Southern Copper Q2 Profit Hits Record US$1.67 Billion

Earnings · Peru & Mexico

Southern Copper (NYSE and BVL: SCCO) reported record net sales, record net income and record adjusted EBITDA for the second quarter of 2026, and it did so while digging up less copper than a year earlier. Metal prices, not mining, carried the quarter.

A record quarter built on prices, not production

Southern Copper published its second-quarter results on 21 July 2026 and filed them with the United States Securities and Exchange Commission. Net sales reached US$4,289.0 million, up 40.6 per cent from US$3,051.0 million in the same quarter of 2025.

Net income attributable to the company rose 71.6 per cent to US$1,670.0 million, from US$973.4 million. Reported earnings came in at US$2.01 a share against US$1.17 a year earlier.

Adjusted earnings before interest, tax, depreciation and amortisation hit US$2,856.0 million, up 59.5 per cent from US$1,790.9 million. The adjusted EBITDA margin widened to 66.6 per cent from 58.7 per cent.

Operating income climbed 65.3 per cent to US$2,623.2 million. The net income margin reached 38.9 per cent, against 31.9 per cent a year earlier.

The company itself attributes the growth almost entirely to price. Copper on the London Metal Exchange averaged US$6.04 a pound in the quarter, 39.8 per cent above the year-earlier average, while the COMEX price rose 30.5 per cent.

By-products did even better. Silver averaged US$73.49 an ounce, up 118.6 per cent, molybdenum rose 43.1 per cent and zinc 30.8 per cent.

Those gains were partly offset by lower sales volumes. Copper sales volumes fell 1.5 per cent, to 220,712 tonnes from 224,063 tonnes.

The five-cent cash cost, and what is actually behind it

The most eye-catching number in the release is the operating cash cost per pound of copper, net of by-product revenue credits. It fell to US$0.05 in the quarter from US$0.63 a year earlier, a decline of 93 per cent.

This does not mean Southern Copper has learned to mine copper almost for free. The figure is a net measure, and it collapsed because by-product revenue credits rose 51.4 per cent on the back of soaring silver, molybdenum and zinc prices.

Gross costs went the other way. Cost of sales rose 14.7 per cent to US$1,389.5 million, and depreciation, amortisation and depletion rose 9.6 per cent to US$226.0 million.

Over the first six months the net cash cost was actually negative, at minus US$0.03 a pound, against US$0.70 in the same period of 2025. A negative cash cost is an artefact of by-product accounting, not a sign that the mines pay for themselves.

Production keeps slipping, and Peru is the reason

Mined copper production fell 3.5 per cent to 230,662 tonnes, from 238,980 tonnes in the second quarter of 2025. Including third-party concentrate, total production was 232,521 tonnes.

The Mexican operations lifted output 3.2 per cent. The Peruvian mines dropped 12 per cent, which the company blames on lower ore grades.

Across the first half, mined copper production was 461,206 tonnes, down 3.8 per cent from 479,206 tonnes. Management nonetheless raised full-year guidance to 917,000 tonnes on the earnings call.

By-product volumes fell across the board. Mined silver was down 3.8 per cent at 5.76 million ounces, mined zinc down 14.5 per cent at 39,257 tonnes and mined molybdenum down 11.0 per cent at 7,046 tonnes.

Toquepala, Cuajone and Buenavista all produced less silver than a year earlier. For a company whose quarter was rescued by by-product prices, the falling by-product tonnage is the number to watch.

Who actually leads Southern Copper

Oscar Gonzalez Rocha, the company’s president, chief executive officer and a member of its board, died unexpectedly on 7 April 2026. Southern Copper disclosed the death in a Form 8-K filed with the SEC on 13 April.

He was not the chairman. That post is held by German Larrea, who also controls Grupo Mexico, the group that owns 88.9 per cent of Southern Copper.

Larrea remains in office and is quoted in the second-quarter release, commenting on Peru’s coming change of government and on the company’s project pipeline.

Leonardo Contreras Lerdo de Tejada was appointed interim chief executive with effect from 16 April 2026 and confirmed as chief executive on 23 April. His first set of quarterly results was the first quarter, released on 29 April; this is his second.

Gonzalez Rocha had led the company for more than two decades and sat on its board from 1999. In Peru he was widely known as the public face of Southern Peru, the branch that runs Toquepala and Cuajone.

Where the cash is going: Tia Maria and the Peruvian pipeline

Capital investment reached US$422.8 million in the quarter, up 79.4 per cent from US$235.7 million. That is a quarter of net income ploughed back into the ground.

On 24 June the company issued US$1.25 billion of ten-year senior unsecured notes at 5.350 per cent, maturing in 2036. The proceeds are earmarked for Southern Peru Copper Corporation and the Tia Maria project.

Tia Maria, in Arequipa, was 42 per cent complete at the end of June. Southern Copper has committed US$1,101 million to it so far and spent US$693 million of that. The US$1,101 million is the sum committed to date, not the project’s total cost.

The mine is designed to produce 120,000 tonnes of copper cathode a year at an estimated cash cost of US$1.16 a pound, with first output expected in the second half of 2027. The company says 5,817 jobs have been created, 1,254 of them filled locally.

Two other Peruvian projects sit behind it. Michiquillay, in Cajamarca, would produce about 225,000 tonnes a year from 2032 for roughly US$2.5 billion.

Los Chancas, in Apurimac, is budgeted at US$2.6 billion for a 2031 start, but the company reports that illegal miners remain inside the project area despite enforcement by the state. Together the three Peruvian projects represent about US$10.3 billion of planned investment, a total built from each project’s full budget rather than from the amounts committed so far.

In Mexico, El Pilar in Sonora begins site preparation in September 2026, with construction from the first quarter of 2027 and production from the second half of 2029. It carries a US$551 million budget for 36,000 tonnes a year of copper cathode.

The payout, and the part of it that is not cash

On 16 July the board authorised a quarterly cash dividend of US$1.10 a share, payable on 27 August to holders of record on 11 August.

It also declared a stock dividend of 0.0120 shares for each share held. That portion is not cash: it issues new shares to existing holders and dilutes the count rather than paying anyone out.

Counting both, and valuing the stock element at a share price of US$177.32, the company puts the total at about US$3.23 a share. Cash flow from operations in the first half was US$3,683.0 million, up 116.9 per cent.

Frequently Asked Questions

How much did Southern Copper earn in the second quarter of 2026?

Net income attributable to the company was US$1,670.0 million, up 71.6 per cent from US$973.4 million a year earlier, on net sales of US$4,289.0 million. Reported earnings were US$2.01 a share.

Why did Southern Copper’s cash cost fall to five cents a pound?

Because the measure is net of by-product revenue credits, which rose 51.4 per cent as silver, molybdenum and zinc prices surged. Gross cost of sales actually rose 14.7 per cent.

Who runs Southern Copper after the death of Oscar Gonzalez Rocha?

Gonzalez Rocha was president and chief executive, not chairman, and died on 7 April 2026. Leonardo Contreras Lerdo de Tejada became chief executive on 23 April 2026, while German Larrea continues as chairman of the board.

Sources: Southern Copper, Second Quarter and Six Months 2026 Results, Exhibit 99.1 filed with the SEC, 21 July 2026, Southern Copper Form 8-K announcing the death of Oscar Gonzalez Rocha, 13 April 2026, Investing.com earnings call report, for the analyst consensus figures

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