Southern Copper sales surge 39.1% to record as Tía María startup slips to 2028
Key Facts
Southern Copper reported record net sales of $4,696.6 million in the third quarter of 2026, up 39.1% year over year, according to company results relayed in the earnings-call transcript. The company attributed sales growth to higher metal prices across its products. Net income rose to $1,801.8 million, compared with $1,107.6 million in the same quarter of 2025, an increase of 62.7%. The company said revenue growth supported higher earnings. But the strong results coincided with lower copper production and higher operating costs before by-product credits.
Mined copper production totaled 232,396 tonnes in the third quarter, down 1.1% from the same period a year earlier. The company attributed the decline mainly to lower ore grades and recovery rates at its operations in Peru. Meanwhile, cash operating costs before by-product credits rose 10.2% to $2.46 per pound. The company linked the increase to higher administrative expenses and production costs. These indicators show contrasting performance during the period, with revenue growth alongside pressure on production and costs.
Cash operating costs after by-product credits fell to $0.09 per pound, from $0.42 in the third quarter of 2025, a year-over-year decline of 77.4%. By-product revenue credits totaled $1,172.9 million, or $2.36 per pound of copper produced, up 31% year over year. The company said higher credits reduced the net cost calculated per pound. This coincided with higher metal prices, which the company said drove quarterly sales growth. In the first nine months of 2026, sales totaled $13,237.0 million and net income was $5,048.6 million, compared with $9,550.2 million and $3,027.0 million, respectively, in the same period of 2025.
On expansion, Southern Copper is targeting the start of operations at the Tía María project in the first half of 2028. Spending on the project reached $884.3 million by the third-quarter results call, while it was 49.6% complete. The chief financial officer said mechanical equipment assembly and some engineering work “will take a little longer.” The announced timetable means the targeted startup comes after the date investors had been anticipating, while management gave no earlier date on the call. Chairman Germán Larrea said the company had completed stripping work at the La Tapada deposit and that the project was approaching half completion.
The company expects Tía María to produce about 120,000 tonnes of copper annually in its first years of operation. The El Pilar project in Mexico’s Sonora state began activities in September and has an estimated capital budget of $551 million. The company is targeting the start of El Pilar operations in 2029, with production of 36,000 tonnes of copper annually in its first years. Southern Copper said the two projects together will add about 156,000 tonnes of refined copper to annual production. The company expects annual output to exceed 1 million tonnes with the projects’ contribution, as part of its long-term target of 1.6 million tonnes.
Capital investment in the third quarter rose to $515.8 million, from $349.2 million in the same period of 2025, an increase of 47.7%. Management said it is reviewing capital spending and budgets alongside mining plans, and will present an update to production forecasts on the January call. The company expects to produce 918,000 tonnes of copper in 2026, while deferring its 2027 guidance until it completes a review of its mining plans. Management said it would issue “a firmer outlook” at the start of 2027 during the January call. It did not announce specific changes to spending or plans on the results call.
The company’s stock fell 6.78% to $184.64 on October 22 after the results announcement, from a previous close of $198.07, according to an Investing.com report. The report suggested investors focused on the delay to the Tía María project and the lack of details on 2027 guidance. EL7 data showed the stock closed at $194.43 on October 27. In the third quarter of 2025, the company had posted year-over-year sales growth of 15.2%, supported by higher metal prices and increased sales volumes of molybdenum, silver and zinc, despite a decline in copper sales volume. Markets are now awaiting management’s update on mining plans and production forecasts on the January call.