NYSE:SCCO
SOUTHERN COPPER CORP/
A premier Tier-1 copper mining giant delivering strong cash flow and a robust balance sheet to fund growth in North and South America.
Key Metrics
Investment Thesis
Bull Case
Investors should consider buying this stock due to its undervalued multiple relative to peers given its superior free cash flow generation and low-cost cost structure. The strategic necessity of copper for the global energy transition supports a long-term demand thesis that aligns with Southern Copper's expanding reserves and production capacity. A high-quality dividend yield supported by a strong balance sheet offers downside protection while capturing upside from potential commodity supercycle.
Bear Case
Potential concerns include the heavy reliance on copper prices, which have recently been volatile, and the substantial capital intensity required to maintain its large asset base. Environmental and social governance (ESG) pressures in Latin America could lead to unexpected regulatory costs or project delays that impact operational continuity. High levels of long-term debt relative to equity might limit financial flexibility if interest rates rise or cash flows tighten unexpectedly.
About SOUTHERN COPPER CORP/
Southern Copper Corporation is a leading global producer of copper, molybdenum, gold, and silver, serving diverse markets including construction, electronics, renewable energy, and transportation. With major operations in Mexico, Peru, the United States, and Chile, the company delivers essential raw materials critical for global electrification and infrastructure development.
Analysis
Management Discussion
Southern Copper delivered exceptional financial performance in 2025, generating $13.42B in revenue and $4.35B in net income, reflecting robust operational efficiency and favorable metal prices. The company's strong operating cash flow of $4.75B demonstrates its ability to convert sales into liquidity while managing capital expenditures of $1.33B for sustaining asset life and strategic growth. Despite significant cash outflows from financing ($2.01B) and investing activities (-$1.68B), the firm retained a healthy ending cash position of $4.30B, underscoring its financial resilience.
Industry Overview
The global copper mining industry is currently navigating a supply deficit driven by decades of underinvestment and the accelerating demand from electric vehicles, data centers, and renewable energy grids. This structural tightness supports long-term price stability but also exposes producers to significant geopolitical and logistical risks inherent in cross-border supply chains.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $10.05B | $9.90B | $11.43B | $13.42B |
| Cost of Revenue | $4.65B | $4.69B | $4.84B | $5.36B |
| Gross Profit | $5.40B | $5.21B | $6.59B | $8.06B |
| Operating Expenses | $963.0M | $1.02B | $1.04B | $1.06B |
| Operating Income | $4.44B | $4.19B | $5.55B | $7.00B |
| G&A | $125.0M | $127.2M | $130.5M | $137.8M |
| D&A | $796.3M | $833.6M | $845.9M | $868.4M |
| Amortization | $7.3M | $7.9M | $9.1M | $7.5M |
| Other OpEx | $838.0M | $888.6M | $906.8M | $921.3M |
| Non-Operating Income | $-188.0M | $-236.5M | $-197.3M | $-217.4M |
| Interest Income | $35.0M | $86.6M | $131.4M | $199.7M |
| Pre-Tax Income | $4.25B | $3.96B | $5.36B | $6.78B |
| Income Tax | $1.60B | $1.52B | $1.98B | $2.47B |
| Continuing Ops | $2.65B | $2.44B | $3.38B | $4.31B |
| Discontinued Ops | $-3.7M | $-2.2M | $6.5M | $34.0M |
| Net Income | $2.65B | $2.43B | $3.39B | $4.35B |
| Minority Interest | $9.5M | $9.5M | $11.8M | $13.3M |
| Net to Common | $2.64B | $2.43B | $3.38B | $4.33B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $5.19B | $4.43B | $6.17B | $8.35B |
| Cash & Equivalents | $2.07B | $1.15B | $3.26B | $4.30B |
| Marketable Securities | $208.3M | $599.3M | $245.3M | $604.6M |
| Accounts Receivable | $1.39B | $1.14B | $1.19B | $1.95B |
| Inventory | $1.01B | $1.02B | $1.05B | $1.06B |
| Other Current Assets | $501.7M | $520.7M | $432.4M | $434.0M |
| Long-Term Assets | $12.09B | $12.30B | $12.54B | $13.03B |
| PP&E (Net) | $9.60B | $9.78B | $9.88B | $10.27B |
| Goodwill | $41.9M | $41.9M | $41.9M | $41.9M |
| Operating Leases | $851.4M | $775.4M | $739.5M | $700.8M |
| Other LT Assets | $1.49B | $1.59B | $1.76B | $1.88B |
| Total Assets | $17.28B | $16.73B | $18.71B | $21.38B |
| Current Liabilities | $1.24B | $1.39B | $2.25B | $2.15B |
| Accounts Payable | $657.6M | $652.6M | $615.2M | $861.5M |
| Current Debt | — | — | $499.8M | — |
| Current Leases | $77.3M | $78.0M | $81.8M | $86.5M |
| Taxes Payable | $138.1M | $278.3M | $635.2M | $634.4M |
| Other Current Liab | $362.7M | $379.6M | $416.1M | $562.7M |
| Long-Term Liabilities | $7.89B | $7.86B | $7.23B | $8.13B |
| Long-Term Debt | $6.25B | $6.25B | $5.76B | $6.75B |
| LT Operating Leases | $774.1M | $697.4M | $657.6M | $576.3M |
| Other LT Liab | $869.5M | $903.6M | $811.2M | $804.4M |
| Total Liabilities | $9.13B | $9.24B | $9.48B | $10.28B |
| Shareholders' Equity | $8.15B | $7.48B | $9.24B | $11.10B |
| Retained Earnings | $7.70B | $7.03B | $6.84B | $5.80B |
| AOCI | $-9.0M | $-8.0M | $-2.2M | $8.3M |
| Treasury Stock | $3.11B | $3.15B | $2.70B | $2.03B |
| Total L&E | $17.28B | $16.73B | $18.71B | $21.38B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $2.65B | $2.43B | $3.39B | $4.35B |
| Non-Cash Adjustments | $733.9M | $1.12B | $524.8M | $-737.2M |
| Working Capital Changes | $-579.4M | $20.3M | $508.3M | $1.14B |
| Cash from Operations | $2.80B | $3.57B | $4.42B | $4.75B |
| Capital Expenditures | $948.5M | $1.01B | $1.03B | $1.33B |
| Cash from Investing | $-666.8M | $-1.40B | $-673.3M | $-1.68B |
| Debt Repayments | $300.0M | — | — | $500.0M |
| Dividends Paid | $2.71B | $3.09B | $1.64B | $2.49B |
| Cash from Financing | $-3.01B | $-3.10B | $-1.65B | $-2.01B |
| FX Effect | $-57.0M | $8.3M | $3.4M | $-13.7M |
| Net Change in Cash | $-932.3M | $-918.2M | $2.11B | $1.05B |
| Beginning Cash | $3.00B | $2.07B | $1.15B | $3.26B |
| Ending Cash | $2.07B | $1.15B | $3.26B | $4.30B |
Frequently Asked Questions
How does SOUTHERN COPPER CORP/ make money?
Primary revenue streams include Copper production from its extensive mine portfolio, Molybdenum extraction as a significant by-product, Gold and Silver mining operations, and associated exploration activities across four countries.
What are the main risks for SCCO?
Operational risks include environmental compliance challenges and potential disruptions from extreme weather events affecting its remote mining sites. Macro-economic volatility in North America and South America could impact local political stability, currency exchange rates, and regulatory frameworks governing resource extraction. Commodity price sensitivity remains a factor, as copper demand growth must outpace rising global supply to maintain margin expansion.
What is SCCO's competitive advantage?
The company possesses one of the largest copper reserves globally with low-cost Tier-1 assets in stable jurisdictions like Mexico and Peru. It maintains a fortress balance sheet characterized by significant cash reserves and manageable debt levels relative to EBITDA, providing flexibility for dividends and acquisitions. Its diversified multi-metal portfolio offers natural hedging against cyclical price fluctuations in any single commodity.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.