Southern Copper Corporation
Materials · Diversified Metals & Mining
Structural: largest copper reserves of any listed pure-play (~70Mt+), fully integrated mine-to-refinery footprint in Peru + Mexico, low first-quartile cash costs vs Western peers ($FCX, $TECK). Grupo Mexico parent (~88% ownership) controls float, dampens M&A optionality but aligns capex discipline.
- Copper demand bubble: grid + EV + datacenter electrification structurally short physical copper through 2030+
- Buenavista expansion + Pilares + El Pilar ramping incremental volume into tight market
- Lowest-cost decile producer, leveraged to copper price without diversified-major dilution ($BHP, $RIO)
- Dividend optionality - Grupo Mexico historically uses SCCO as cash-return vehicle
- Molybdenum + silver by-product credits reduce effective copper cost
- Tia Maria has been blocked by Peruvian community opposition for ~15 years; Peru political risk (left-leaning governments, mining royalty regime) is recurring
- Concentrated controlling shareholder limits governance flexibility, M&A premium
- Single-commodity exposure - copper drawdowns hit harder than diversified majors
- Smelter + tailings ESG scrutiny rising; permitting cycles lengthening
- Mexican royalty + water-use reform overhang under current administration
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