Copper Market Deficit and Production Growth: Southern Copper's Strategic Outlook

2024-07-25

Southern Copper Corporation's Second Quarter and 6 Months 2024 Results Conference Call featured key participants such as Raul Jacob, Vice President, Finance, Treasurer, and CFO, Oscar Gonzalez Rocha, CEO of Southern Copper and Board member, and Leonardo Contreras, Board member. The focus of the call was on providing updates on the copper markets, key production and financial results, expansion projects, and ESG initiatives.

During the meeting, it was revealed that the estimated market deficit of copper for 2024 was around 217,000 tons, with the London Metal Exchange copper price having increased by 15% from the second quarter of 2023 to the current quarter. Notably, copper represented 76% of Southern Copper's sales in the second quarter, with total copper production for the period being significant.

The company reported growth in production at the Buenavista zinc concentrator, attributed to factors such as recovery at the SX-EW facilities and the new Buenavista zinc concentrator operating at full capacity. Additionally, positive performance was observed in molybdenum and silver production, with expectations for increased production in the future.

In terms of financials, it was highlighted that the adjusted EBITDA for the first half of 2024 was 20% higher than the same period in 2023, with improved margins and operating cash costs. The call also shed light on social programs, job creation, environmental assessments, and certifications for responsible production, underscoring the company's commitment to sustainable practices.

Detailed discussions took place regarding the Tia Maria project, job opportunities, revenue generation, and environmental assessments. Furthermore, the company outlined its plans for maintaining or enhancing production guidance, capital allocation priorities, and potential future projects, demonstrating a strategic approach to growth and development.

Overall, the conference call provided a comprehensive overview of Southern Copper Corporation's performance, strategies, and initiatives across production, financials, sustainability, and growth prospects. The company's dedication to responsible production, community engagement, and operational excellence was evident throughout the discussions, showcasing a holistic approach to sustainable business practices in the mining industry.