SCC(US:SCCO)2026-01-28 16:00Financial Data and Key Metrics Changes - Southern Copper achieved record net sales of $13.4 billion in 2025, a 17% increase from 2024 [3][12] - Adjusted EBITDA reached a record high of $7.8 billion, reflecting a 22% increase over 2024 [4][14] - Net income for 2025 was $4.3 billion, which is 28% higher than in 2024 [4][18] - Operating cash cost per pound of copper before by-product credit was $2.17 in 2025, up from $2.13 in 2024 [16][19] Business Line Data and Key Metrics Changes - Copper production for 2025 was 956,270 tons, a decrease of 1.8% year-on-year [6][19] - Molybdenum production increased by 7.4% year-over-year in 2025, totaling 31,200 tons [9][19] - Silver production rose 15% in 2025, reaching 24 million ounces [10][19] - Zinc production for 2025 increased by 36%, totaling 165,500 tons [11][19] Market Data and Key Metrics Changes - The average copper price on the London Metal Exchange increased by 21% to $5.03 per pound in Q4 2025 [4][5] - The COMEX market saw a 22% increase in copper prices, averaging $5.15 per pound [5] - A copper market deficit of approximately 320,000 tons is estimated for 2026 [5][74] Company Strategy and Development Direction - The company aims to produce 1.6 million tons of copper at the lowest competitive cost [4] - Focus on enhancing productivity and cost efficiency while maintaining a strong commitment to sustainable growth [2][4] - Significant capital investment program exceeding $20.5 billion for projects in Peru and Mexico [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation impacts are being mitigated by currency appreciation rather than specific inflation [29] - The company expects relatively flat operating costs per pound due to strong by-product production [30] - There is optimism regarding the Tia Maria project, which is expected to generate significant economic benefits for the region [21][92] Other Important Information - The company received the Copper Mark accreditation for compliance with global tailings management standards [24] - A quarterly cash dividend of $1 per share was announced, payable on February 27, 2026 [26] Q&A Session Summary Question: Any updated thoughts on cost guidance? - Management indicated that inflation impacts are less significant than currency appreciation effects [29] Question: Guidance on costs for the next quarter or year? - Costs are expected to remain relatively flat on a per-pound basis, supported by strong by-product production [30] Question: Ability to increase silver production in 2026? - Current guidance for silver production is set at 24 million ounces, with potential for improvement based on ore grades [31][32] Question: Reasons for expected decline in molybdenum production in 2026? - Lower ore grades in certain operations are anticipated to impact molybdenum production [36][38] Question: Update on Tia Maria project capital expenditures? - The company plans to disburse approximately $508 million for Tia Maria in 2026, with construction expected to finish by mid-2027 [42][46] Question: Impact of higher copper prices on project development? - Higher prices generally facilitate project development, but illegal mining remains a challenge [68] Question: Overview of copper market dynamics? - A deficit of 320,000 tons is expected in the copper market, with demand driven by electric vehicles and AI [74] Question: Strategy for zinc production at Buenavista? - The focus on zinc production will continue in 2026, with adjustments made based on price dynamics [77][78] Question: Lead time for SX-EW operation at Tia Maria? - The expectation is to have the SX-EW plant operational by the second half of 2027 [88][89] Question: Current relationship with the Mexican government regarding project approvals? - There is a generally improved environment for project approvals in Mexico [95]