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Southern Copper's Q1: Weaker Operational Performance, Better Financial Results


  • Southern Copper's copper, molybdenum, zinc, and silver production declined in Q1.
  • The operating cash costs increased to $0.74/lb copper.
  • Due to the improved metals prices, the revenues and net income improved in comparison to previous quarters.
  • The balance sheet keeps on strengthening.
View of the copper smelting in the factory. Smelting is a process of applying heat to ore in order to extract a base metal. It is a form of extractive metallurgy.
Photo by Funtay/iStock via Getty Images

Southern Copper (NYSE:SCCO) is another copper producer that benefited from high copper prices. Although its production declined in Q1 compared to the previous quarters, high copper prices pushed the revenues and net income to new highs.

Southern Copper's copper production

This article was written by

Peter Arendas profile picture

Peter Arendas is an associate professor at the University of Economics in Bratislava. He has over 15 years of investing experience. Peter specializes in covering small and mid-cap companies in the resource sector with an in-depth insight into the precious and industrial metals royalty & streaming industry.

Peter is the leader of the investing group Royalty & Streaming Corner where he offers in-depth analysis of long-only investment ideas, actionable research, model portfolios, discussions of the latest news, and direct access for questions in chat. Learn More.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)

krauch023 profile picture
Your bar charts are very helpful. Good analysis. Thanks!
Solid quarter. Good to see balance sheet a bit stronger and an easy pathway for the needed investments over the next few years.

Can't beat SCCO for solid lower risk mining investment!

Thanks for the article.
akhait profile picture
I'm getting concerned about political risk... if Castillo wins, I expect less favorable conditions for mining companies. After all, he promised to focus on getting more "equitable" benefits for the country from mining.
Peter Arendas profile picture
@akhait I agree. The question is whether he really wins and whether he really makes some drastic moves against the mining industry. I understand that he wants more money for Peru, on the other hand, if he pushes too hard, it may damage the whole industry and it may lead to even less money for Peru.
Yeah, but I've lived through several election cycles and there is always a leftist, marxist, socialist, etc claiming they will force the mining companies to pay through the nose. And then they get in office and realize that if they want any employment they can't actually do that much. Plus his party only has 30 of the 130 seats in Congress.

SCCO has successfully mined here for a LONG time. Castillo will be a bump in the road - he's totally unqualified to lead a country and being he doesn't have control of the Congress its doubtful he can enact much legislation. At best he gets some sort of minor tax increase. Being that SCCO invests heavily in Peru, they are likely already meeting his objective - which is 70% of profits are invested in Peru and 30% can leave.

The people in Peru that I know are sick of corruption. They aren't sick of solid mining companies providing good paying jobs.
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