BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR PRIVACY & COOKIE NOTICE
X


Southern Copper sees 1.5 million mt/y copper production by 2023

Lima (Platts)--2 Feb 2017 533 pm EST/2233 GMT


Southern Copper expects to increase copper production by 66% to 1.5 million mt/y by 2023 based on a $5.65 billion pipeline of projects in Peru and Mexico, CFO Raul Jacob said Thursday.

The company aims to match last year's 900,000 mt output in 2017, with annual production rising to 972,300 mt in 2018 and 1.01 million mt and 1.13 million mt in 2019 and 2020, respectively, Jacob said. The company also expects to produce 80,800 mt of zinc, 19,700 mt of molybdenum and 16.6 million oz of silver this year.

New copper output will come from the company's El Arco, El Pilar and Pilares projects in Mexico, and the Toquepala and Cuajone expansions and Tia Maria and Los Chancas projects in Peru, Jacob said.

"We believe we can achieve this through one of the best pipelines of profitable projects," Jacob said on an earnings conference call.

Article continues below...


Learn more about:
Platts Metals Daily / other Platts non-ferrous products

S&P Global Platts metals market reports feature global news, analysis, daily pricing, and commentary on major metals including aluminum, copper, lead, tin, zinc and precious metals, as well as ferroalloys and steel.

If you would like to learn more about Platts nonferrous metals products or services, fill out our contact form and a member of Platts staff will be in touch.

Platts metals reports will help you monitor global events and quickly spot opportunities or potential pitfalls, and help you make better, well-informed business decisions.

Contact Us


Southern has approved $1.1 billion in capex for this year, with $1.6 billion and $1.2 billion planned for 2018 and 2019, respectively, Jacob said. Southern has lined up $2.9 billion in projects in Peru alone, he said.

The company aims to finish a feasibility study this year for the $1.8 billion Los Chancas project and hopes to secure government approval for an environmental impact study by 2019, Jacob said. The project will produce an estimated 100,000 mt/y of copper and 4,500 mt/y of molybdenum.

Southern been has working on community relations at the $1.4 billion Tia Maria project since environmental protests in 2015 left four dead, 300 injured and dozens arrested, forcing the government to declare a state of emergency in the area. Tia Maria is expected to produce 120,000 mt/y of copper.

Southern, which cut cash costs to 95 cents/lb last year, aims to further reduce costs to 80 cent/lb this year due to lower energy costs in Peru and higher credits from byproducts such as silver and molybdenum, he said.

Economic recovery in China and the EU plus strong growth in the US and a dearth of new mines are driving copper prices, according to Jacob. Southern expects copper demand to increase by 2%-2.5% this year and copper supply to rise by 0.5%-1%, he said.

"We're starting 2017 seeing the first signs of the market showing a structural deficit caused by lack of investment," Jacob said. "After five years of copper price reductions, we're seeing supplies underperforming market demand."

Southern's fourth-quarter profit almost tripled to $172 million as sales rose 11.5% to $1.4 billion and costs fell, the Phoenix, Arizona-based company reported February 1.

--Alex Emery, newsdesk@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com




Copyright © 2018 S&P Global Platts, a division of S&P Global. All rights reserved.