Southern Copper: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 22, 2026, Southern Copper (NYSE:SCCO) reported record net sales and net income while outlining plans to push annual production past 1 million tons. Structural cost advantages and substantial organic growth projects position the miner to capitalize on global demand for electrification. Three things management said stand out.

1. High By-Product Credits Drive Net Cash Costs Near Zero

Selling secondary minerals like molybdenum, silver, and zinc provides revenue offsets known as by-product credits, which dramatically reduce net mining expenses. When metal prices rise, these credits insulate operations against underlying inflation in fuel, power, and labor.

For the 9 months of 2026, the operating cash cost per pound net of by-product credits was $0.01. This represents a decrease of 98% compared to the $0.61 reported for the 9 months of 2025.
-- Raul Jacob, Vice President, Finance, Treasurer and Chief Financial Officer

2. New Construction Projects Will Push Copper Output Past 1 Million Tons

Organic mine development expands refined output without requiring expensive corporate acquisitions. Bringing projects like Tia Maria in Peru and El Pilar in Mexico online expands long-term volume capacity and lifts overall asset returns.

Concurrently, our report will show that Tia Maria and El Pilar, which are under construction, are expected to add 156,000 tons of refined copper to our total production figure. At this print, we will widely surpass the annual production mark of 1 million tons.
-- Raul Jacob, Vice President, Finance, Treasurer and Chief Financial Officer

3. Evaluating Mine Expansion to Boost Milling Capacity by One-Third

Increasing daily processing throughput at existing sites allows miners to extract more valuable metal from existing reserves. Upgrading infrastructure at the Cuajone facility in Peru strengthens long-term operational scale at relatively low incremental capital expense.

And for this, the company is evaluating an expansion from the current milling capacity of 90,000 tons per day to 120,000 tons per day. This is a 33% increase in milling capacity.
-- Raul Jacob, Vice President, Finance, Treasurer and Chief Financial Officer

Looking Ahead

Copper demand remains structurally supported by global industrial consumption, and executive messaging radiates quiet confidence in the face of temporary operational friction. Large-scale low-cost reserves, high-grade by-product credits, and an extensive pipeline of fully owned development projects give the business distinct competitive moats. Leadership is keeping a close watch on regional project execution, regulatory permitting steps, and cost control before committing final capital to larger expansions.

These outstanding achievements are driven by operating excellence and reflect our commitment to creating long-term value for our stakeholders in a context marked by sustained demand for copper and the other minerals we produce.
-- Raul Jacob, Vice President, Finance, Treasurer and Chief Financial Officer

Capturing downstream margin through internal refining capacity keeps processing value inside the corporate balance sheet. Rather than relying solely on raw metal sales, expanding domestic processing facilities shields operations from volatile international treatment fees while securing reliable customer pricing power.

So this is, for us, being fully integrated and producing more refined material is one of the goals that we are looking into for the long run of the corporation.
-- Raul Jacob, Vice President, Finance, Treasurer and Chief Financial Officer

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