Southern Copper (NYSE:SCCO) used its fourth-quarter conference call to highlight record financial results for 2025, supported by higher by-product output and stronger metal prices across its portfolio. Vice President of Finance, Treasurer and CFO Raul Jacob said the company set new highs for net sales, adjusted EBITDA, and net income, while also providing production guidance for 2026 and updates on major growth projects in Peru.
Record 2025 financial performance
Jacob said 2025 net sales rose to a record $13.4 billion, up 17% from 2024, driven primarily by improved prices and higher by-product volumes. The company posted a record adjusted EBITDA of $7.8 billion, up 22% year-over-year, with an adjusted EBITDA margin of 58% versus 56% in 2024. Net income reached a record $4.3 billion, up 28% from 2024, with a net income margin of 32%.
Operating cash flow for 2025 was $4.48 billion, up 8%, which management attributed mainly to higher net income, partially offset by an increase in net operating assets, particularly accounts receivable.
Production, pricing, and by-products
Jacob noted that copper represented 75% of sales in the fourth quarter. Copper production in the fourth quarter increased 1.4% sequentially to 242,172 tons, reflecting higher output at La Caridad, Toquepala, Cuajone, and IMMSA due to better ore grades and recoveries, partially offset by lower production at Buenavista. For full-year 2025, copper production decreased 1.8% to 956,270 tons, which was 1% below the company’s plan of 965,000 tons.
By-products played a major role in the year’s results. Jacob said zinc production rose 36% year-over-year, helped by an additional 52,500 tons from the Buenavista zinc concentrator. Mine silver production increased 15% in 2025 to 24 million ounces, and molybdenum production rose 7% to 31,200 tons.
Metal prices were also higher. Jacob cited average LME copper prices of $5.03 per pound in the fourth quarter (up 21% year-over-year), and COMEX copper averaging $5.15 per pound (up 22%). Molybdenum prices averaged $22.75 per pound in the quarter, up 5% from the prior-year period. Silver averaged $54.48 per ounce in the quarter, which Jacob said reflected a 74% increase. Zinc averaged $1.44 per pound, up 4.3%.
During Q&A, management reiterated it does not forecast copper prices, but said it expects demand support from electric vehicles and AI power centers, while acknowledging weakness in China’s real estate market. The company’s commercial team estimates a 320,000-ton copper market deficit in 2026, and Jacob said global copper inventories as of January 26 were roughly 14 days of demand.
Costs and cash cost trends
Total operating costs and expenses rose $282 million in the fourth quarter, a 19% increase from the prior-year period. Jacob attributed the increase to workers’ participation, purchased copper, inventory consumption, and higher spending on operations, contractors, and services. The quarter also included a one-time $60 million adjustment for asset retirement obligations at Mexican operations, mainly Buenavista. These increases were partially offset by lower labor costs at the Peruvian operations.
Operating cash cost per pound of copper before by-product credits was $2.29 in the fourth quarter, up from $2.23 in the third quarter. Including by-product credits, cash cost was $0.52 per pound in the fourth quarter, compared with $0.42 in the third quarter, as by-product credit totaled $920 million, or $1.77 per pound.
For full-year 2025, cash cost before by-product credits was $2.17 per pound, slightly higher than $2.13 in 2024. Including by-product credits, 2025 cash cost was $0.58 per pound, which Jacob said reflected stronger by-product revenue credits compared with 2024.
Asked about cost guidance, Jacob said costs are currently being affected more by currency appreciation in the Mexican peso and Peruvian sol than by local inflation, and he expects operating costs to be “relatively flat on a per pound basis,” though lower production could have some impact. He also said strong by-product production should help credits.
Management disclosed currency exposure in response to a question about sensitivity to exchange rates: 39% of costs are in Mexican pesos, 10% in Peruvian soles, and about 51% are U.S.-dollar denominated.
2026 guidance and long-term outlook
For 2026, Southern Copper expects copper production of 911,400 tons, down 4.7% from 2025, primarily due to lower ore grades at Peruvian operations. The company expects 26,000 tons of molybdenum production in 2026 and about 24 million ounces of silver, a slight decline from 2025. (Jacob also reiterated that silver could become the company’s top by-product if current price levels persist.)
In Q&A, Jacob said copper production should be “more even” through 2026 rather than heavily weighted to early quarters, noting Toquepala is entering a temporary low-grade patch while Cuajone is “more or less stable” but at lower structural grades. The company is considering an expansion at Cuajone to address that, though it remains under review.
Jacob also provided a multi-year copper forecast during the call:
- 2026: 911,400 tons
- 2027: “a little bit north of 900,000 tons” (affected by lower ore grades at Toquepala and Cuajone)
- 2028: 970,000 tons (including the first full year of Tia Maria)
- 2029: 1,060,000 tons
- 2030: 1,060,000 tons
Capital spending, Tia Maria progress, and ESG updates
The company said its capital investment program for the decade exceeds $20.5 billion across Peru and Mexico. Capital investments totaled $1.3 billion in 2025, up 29% year-over-year and equal to about 30% of net income.
Management highlighted progress at the Tia Maria project in Peru’s Arequipa region. Jacob said the project’s estimated capital budget is $1.8 billion, and it was 24% complete at year-end 2025. The company had committed about $800 million to project activities by December 31. For 2026, Jacob forecast $508 million of cash outflows for Tia Maria, noting the reduction versus prior expectations was due to better payment terms on purchase orders, not a change in the overall budget or schedule. Construction is expected to be completed by the end of the first half of 2027, with production of about 30,000 tons in the second half of 2027 and 120,000 tons per year at full capacity thereafter.
On other Peru projects, Jacob said Los Chancas has not advanced due to the presence of illegal miners in the project area, and the company is working with authorities to regain control. For Michiquillay, he said the geological resource review has been audited under SEC standards (Regulation S-K 1300), and the company intends to use that information to estimate reserves and develop mine plans; the project is expected to produce 225,000 tons of copper per year with estimated investment of about $2.5 billion.
On ESG and safety, Jacob said Buenavista, Toquepala, and Cuajone received Copper Mark accreditation for compliance with the global tailings management standard set by the International Council on Mining and Metals. He also noted the La Caridad SX-EW plant received Mexico’s Casco de Plata safety award in its category, and Southern Peru was recognized by the Peruvian government for having the largest number of projects awarded under the Public Works for Taxes mechanism in 2025.
Finally, Jacob reiterated the company’s dividend policy and announced that on January 22, 2026, Southern Copper declared a quarterly cash dividend of $1 per share plus a stock dividend of 0.0085 shares per share, payable February 27 to holders of record as of February 10.
About Southern Copper (NYSE:SCCO)
Southern Copper Corporation (NYSE: SCCO) is a large, integrated copper producer whose operations span the full value chain from exploration and mining to smelting, refining and the sale of copper and other metal products. The company produces a range of copper products including copper concentrate and refined cathodes, and recovers valuable byproducts such as molybdenum, silver and zinc. Southern Copper concentrates on high-volume, long-life assets designed to support steady production and processing capabilities.
Southern Copper’s operations are concentrated in Peru and Mexico, where it owns and operates multiple large-scale mining and processing facilities.
