Skip to content
    SCCO
    Earnings call· Sep 2025(Q3 FY25)

    SOUTHERN COPPER CORP/ SCCO

    Oct 29, 2025 Source

    Executive summary

    Southern Copper Q3 FY25 — Record Sales, EBITDA, and Net Income Driven by By-product Production and Prices

    Southern Copper delivered record financial performance in Q3 FY25, fueled by robust by-product production and favorable metal prices, which contributed to an industry-leading low cash cost. Despite a decline in copper output due to lower ore grades, the company is advancing major growth projects like Tia Maria, which recently secured exploitation authorization, and is committed to organic growth and cost efficiency to achieve its long-term production goals.

    Highlights

    5

    • Achieved new company records for net sales, adjusted EBITDA, and net income in Q3 FY25.

    • Adjusted EBITDA increased 17% to $1,975 million in Q3 FY25, with margin expanding to 59%.

    • Net income increased 23% to $1,108 million in Q3 FY25, with margin at 33%.

    • Operating cash cost, including by-product credits, was $0.42 per pound of copper in Q3 FY25, one of the industry's lowest.

    • By-product production saw significant increases in Q3 FY25: Zinc rose 46%, Silver 16%, and Molybdenum 8%.

    Concerns

    5

    • Copper production decreased 7% in Q3 FY25 to 234,892 tons, primarily due to lower ore grades.

    • FY25 copper production is expected to be 960,000 tons, a 2% decrease from 2024 and slightly below plan.

    • Operating cash cost per pound of copper before by-product credits increased 5% QoQ to $2.23 in Q3 FY25.

    • The Los Chancas project is facing issues with illegal miners, requiring actions to regain control.

    • Total operating costs and expenses increased 9% YoY in Q3 FY25, driven by purchased copper concentrate, labor, and energy.

    Guidance & targets

    11
    CategoryTargetConfidence
    FY25 Copper production
    960,000 tons
    high materiality
    High
    FY25 Molybdenum production
    30,000 tons
    medium materiality
    High
    FY25 Silver production
    23 million ounces
    medium materiality
    High
    FY25 Zinc production
    174,700 tons
    medium materiality
    High
    Q4 FY25 Operating cash cost before by-product credits
    $2.15-$2.20 per pound
    medium materiality
    High
    FY26 Copper production
    ~911,000 tons
    high materiality
    Medium
    FY26 Capital expenditure
    ~$2 billion
    high materiality
    High
    Tia Maria project jobs during construction
    3,500 jobs
    medium materiality
    High
    Tia Maria project jobs during operations
    764 direct jobs and 5,900 indirect jobs
    medium materiality
    High
    Tia Maria project ramp-up
    Ramping up through 2027, initial testing/ramp-up H2 2027
    high materiality
    High
    Long-term copper production goal
    1.6 million tons
    high materiality
    High

    Operational metrics

    19
    Adjusted EBITDA
    $1,975 million+17% YoY
    Q3 FY25

    Represents a new company record.

    Adjusted EBITDA
    $5,512 million+13% YoY
    9M FY25

    Year-to-date figure.

    Net sales
    $3.4 billion+15% YoY
    Q3 FY25

    This figure was $446 million above the third quarter of 2024 trend, representing a new company record.

    Copper sales value
    increased
    Q3 FY25

    Increased despite a drop in volume, due to better prices.

    Molybdenum sales
    +46%YoY
    Q3 FY25

    Due to growth in volume and better prices.

    Zinc sales
    +12%YoY
    Q3 FY25

    Due to an uptick in volume and better prices.

    Silver sales
    +65%YoY
    Q3 FY25

    Due to higher volume and better prices.

    Total operating costs and expenses
    +9%YoY
    Q3 FY25

    Compared to Q3 FY24.

    Net income
    $1,108 million+23% YoY
    Q3 FY25

    Represents a new company record, driven by increased sales and cost containment activities.

    Net income
    +17%YoY
    9M FY25

    Year-to-date figure, due to growth in net sales.

    Cash position
    $4.5 billion
    Current

    Company has a comfortable cash position, partly due to not yet having taken on debt for Tia Maria and strong prices.

    Quarterly cash dividend
    $0.90 per share
    Q3 FY25

    Declared by the Board on October 23, 2025.

    Quarterly stock dividend
    0.0085 shares per share
    Q3 FY25

    Declared by the Board on October 23, 2025. Rationale is to provide more liquidity to stockholders.

    Treasury shares
    72 million
    Current

    Number of shares in treasury before paying the current dividend.

    GHG emissions reduction
    180,000 tons of carbon
    2025 YTD

    Achieved at underground mines through electricity from the Fenicias wind farm.

    Ecosystem restoration
    67 hectares
    2025 YTD

    Advanced work to restore at Buenavista recovery installations.

    Ecosystem restoration
    10 hectares
    2025 YTD

    Advanced work to restore at Ite wetlands.

    Reforestation preparation
    200 hectares
    2025

    Preparing stocks and services, installing assisted irrigation systems for reforestation in 2025.

    Dr. Vagón Health train consultations
    >20,000
    2025

    Imparted free consultations, marking an all-time high for Dr. Vagón. Total consultations and prescriptions over 9 previous visits also provided.

    Industry KPIs

    5
    MetricValueDetails
    Unit cash cost$0.42/lbUSD/lb
    By product credits$895 millionUSD
    Growth project CAPEX first production23% complete%
    Ore grade recovery drilling by depositLower ore grades
    Production sales volume by metal and by mine234,892 tonstons

    Capital programs

    8
    Peruvian projects (total investment)underway>$10.3 billion

    Total investment for Peruvian projects currently being built or undergoing engineering.

    Mexican investments (total)underway$10.2 billion

    Company is conducting talks with the current administration to roll out these investments.

    Tia Maria projectunderway
    Period spend: $866 million (FY26)
    Spent to date: 23% complete (as of Sep 30, 2025)
    Funding: Debt market expected

    Benefit: 3,500 jobs during construction; 764 direct jobs, 5,900 indirect jobs during operations

    Received authorization from the Ministry of Energy and Mine to begin exploitation activities on October 14, 2025. Pre-stripping activities and main project components building to begin soon. Progress on access roads and platforms stands at 90%.

    Los Chancas projectunderway

    Social and environmental management programs are underway. Actions are being undertaken to regain control of the project in response to the presence of illegal miners. Expected to be the next project in terms of execution after Tia Maria.

    Michiquillay projectunderway

    Geological information from drilling programs used to develop mineral resource models, currently being audited. Conceptual study for tailings storage facility and hydrogeological/geotechnical studies are underway. Also in line for execution after Tia Maria.

    El Arco projectunderway

    Scheduled to move on in the next decade. No additional progress reported for now.

    El Pilar projectunderway

    Benefit: Production kicking in

    Expected to kick in with production in 2028.

    Cuajone concentrator expansion (new line)under consideration$600 million - $700 million (estimated)

    Benefit: 40,000 tons of copper

    Not Board approved; working on a solid case to present to the Board. Aims to mitigate expected reduction in ore grades at Cuajone starting next year.

    Risks & headwinds

    4
    Copper production decrease due to lower ore gradesQ3 FY25, 9M FY25, FY25

    7% drop in Q3 FY25 to 234,892 tons; 3% drop in 9M FY25 to 714,098 tons; FY25 target 960,000 tons (2% decrease vs 2024)

    Mitigation: Dedication of Buenavista zinc concentrator to maximize zinc/silver production; considering Cuajone concentrator expansion to fill material from ore grade decline.

    Presence of illegal miners at Los Chancas projectOngoing

    N/A

    Mitigation: Undertaking necessary actions to regain control of the project; working with authorities and communities.

    Potential political/social unrest impacting Tia Maria projectNear-term (elections in Peru)

    N/A

    Mitigation: Continuously monitoring social circumstances; working with local people, authorities, and mayors of Islay province; currently seeing a calm environment.

    Increase in operating costs and expensesQ3 FY25

    Total operating costs and expenses up 9% YoY ($128 million) in Q3 FY25

    Mitigation: Cost containment activities; offset by drop in inventory consumption. Main cost increments were purchased copper concentrate, workers participation, labor, operations contractors and services, energy, and sales.

    What to watch in Q4 FY25

    5

    Cuajone Concentrator Expansion Approval

    Next year
    CurrentUnder consideration, not Board approved
    TargetInitial Board approval

    Why it matters

    This project aims to mitigate expected ore grade decline at Cuajone and add 40,000 tons of copper production, crucial for maintaining production levels.

    When could be this approved? Well, let's say that we finish the work and present some guidance to the Board next year, then we could have an initial approval.

    Q&A highlights

    7

    What are the expectations for cash cost before by-products in Q4 FY25 and FY26?

    Q4 FY25 cash cost before by-products is expected to decrease to $2.15-$2.20 per pound, down from $2.23 in Q3 FY25, due to anticipated production recovery in Peruvian operations. FY26 cash cost is expected to be in the range of current year-to-date or better, depending on by-product prices.

    “For the fourth quarter, Carlos, we will very likely decrease our cash cost because we will be having a partial recovery of production, particularly at the Peruvian operations, we believe that production will improve in the fourth quarter. So we are operating at about $2.23, if I recall it well. And we're expecting to have in the range of $2.15 to $2.20 in the fourth quarter.”

    asked by Carlos De Alba · answered by Raul Jacob

    2 min read6 chapters

    Detailed Narrative

    01

    Market Dynamics and Pricing Trends

    The LME copper price increased 7% to $4.44 per pound in Q3 FY25 from $4.17 per pound in Q1 FY24, while the COMEX market saw a 14% increase. Southern Copper estimates a global copper market deficit of almost 400,000 tons, with worldwide inventories covering approximately 8 days of demand. By-product prices also saw significant increases: molybdenum averaged $24.30 per pound (+12% YoY), silver $39.56 per ounce (+34% YoY), and zinc $1.28 per pound (+2% YoY).

    02

    Production Performance and Drivers

    Copper production decreased 7% in Q3 FY25 to 234,892 tons, primarily due to lower ore grades in Peruvian operations (Toquepala and Cuajone) and Mexican operations (Buenavista). Year-to-date copper production fell 3% to 714,098 tons. Conversely, by-product production surged, with zinc up 46% (driven by the Buenavista zinc concentrator processing high-grade material), silver up 16%, and molybdenum up 8% in Q3 FY25.

    03

    Cost Efficiency and Financial Results

    Southern Copper achieved an operating cash cost of $0.42 per pound of copper (including by-product credits) in Q3 FY25, a 34% reduction from Q2 FY25, positioning it among the industry's lowest. This was largely due to a 22% increase in by-product credits to $895 million. Adjusted EBITDA reached a record $1,975 million in Q3 FY25 (+17% YoY), with a 59% margin. Net income also hit a record $1,108 million (+23% YoY), with a 33% margin, driven by increased sales and cost containment.

    04

    Peruvian Growth Projects Update

    The Tia Maria project, with 23% progress as of September 30, 2025, received authorization to begin exploitation activities in October 2025, with pre-stripping and main component construction starting soon. The Los Chancas project is advancing social and environmental programs but is working to regain control from illegal miners. For Michiquillay, geological models are being audited, and conceptual studies for tailings facilities are underway, with promising results.

    05

    Mexican Investments and Organic Growth Focus

    Southern Copper is in discussions with the Mexican administration regarding $10.2 billion in investments for projects such as Angangueo, Chalchihuites, and the Empalme Smelter, aiming to bolster its position as a fully integrated copper producer. The company remains focused on organic growth, viewing its internal projects as offering superior economics compared to external M&A opportunities.

    06

    ESG Initiatives and Community Engagement

    SCC's sustainability rating improved by 4 points from S&P Global, reflecting strong performance in areas like environmental management and community relations. The Fenicias wind farm has reduced greenhouse gas emissions by 180,000 tons in 2025. The company is actively restoring ecosystems in Mexico (67 hectares) and Peru (10 hectares) and supports community development through school modernization, a biomedical sciences laboratory, and over 20,000 free medical consultations via the Dr. Vagón Health train in Sonora.

    AI-generated summary of the company’s earnings call. Not investment advice.