Southern Copper Corporation (NYSE: SCCO) posted record third-quarter net income attributable to shareholders of $1.8 billion, up 62.7% from a year earlier, as higher metal prices outweighed a small drop in copper output. Net sales rose 39.1% to a quarterly record of $4.7 billion, the Phoenix-based miner said on October 20.
The quarter shows how much of the company's earnings growth is now coming from prices rather than volume. The average London Metal Exchange copper price rose 44.4% from a year earlier to $6.41 per pound, while mined copper production fell 1.1% to 232,396 tonnes, which the company attributed mainly to lower ore grades in Peru.
"We are very pleased with our strong third-quarter performance, which delivered a record for net sales, adjusted EBITDA and net income," Chairman German Larrea said in the earnings release. He credited the company's strategy and cost control at its operations.
On a conference call on October 22, Chief Financial Officer Raul Jacob told analysts the company had hit "record highs for net sales, adjusted EBITDA and net income for the second consecutive quarter."
#Southern Copper Margins Widen as By-Product Prices Cut Copper Costs
Adjusted EBITDA rose 53.9% to $3.04 billion, lifting the adjusted EBITDA margin to 64.7% from 58.5% a year earlier. Earnings per share were $2.15, compared with $1.32 in the third quarter of 2025.
Operating cash cost per pound of copper, net of by-product revenue credits, fell to $0.09 from $0.42. The measure subtracts income from by-products such as molybdenum, silver and zinc from the cost of producing copper, and the company said those credits rose 30.6% on higher prices.
Southern Copper, which is 88.9% owned by Grupo Mexico, runs mines and metallurgical plants in Mexico and Peru. The company says it believes it holds the largest copper reserves in the industry.
Copper output in Peru fell 6.1% in the quarter, while production in Mexico rose 2.5%, led by the IMMSA and Buenavista mines. Smelter and refinery output rose 17.8% and 16.1%. Over the first nine months, mined copper production was down 2.9% at 693,602 tonnes.
#Southern Copper Moves Tia Maria Start to First Half of 2028
The company now expects its Tia Maria project in Arequipa, Peru, to begin operations in the first half of 2028. The project previously had a target start date of late 2027. It was 49.6% complete at the end of September, with $884.3 million invested, and is expected to produce 120,000 tonnes of copper a year in its early years.
Tia Maria has faced more than a decade of opposition from local farmers and residents concerned about pollution and water contamination. In April, Peru's government revoked its authorisation for the project and sent it back for review, before the Energy and Mines Ministry authorized the start of exploitation activities later that month. Peru is the world's third-largest copper producer.
In Mexico, early site work began in September at the El Pilar project in Sonora, which has a capital budget of $551 million. The company said construction will start in the first quarter of 2027, with production expected in the second half of 2029.
"With the contribution of Tia Maria and El Pilar we will surpass the one-million tonnes mark for annual production, of which 85% will be refined copper," Larrea said.
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#Southern Copper Sets $1.30 Dividend as Capital Spending Rises 47.7%
The board declared a quarterly cash dividend of $1.30 per share, up from the $1.10 per share paid during the third quarter, alongside a stock dividend of 0.0106 shares per share. Both are payable on November 19 to shareholders of record on November 3.
Capital investment rose 47.7% to $515.8 million in the quarter, while cash flow from operating activities increased 42.6% to $2.22 billion. The company said its capital investment program for this decade exceeds $15 billion across Peru and Mexico.
The company also flagged several risks to its project pipeline. It said it is working to regain control of the Los Chancas project area in Peru, which has been threatened by illegal miners. The start of its El Arco project in Baja California depends on Mexico's state power company connecting the peninsula to the national grid.
Larrea said the company is advancing toward its goal of raising annual copper production to 1.6 million tonnes, with Tia Maria and El Pilar together expected to add about 156,000 tonnes. Lower ore grades in Peru, swings in metal prices, permitting, project timelines and inflationary pressures linked to geopolitical conflicts remain key risks to that outlook.