actual mineral reserves and resources may not conform to current estimates, and long-term viability depends on replenishing reserves.
• Operations are subject to uninsurable risks, including industrial accidents, labor disputes, geological conditions, environmental hazards, and natural phenomena (e.g., seismic activity, wall failures, rock slides, mudslides, flash floods).
• Risks associated with the management of waste rock and tailings storage facilities, including structural stability, geochemistry, water quality, and dust generation, with potential for catastrophic damage and legal liability.
• Changes in demand for products and force majeure events could adversely affect revenues.
• Interruptions of energy supply or increases in energy, fuel, and gas costs, shortages of water supply, critical parts, equipment, and skilled labor may adversely affect operations.
• Compliance with health and safety laws may restrict operations, cause delays, or increase costs, with potential for criminal activity charges in Peru for safety violations.
• Metals exploration efforts are highly speculative and may be unsuccessful, with significant expenditures required before production is possible.
• Challenges relating to slope stability in open-pit mines as they deepen, potentially affecting reserves and financial condition.
• Adverse effects from labor disputes, such as the ongoing strike at the Taxco mine since July 2007 and past disruptions at San Martin.
• Mining operations or metal production projects may be subject to stoppage and additional costs due to community actions and demands for social benefit programs and infrastructure improvements (e.g., Tia Maria, Cuajone).
• Environmental regulation, climate change, and other regulations may increase costs, restrict operations, or result in delays, with potential physical impacts from extreme weather events.
• Expansion programs and new mining/metal production projects may expose the company to new risks, including industrial and environmental accidents.
• Dependence on information technology systems, which are exposed to disruptions, damage, cyber-attacks, and risks associated with implementation and integration of new technologies like AI.
• Global and local market conditions, including high competitiveness in the copper mining industry, may adversely affect profitability.
• Control by Grupo Mexico (88.9% ownership) means their interests may differ from minority stockholders, and related party transactions may present conflicts of interest.
• Unanticipated litigation or negative developments in pending litigation (e.g., Peruvian labor shares, Tia Maria project lawsuits, Buenavista mine spill lawsuits) may adversely affect financial condition.
• Developments in the United States, Europe, and emerging market countries may adversely affect business, market value, and trading price of securities.
• Potential developments in U.S. policy, regulatory uncertainty, threats or imposition of tariffs, and trade tensions may materially affect business (e.g., 50% tariff on semi-finished copper products effective August 1, 2025).
• Political, economic, and social uncertainties in Peru and Mexico, including possible expropriation, confiscatory taxes, foreign exchange controls, and changes in national policy toward foreign investors.
• Compliance with U.S. Foreign Corrupt Practices Act and similar anti-corruption laws in other jurisdictions, with potential for significant fines, litigation, and loss of licenses.
• Natural disasters, pandemics, catastrophic events, and terrorism could disrupt business operations.
• Uncertainty regarding the termination and renewal of mining concessions in Peru and Mexico.
• Peruvian inflation and fluctuations in the sol exchange rate may adversely affect financial condition and results of operations.
• Mexican inflation, restrictive exchange control policies, and fluctuations in the peso exchange rate may adversely affect financial condition and results of operations.
• The Mexican Congress approved a constitutional reform to the Judicial Branch in September 2024, replacing the existing appointment-based system for selecting judges with popular election, with unknown potential impact.
• Changes to Mexican Mining Law in May 2023 (reduced concession terms, new water conditions, closure guarantees, 5% net earnings contribution to indigenous communities for new projects, changes to exploration rules) could affect future business.

Future Outlook

The company estimates a copper market deficit of 320,000 tonnes for 2026, with global inventories covering approximately 14 days of demand. Copper production is expected to be 911,400 tonnes in 2026, mainly due to lower ore grades, with a review underway to improve this forecast. Molybdenum production is projected at 26,000 tonnes, silver at 23.7 million ounces, and zinc at 165,500 tonnes in 2026. Capital investments of $1,925.5 million are approved for 2026, supporting an organic growth plan to reach 1.6 million tonnes of copper production by 2033. The Michiquillay project is expected to start production by 2032, producing 225,000 tonnes of copper per year. The Los Chancas project is expected to begin operating in 2031, producing 130,000 tonnes of copper and 7,500 tonnes of molybdenum annually.

Management Comments

• Our management, therefore, focuses on value creation through copper production, cost control, production enhancement and maintaining a prudent capital structure to remain profitable.
• Our aim is to remain profitable during periods of low copper prices and to maximize financial performance in periods of high copper prices.
• We believe we hold one of the worlds largest copper reserves and resources positions.
• Based on current supply and demand dynamics, we are currently estimating a copper market deficit of 320,000 tonnes for 2026.
• We estimate that this inventory currently covers approximately 14 days of global demand.
• In 2026, we expect our copper production to stand at 911,400 tonnes, mainly due to lower ore grades. We are reviewing this forecast to improve it throughout the year.
• To achieve its full production potential, the Company is developing an organic growth plan to increase our copper volume production to 1.6 million tonnes by 2033.
• 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.
• 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.
• We are confident that we will move forward with the Tia Maria project.
• Our commitment to the Islay province and the Arequipa region is embodied in a comprehensive social strategy through which we have successfully implemented initiatives in education, healthcare, digital inclusion, and productive development that empower communities and create shared value.
• The safety, health and well-being of our employees are the bedrock of SCCs values and remain our highest priorities.
• Southern Copper Corporation is committed to meeting the needs of future generations by promoting inclusive, sustainable development that benefits all and to continually improve our environmental performance.
• Southern Copper Corporation prioritizes being a good neighbor to the communities near our operations.
• We recognize the urgency of tackling climate change and are committed to supporting the objectives of the Paris Agreement, protecting the environment, reducing the environmental footprint of our operations, and effectively managing climate-related risks and opportunities.
• We are committed to enforcing the United Nations Guiding Principles on Business and Human Rights.
• Management believes that the final pricing of these sales will not have a material effect on the Company's financial position or results of operations.

Industry Context

StockSavvy.ai notes that Southern Copper's strong financial performance in 2025, driven by higher metal prices and increased by-product volumes, aligns with a robust global demand for commodities, particularly copper, which is critical for the energy transition and clean energy technologies. The company's strategic focus on cost control, production enhancement, and significant capital investments in organic growth projects like Tia Maria, Los Chancas, and Michiquillay positions it to capitalize on the anticipated long-term copper market deficit. The company's commitment to ESG practices, including The Copper Mark accreditation and exceeding renewable energy targets, reflects a growing industry trend towards responsible sourcing and sustainable operations, which is increasingly valued by corporate entities and societal stakeholders. However, geopolitical uncertainties, trade tensions, and local community challenges, as seen with the Los Chancas project, remain persistent industry-wide concerns that can impact project timelines and costs.

Comparison to Industry Standards

• The company's Dart rate (rate to measure workplace injuries severe enough to warrant Day Away from work, job Restrictions and/or job Transfers) for non-fatal accidents was much lower than the MSHA Dart rate (U.S. Mine Safety and Health Administration benchmark) during the last four years.
• The Sonora Metallurgical Complex was certified as one of the best places to work by Great Place to Work Mexico for the fifth consecutive year in 2025, winning 8th place in 'The Best Workplaces in Mexico 2025', 7th place in 'The Best Workplaces for Women in Mexico 2025', 4th place in 'The Best Workplace Regional Northwest 2025', and 94th place in 'The Best Workplaces in Latin America 2025'.
• Southern Copper Corporation is among the top three mining companies with the highest ratings for sustainability in 2025 in the Corporate Sustainability Assessment (CSA) of S&P Global, with a rating more than twice the industry's average.
• The company was included in the MILA Pacific Alliance category of the Dow Jones Best-in-Class Index for the sixth consecutive year and its first year in the Emerging Markets category.
• The 14% reduction in employee lost-time injuries in 2025 outperformed comparable rates reported across the mining sector.
• The La Caridad Unit's SX-EW Plant received the Mexican Mining Chamber's (Camimex) Silver Helmet award for metallurgical plants with up to 500 workers, recognizing it as one of Mexico's safest operations.
• All SCC units maintained ISO 45001 (occupational health and safety) and ISO 14001 (environmental management) certifications in 2025, passing follow-up audits.
• All four open-pit mines in Mexico and Peru earned The Copper Mark accreditation for compliance with the Global Industry Standard on Tailings Management set forth by the ICMM.
• The Buenavista del Cobre Environmental Management Unit maintained a Wildlife Habitat Council certification since 2023 for its contributions to preventing the extinction of the Mexican grey wolf.
• The company earned a climate governance score of 100 out of 100 in the S&P Global CSA in 2025, a 10-point increase from 2024.
• For a second consecutive year, the company scored 100 in the Task Force on Climate-related Financial Disclosures (TCFD) category in 2025.
• For a third consecutive year, the investor-led Climate Action 100+ initiative recognized the company's efforts and rated it in full compliance with the TCFD category.
• Received a B rating for both Climate Change and Water Security assessments in the Carbon Disclosure Project (CDP) 2024 questionnaires, one level above the mining sector and North American regional averages.

Management Changes

Corporate Governance

Legal Proceedings

• Peruvian Labor Shares: Ongoing lawsuit by former employees seeking delivery of labor shares. The First Civil Court of Lima ordered physical delivery of 8,488,383 investment shares on December 22, 2025. The company filed appeals and a lawsuit seeking constitutional protection on December 30, 2025, challenging the court's interpretation of labor share value. The 9th Constitutional Court of Lima ruled in favor of SPCC on February 11, 2026, declaring nullity of previous resolutions and ordering provisional refrain from execution.
• Tia Maria Mining Project: Seven pending lawsuits challenging the project's Environmental Impact Assessment approval, construction license, and seeking project cancellation. The Supreme Court of Justice of Peru previously ratified the legality of the EIA in February 2022. Cases are pending resolution, with the company vigorously defending against them.
• Special Regional Pasto Grande Project: Lawsuit filed in 2012 alleging property rights over a tailings dam area and seeking its demolition. The case was temporarily archived in July 2022, terminated in May 2023 due to lack of plaintiff interest, but the termination was reversed by the Superior Court in September 2023. Case pending resolution.
• Accidental Spill at Buenavista Mine of 2014: A criminal complaint filed by PROFEPA in August 2014 was dismissed in Q2 2018, but the appeal is pending resolution as of December 31, 2025. SEMARNAT filed another criminal complaint on October 12, 2023, arguing incomplete remediation and insufficient compensation. Three collective action lawsuits and thirty-seven civil action lawsuits are pending, seeking economic compensation, cleanup, and damages. Several constitutional lawsuits (juicios de amparo) have also been filed against authorities and a subsidiary, with some dismissed and others pending resolution.

Related Party Transactions

• Grupo Mexico (88.9% indirect owner) and its affiliates provide various services including accounting, legal, tax, financial, treasury, human resources, price risk assessment and hedging, purchasing, procurement and logistics, sales, and administrative and other support services.
• Purchases from related parties in 2025 totaled $473.0 million, including from Asarco LLC, AMMINCO, Eolica El Retiro, Ferrocarril Mexicano, Grupo Mexico Servicios, MGE, Mexico Compania Constructora, Parque Eolico de Fenicias, and Grupo Mexico Servicios de Ingenieria.
• Sales to related parties in 2025 totaled $99.4 million, including to Asarco LLC, AMMINCO, and MGE.
• Donated $0.5 million in 2025 to Fundacion Grupo Mexico, A.C., an organization promoting social and economic development in communities near Mexican operations.
• Power purchase agreements are in place with MGE (through 2032), Eolica el Retiro, S.A.P.I. de C.V., and Parque Eolico de Fenicias, S. de R.L. de C.V. (20 years, started Q3 2024).
• Transactions with other Larrea family companies (controlling group) for entertainment, air transportation, and real estate, with purchases totaling $3.7 million and sales $2.9 million in 2025.
• Holds a 44.2% equity interest in Compaia Minera Coimolache S.A. (Tantahuatay gold mine) and a 30.0% interest in Apu Coropuna S.R.L. (exploration activities).

Stakeholder Impact

• Shareholders: Benefited from record net income and sales, and increased cash and stock dividends. However, copper production decline and ongoing legal/political risks could impact future returns. The share repurchase program has been inactive since Q3 2016.
• Employees: The company had 16,617 employees (64.4% unionized) as of December 31, 2025. They benefited from a favorable labor environment, talent development, training, and retention programs. A 14% reduction in lost-time injuries was achieved. Market-competitive compensation and benefits are provided, and the ECO opinion survey showed an overall engagement score of 4.12. The Tia Maria project generated 3,589 new jobs, prioritizing local applicants.
• Communities: Significant investments were made in community programs, including $25.2 million in social infrastructure in Mexico and Peru in 2025. Collaboration with the Mexican Social Security Institute and Ministry of Health for health campaigns. The corporate social responsibility policy focuses on sustainable development and positive relationships. The Tia Maria project aims to generate new poles of development and job opportunities for local communities. The Los Chancas project faces delays due to illegal miners. Michiquillay social agreements include support for agricultural/livestock activities, financial support, and social programs.
• Customers: The company maintains long-term contracts for 80-90% of its metal production, focusing on end-user customers and diversifying its sales base.
• Suppliers: A local supplier development model at Tia Maria strengthened 103 local companies, increasing contracts awarded to local suppliers from $4.1 million to $13.3 million.
• Creditors: Minera Mexico issued $1.0 billion in senior unsecured notes in February 2025. The company remains in compliance with debt covenants.
• Regulatory Authorities: The company demonstrates compliance with environmental, mining, and other laws in Peru and Mexico, maintaining ISO 45001 and 14001 certifications and achieving The Copper Mark accreditation. Engaged with Peruvian authorities for Michiquillay project extension.

Next Steps

• Continue developing the organic growth plan to increase copper volume production to 1.6 million tonnes by 2033.
• Invest $1,925.5 million in capital projects in 2026.
• Focus on developing the main and secondary components of the Tia Maria project's dry and wet areas and setting up a temporary camp.
• Restart the environmental impact assessment for Los Chancas in 2026, carry out a 40,000-meter diamond drilling campaign, and conduct hydrogeological and geotechnical studies.
• Continue with hydrological, hydrogeological, and geotechnical studies for Michiquillay in 2026 and initiate mineral reserve estimation and mine plan study.
• Acquire a new radar for Buenavista in 2026 to cover all operating areas and conduct critical monitoring of waste-leachable landfills.
• Complete time-domain/transient electromagnetic and gravimetric geophysical surveys at Chalchihuites in 2026 to identify new drill targets, followed by a 17,000-meter drilling campaign proposal.
• Rehabilitate roads, construct drill pads, and submit a proposal for an 8,440-meter diamond drilling program at Malpica in 2026.
• Conduct further drilling, chemical analysis, and data interpretation at San Diego in 2026.
• Continue with 3,912 meters of drilling work at El Salado (Montonero) in 2026 to complete information for geotechnical and hydrogeological studies for the feasibility study.
• Carry out an assessment of the geological potential of adjacent areas and extensions of the mineralized system at Caadon del Moro in 2026.
• Conduct a 4,000-meter drilling campaign at Esperanza in 2026 to estimate resources and evaluate economic potential.
• Complete a comprehensive evaluation of the Caldera Project in 2026 to define its prospective potential.
• Explore implementing an internal carbon price and update the 2021 scenario analysis in 2026 to identify emerging climate risks and assess future financial impacts.
• Expect to receive 2025 clean energy certificates for Peruvian operations in the first half of 2026.
• The Expatriate Plan termination process is expected to be completed by April 30, 2026.
• The Superior Court of Lima is expected to rule on appeals filed by the Company regarding Peruvian Labor Shares during 2026.
• Management expects to make cash payments of $13.6 million within the Peruvian jurisdiction for uncertain tax positions in the upcoming twelve months ending December 31, 2026.

Key Dates

Recommendation

Southern Copper Corporation delivered record net sales and net income in 2025, demonstrating strong financial performance driven by favorable metal prices and increased by-product volumes. The significant reduction in operating cash cost per pound net of by-product revenues highlights improved operational efficiency. The company's substantial capital investment program and organic growth plans, including major projects like Tia Maria and Michiquillay, position it for long-term production growth and value creation in a market anticipating a copper deficit. While there are ongoing legal and political risks, and some project delays, the overall strategic direction, strong ESG commitments, and robust financial health suggest a positive outlook for investors.

Keywords

Copper, Mining, Molybdenum, Zinc, Silver, Peru, Mexico, Financial Results, Production, Capital Expenditures, ESG, Sustainability, Mineral Reserves, Exploration, Tia Maria, Buenavista, La Caridad, Toquepala, Cuajone, IMMSA, Grupo Mexico, SEC Filing, 10-K