# Southern Copper Corp/: Form 10-Q for the period ended Jun 30, 2024

- Company: [Southern Copper Corp/](/companies/scco.md) (CIK 1001838)
- Form: 10-Q
- Filed: 2024-08-02
- Accepted by EDGAR: Aug 2, 2024, 15:11 ET
- Period: 2024-06-30
- Accession: 0001558370-24-010710
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1001838/000155837024010710/scco-20240630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1001838/000155837024010710/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-01 to 2024-06-30 | $3.12bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-01-01 to 2024-06-30 | $5.72bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-04-01 to 2024-06-30 | $1.25bn | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2024-01-01 to 2024-06-30 | $2.41bn | us-gaap:CostOfRevenue |
| Selling, general and administrative | 3 months, 2024-04-01 to 2024-06-30 | $33.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-01-01 to 2024-06-30 | $64.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | $1.61bn | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | $2.80bn | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-04-01 to 2024-06-30 | $578.8m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-01-01 to 2024-06-30 | $1.00bn | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | $953.8m | us-gaap:ProfitLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | $1.69bn | us-gaap:ProfitLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | $1.22 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | $2.17 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | $1.22 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | $2.17 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 777,900,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 775,500,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-04-01 to 2024-06-30 | $962.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | $1.62bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-04-01 to 2024-06-30 | $331.8m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Capital expenditure | 6 months, 2024-01-01 to 2024-06-30 | $545.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2024-01-01 to 2024-06-30 | $618.5m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-06-30 | $1.88bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $5.33bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $17.78bn | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $1.90bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2024-06-30 | $5.76bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-06-30 | $499.5m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-06-30 | $8.49bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 75,959 characters.

*The following discussion provides information that management believes is relevant to an assessment and understanding of the condensed consolidated financial condition and results of operations of Southern Copper Corporation and its subsidiaries (collectively, “SCC”, “the Company”, “our”, and “we”). This item should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this quarterly report. Additionally, the following discussion and analysis should be read in conjunction with the Management Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements included in Part II of our annual report on Form 10-K for the year ended December 31, 2023.*

EXECUTIVE OVERVIEW

Business: Our business is primarily the production and sale of copper. In the process of producing copper, a number of valuable metallurgical by-products are recovered, which we also produce and sell. Market forces outside of our control largely determine the sale prices for our products. Our management, therefore, focuses on value creation through copper production, cost control, production enhancement and maintaining a prudent capital structure to remain profitable. We endeavor to achieve these goals through capital spending programs, exploration efforts and cost reduction programs. Our aim is to remain profitable during periods of low copper prices and to maximize financial performance in periods of high copper prices.

We are one of the world’s largest copper mining companies in terms of production and sales and our principal operations are in Peru and Mexico. We also have exploration programs in Chile, Argentina and Ecuador. In addition to copper, we produce significant amounts of other metals, either as a by-product of the copper process or through a number of dedicated mining facilities in Mexico.

Outlook: Various key factors will affect our outcome. These include, but are not limited to, the following:

- Sales structure: In the second quarter of 2024, approximately 75.9% of our revenue came from the sale of copper; 12.2% from molybdenum; 5.0% from silver; 3.7% from zinc; and 3.2% from various other products, including gold, sulfuric acid, and other materials.
- Copper: In the second quarter of 2024, the LME copper price increased from an average of $3.85 per pound in the second quarter of 2023 to $4.42 (+14.8%). Based on the production cuts announced by several producers and other information to date, we anticipate a market deficit of approximately 217,000 tons of copper for 2024. Currently, we estimate that copper supply will increase slightly by 0.6%. Despite weak demand from China, primarily due to its real estate market, the resilience of the US economy and new demand from decarbonization technologies and artificial intelligence are sustaining copper demand and prices.
- Molybdenum: Accounted for 12.2% of our sales in the second quarter of 2024 and is currently our most important by-product. Molybdenum prices averaged $21.69 per pound in the second quarter of 2024, compared to $20.87 in the same period of 2023, reflecting an increase of 3.9%.

Molybdenum is mainly used in the production of special alloys for stainless steel that require significant hardness and corrosion and heat resistance. New uses for this metal are associated with lubricants, sulfur filtering of heavy oils and shale gas production.

For the short term, we believe molybdenum prices will have good support due to a market deficit and higher demand coming from the aerospace and defense industries.

- Silver: Represented 5.0% of our sales in the second quarter of 2024. We believe that the prices for silver will be supported by intensive level of industrial use.
- Zinc: Average zinc prices increased 12.2% in the second quarter of 2024 versus the figure in 2023. We believe zinc has very good long-term fundamentals due to high levels of industrial consumption and expected production. Zinc represented 3.7% of our sales in the second quarter of 2024.
- Production: For 2024, we expect to produce 963,200 tonnes of copper, an increase of 6.0% over 2023’s final results. This growth will be fueled by recovery at our SX-EW facilities at Buenavista and by the copper production of our new Buenavista zinc concentrator, which is operating at full capacity.

We also expect to produce 27,400 tonnes of molybdenum, which represents an increase of 2.0% over our 2023 production level. In 2024, we expect to produce 20.6 million ounces of silver, an increase of 12.0% compared to 2023 production results. Additionally, we expect to produce 121,800 tonnes of zinc from our mines, which represents an increase of 86.0% compared to our 2023 production level. This growth will be driven by the Buenavista Zinc concentrator. We expect this facility to produce 55,400 tonnes of zinc in 2024. For 2025 and on, we expect to produce over 178,000 tonnes per year.

- Capital Investments: In the first semester of 2024, we spent $545.6 million on capital investments; this represented 32.2% of net income and an increase of 11.2% compared to the amount registered for the same period in 2023.

KEY MATTERS

Below, we discuss several matters that we believe are important to understand the results of our operations and financial condition. These matters include, (i) our earnings, (ii) our production, (iii) our “operating cash costs” as a measure of our performance, (iv) metal prices, (v) business segments, (vi) the effect of inflation and other local currency issues, and (vii) our capital investment and exploration program.

**Earnings:** The table below highlights key financial and operational data of our Company for the three and six-month period ended June 30, 2024 and 2023 (in millions, except copper price, percentages and per share amounts):

| ​ ​ ​ | ​ | ​ ​ ​ Three months ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ ​ | ​ ​ % Change | ​ ​ | ​ ​ ​ Six months ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ ​ | ​ ​ % Change | ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Copper price LME | ​ | ​ 4.42 | ​ | ​ 3.85 | ​ | ​ 0.57 |  | 14.8% | ​ | ​ 4.13 | ​ | ​ 3.95 | ​ | ​ 0.18 |  | 4.6% | ​ |
| Pounds of copper sold | ​ | ​ 509.3 | ​ | ​ 482.8 | ​ | ​ 26.5 |  | 5.5% | ​ | ​ 1,027.9 | ​ | ​ 987.1 | ​ | ​ 40.8 |  | 4.1% | ​ |
| Net sales | ​ | $3,118.3 | ​ | $2,300.7 | ​ | $817.6 |  | 35.5% | ​ | $5,718.1 | ​ | $5,094.6 | ​ | $623.5 |  | 12.2% | ​ |
| Operating income | ​ | $1,607.3 | ​ | $900.7 | ​ | $706.6 |  | 78.5% | ​ | $2,797.0 | ​ | $2,254.4 | ​ | $542.6 |  | 24.1% | ​ |
| Net income attributable to SCC | ​ | $950.2 | ​ | $547.5 | ​ | $402.7 | ​ | 73.6% | ​ | $1,686.2 | ​ | $1,360.7 | ​ | $325.5 | ​ | 23.9% | ​ |
| Earnings per share | ​ | $1.22 | ​ | $0.71 | ​ | $0.51 | ​ | 71.8% | ​ | $2.17 | ​ | $1.76 | ​ | $0.41 | ​ | 23.3% | ​ |
| Dividends per share | ​ | $1.20 | ​ | $1.00 | ​ | $0.20 | ​ | 20.0% | ​ | $2.00 | ​ | $2.00 | ​ | $— | ​ | —% | ​ |

Net sales in the second quarter of 2024 totaled $3,118.3 million, which represented a substantial increase of 35.5% compared to net sales in the same period of 2023. This increase was influenced by higher prices of copper (+14.8%. LME), molybdenum (+3.9%), zinc (+12.2%) and silver (+18.9%) and was also impacted by growth in the sales volumes of copper (+5.5%), molybdenum (+21.4%), zinc (+78.1) and silver (+31.6%). The increase in the sales volumes of zinc was mainly driven by Buenavista Zinc, which was working at full capacity.

Net income attributable to SCC for the second quarter of 2024 was $950.2 million, representing a significant 73.6% increase compared to the same period in 2023. This notable growth, which was primarily driven by a 35.5% rise in sales due to improved pricing, was slightly offset by a 8.8% growth in the cost of sales and a 96.5% increase in income taxes.

Net sales for the first half of 2024 increased by 12.2% compared to the same period in 2023. This increase was driven by higher prices for copper (+4.6%, LME) and silver (+11.5%), as well as higher sales volumes of copper (+4.1%), molybdenum (+14.8%), zinc (+33.7%), and silver (+12.0%). This was partially offset by a decrease in prices for molybdenum (-21.5%) and zinc (-7.0%).

Net income attributable to SCC in the first six months of 2024 increased by 23.9% compared to the same period in 2023. This rise was primarily driven by a sales increase of 12.2%, but was partially offset by a slight growth in operating costs of 2.8% and a 29.3% increase in income taxes.

**Production:** The table below highlights our mine production data for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2024 | ​ ​ 2023 | ​ ​ Variance | ​ ​ ​ % Change ​ | ​ ​ ​ ​ Six months ended June 30, 2024 | ​ ​ 2023 | ​ ​ Variance | ​ ​ ​ ​ ​ % Change ​ ​ |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Copper (in million pounds) | 534.6 | 501.6 | 33.0 | 6.6% | 1,064.3 | 993.9 | 70.4 | 7.1% |
| Molybdenum (in million pounds) | 16.9 | 14.0 | 3.0 | 20.8% | 32.5 | 28.2 | 4.3 | 15.1% |
| Silver (in million ounces) | 5.2 | 4.8 | 0.4 | 8.0% | 10.0 | 9.2 | 0.8 | 8.2% |
| Zinc (in million pounds) | 64.9 | 38.0 | 26.9 | 70.8% | 123.0 | 71.2 | 51.8 | 72.7% |

The table below highlights our mine production data for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ ​ ​ Copper (in million pounds): | ​ ​ Three Months Ended June 30, 2024 | ​ ​ 2023 | ​ ​ Variance | ​ ​ ​ % Change | ​ ​ ​ | ​ ​ Six Months Ended June 30, 2024 | ​ ​ 2023 | ​ ​ Variance | ​ ​ ​ ​ ​ % Change ​ ​ |
| --- | ---: | ---: | ---: | ---: | --- | ---: | ---: | ---: | ---: |
| Toquepala | 142.1 | 117.3 | 24.8 | 21.1% | ​ | 280.4 | 230.5 | 49.9 | 21.6% |
| Cuajone | 89.9 | 83.8 | 6.1 | 7.3% | ​ | 180.8 | 163.8 | 17.0 | 10.4% |
| La Caridad | 64.6 | 60.3 | 4.3 | 7.1% | ​ | 129.6 | 117.8 | 11.8 | 9.9% |
| Buenavista | 232.9 | 234.8 | (1.9) | (0.8)% | ​ | 462.8 | 471.8 | (9.0) | (1.9)% |
| IMMSA | 5.1 | 5.4 | (0.3) | (6.0)% | ​ | 10.7 | 10.0 | 0.7 | 7.1% |
| Total mined copper | 534.6 | 501.6 | 33.0 | 6.6% | ​ | 1,064.3 | 993.9 | 70.4 | 7.1% |

Second quarter: Copper mine production in the second quarter of 2024 increased by 6.6%, reaching 534.6 million pounds. This growth was primarily driven by higher production levels at Toquepala (+21.1%; due to higher ore grades and recoveries), Cuajone (+7.3%; due to higher recoveries), and La Caridad (+7.1%; due to higher ore grades and recoveries). Growth was slightly offset by reduced production at the Buenavista (-0.8%; due to lower ore grades) and IMMSA (-6.0%; due to lower ore grades) operations

Molybdenum production increased by 20.8% in the second quarter of 2024 compared to the same period in 2023. This rise was mainly due to higher production at our Toquepala (+91.7%), Cuajone (+5.6%), and Buenavista (+14.4%) mines, primarily driven by an increase in ore grades. This was somewhat offset by a reduction in production at our La Caridad (-3.3%) mine, which was due to a decline in ore grades.

Silver mine production increased by 8.0% in the second quarter of 2024 compared to the same period in 2023. This increase was attributable to higher production at our Buenavista (+28.9%), Toquepala (+24.9%), La Caridad (+6.7%), and Cuajone (+0.6%) operations. This was slightly offset by a decrease in production at our IMMSA (-10.1%) mine.

Zinc production increased by 70.8% in the second quarter of 2024 compared to the same period in 2023. This growth was primarily due to the production start-up at the Buenavista zinc concentrator, which produced 13,653 tonnes during the period.

Six months: Mined copper production in the first six months of 2024 rose by 7.1%. This increase was primarily attributable to higher production at our Peruvian operations, with Toquepala up by 21.6% and Cuajone by 10.4%, driven by higher ore grades. Production at our Mexican operations increased by 0.6% during the same period, despite a 1.9% decline at the Buenavista mine due to water supply difficulties.

Molybdenum production increased by 15.1% in the first six months of 2024 compared to the same period in 2023. This rise was mainly due to higher production at our Toquepala mine (+74.2%), reflecting an increase in ore grades. Our

Buenavista (+8.4%) and Cuajone (+5.2%) mines also performed well during this period. Growth, however, was partially offset by lower production at the La Caridad mine, which saw a decrease of 6.9%.

Silver mine production increased by 8.2% in the first six months of 2024, primarily due to higher production at our Toquepala (+25.0%), La Caridad (+14.5%), Buenavista (+9.7%), and Cuajone (+5.9%) operations. This growth was slightly offset by a decline in production at our IMMSA operations (-0.4%).

Zinc production increased by 72.7% in the first six months of 2024. This growth was primarily driven by the production start-up at the Buenavista zinc concentrator, which produced 23,348 tonnes during the period.

**Operating Cash Costs:** An overall benchmark that we use, which is a common industry metric to measure performance is operating cash costs per pound of copper produced. Operating cash cost is a non-GAAP measure that does not have a standardized meaning and may not be comparable to similarly titled measures provided by other companies. This non-GAAP information should not be considered in isolation or as substitute for measures of performance determined in accordance with GAAP. A reconciliation of our operating cash cost per pound of copper produced to the cost of sales (exclusive of depreciation, amortization and depletion) as presented in the consolidated statement of earnings is presented under the subheading, “Non-GAAP Information Reconciliation” on page 57. We disclose operating cash cost per pound of copper produced, both before and net of by-product revenues.

We define ***operating cash cost per pound of copper produced before by-product revenues*** as cost of sales (exclusive of depreciation, amortization and depletion), plus selling, general and administrative charges, treatment and refining charges net of sales premiums; less the cost of purchased concentrates, workers’ participation and other miscellaneous charges, including royalty charges, and the change in inventory levels; divided by total pounds of copper produced by our own mines.

In our calculation of operating cash cost per pound of copper produced, we exclude depreciation, amortization and depletion, which are considered non-cash expenses. Exploration is considered a discretionary expenditure and is also excluded. Workers’ participation provisions are determined on the basis of pre-tax earnings and are also excluded. Additional exclusions from operating cash costs are items of a non-recurring nature and the mining royalty charge as it is based on various calculations of taxable income, depending on which jurisdiction, Peru or Mexico, is imposing the charge. We believe these adjustments allow our management and stakeholders to more fully visualize our controllable cash cost, which we believe is one of the lowest of all copper-producing companies of similar size.

We define ***operating cash cost per pound of copper produced net of by-product revenues*** as operating cash cost per pound of copper produced, as defined in the previous paragraph, less by-product revenues and net revenue (loss) on sale of metal purchased from third parties.

In our calculation of operating cash cost per pound of copper produced, net of by-product revenues, we credit against our costs the revenues from the sale of all our by-products, including, molybdenum, zinc, silver, gold, etc. and the net revenue (loss) on sale of metals purchased from third parties. We disclose this measure including the by-product revenues in this way because we consider our principal business to be the production and sale of copper. As part of our copper production process, much of our by-products are recovered. These by-products, as well as the processing of copper purchased from third parties, are a supplemental part of our production process and their sales value contribute to covering part of our incurred fixed costs. We believe that our Company is viewed by the investment community as a copper company, and is valued, in large part, by the investment community’s view of the copper market and our ability to produce copper at a reasonable cost.

We believe that both of these measures are useful tools for our management and our stakeholders. Our cash costs before by-product revenues allow us to monitor our cost structure and address areas of concern within operating management. The measure operating cash cost per pound of copper produced net of by-product revenues is a common measure used in the copper industry and is a useful management tool that allows us to track our performance and better allocate our resources. This measure is also used in our investment project evaluation process to determine a project’s potential contribution to our operations, its competitiveness and its relative strength in different price scenarios. The expected contribution of by-products is generally a significant factor used by the copper industry to determine whether to move forward or not in the development of a new mining project. As the price of our by-product commodities can have significant fluctuations from period to period, the value of its contribution to our costs can be volatile.

Our operating cash cost per pound of copper produced, before and net of by-product revenues, is presented in the table below for the three and six-month period ended June 30, 2024 and 2023:

### Operating cash cost per pound of copper produced (1)

### (In millions, except cost per pound and percentages)

| ​ ​ ​ | ​ ​ | ​ ​ ​ Three Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ ​ ​ % Change ​ | ​ ​ | ​ ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ ​ ​ % Change ​ | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | ---: | --- | ---: | --- | ---: | --- | ---: | ---: | --- |
| Total operating cash cost before by‑product revenues | ​ | $1,105.4 | ​ | $1,059.5 | ​ | $45.9 | 4.3% | ​ | $2,184.4 | ​ | $2,047.2 | ​ | $137.2 | 6.7% | ​ |
| Total by‑product revenues | ​ | $(716.4) | ​ | $(517.3) | ​ | $(199.1) | 38.5% | ​ | $(1,248.6) | ​ | $(1,147.9) | ​ | $(100.7) | 8.8% | ​ |
| Total operating cash cost net of by‑product revenues | ​ | $389.0 | ​ | $542.2 | ​ | $(153.2) | (28.3)% | ​ | $935.8 | ​ | $899.3 | ​ | $36.5 | 4.1% | ​ |
| Total pounds of copper produced(2) | ​ | 513.2 | ​ | 484.4 | ​ | 28.8 | 5.9% | ​ | 1,024.0 | ​ | 957.4 | ​ | 66.6 | 7.0% | ​ |
| **Operating cash cost per pound before by‑product revenues** | **​** | **$2.15** | **​** | **$2.19** | **​** | **$(0.04)** | **(1.6)%** | **​** | **$2.13** | **​** | **$2.14** | **​** | **$(0.01)** | **(0.3)%** | **​** |
| **By‑products per pound revenues** | **​** | **$(1.40)** | **​** | **$(1.07)** | **​** | **$(0.33)** | **30.5%** | **​** | **$(1.22)** | **​** | **$(1.20)** | **​** | **$(0.02)** | **1.6%** | **​** |
| **Operating cash cost per pound net of by‑product revenues** | **​** | **$0.76** | **​** | **$1.12** | **​** | **$(0.36)** | **(32.3)%** | **​** | **$0.91** | **​** | **$0.94** | **​** | **$(0.03)** | **(2.8)%** | **​** |

(1) These are non-GAAP measures. Please see page 57 for reconciliation to GAAP measure.

(2) Net of metallurgical losses.

In the second quarter of 2024 there was a slight decrease in operating cash cost per pound before by-product revenues, which fell from $2.19 to $2.15, indicating a minor improvement in production efficiency. By-product revenues per pound significantly increased from $1.07 to $1.40, resulting in a substantial reduction in operating cash cost per pound net of by-product revenues, which fell from $1.12 to $0.76. This reflects improved cost management and operational efficiency, with higher by-product revenues significantly offsetting overall production costs.

For the first six months of 2024, the operating cash cost per pound before by-product revenues slightly decreased from $2.14 to $2.13, a 0.3% improvement, even as total operating cash costs increased by 6.7% to $2,184.4 million. The increase of 1.6% in by-product revenues per pound helped reduce the operating cash cost per pound net of by-product revenues from $0.94 to $0.91, a 2.8% decrease. This growth was supported by a 7.0% increase in copper production, which totalled 1,024.0 million pounds at period-end versus 957.4 million pounds in the same period of 2023, and reflects the positive impacts of improvements in cost management and operational efficiency.

**Metal Prices:** The profitability of our operations is dependent on, and our financial performance is significantly affected by, the international market prices for the products we produce, and for copper, molybdenum, zinc and silver in particular.

We are subject to market risks arising from the volatility of copper and other metal prices. For the remaining nine months of 2024, assuming that expected metal production and sales are achieved, tax rates remain unchanged and no effects are generated by potential hedging programs, metal price sensitivity factors would indicate the following change in estimated net income attributable to SCC resulting from metal price changes:

| ​ ​ | ​ | ​ ​ Copper | ​ | ​ ​ Molybdenum | ​ | ​ ​ Zinc | ​ | ​ ​ Silver |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Change in metal prices (per pound except silver—per ounce) | ​ | $0.10 | ​ | $1.00 | ​ | $0.10 | ​ | $1.00 |
| Change in net earnings (in millions) | ​ | $62.8 | ​ | $16.9 | ​ | $11.3 | ​ | $6.7 |

**Business Segments:** We view our Company as having three reportable segments and manage it on the basis of these segments. These segments are (1) our Peruvian operations, (2) our Mexican open-pit operations and (3) our Mexican underground operations, known as our IMMSA unit. Our Peruvian operations include the Toquepala and Cuajone mine complexes and the smelting and refining plants, industrial railroad and port facilities that service both mines. The Peruvian operations produce copper, with significant by-product production of molybdenum, silver and other material. Our Mexican open-pit operations include La Caridad and Buenavista mine complexes, the smelting and refining plants and support facilities, which service both mines. The Mexican open pit operations produce copper, with significant by-product production of molybdenum, silver and other material. Our IMMSA unit includes five underground mines that produce zinc, lead, copper, silver and gold, and several industrial processing facilities for zinc, copper and silver.

Segment information is included in our review of “Results of Operations” in this item and also in Note 13 “Segment and Related Information” of our condensed consolidated financial statements.

**Inflation and Exchange Rate Effect of the Peruvian Sol and the Mexican Peso:** Our functional currency is the U.S. dollar and our revenues are primarily denominated in U.S. dollars. Significant portions of our operating costs are denominated in Peruvian sol and Mexican pesos. Accordingly, when inflation and currency devaluation/appreciation of the Peruvian currency and Mexican currency occur, our operating results can be affected. In recent years, exchange rate volatility has been high but has had a limited effect on our results. Please see Item 3. “Quantitative and Qualitative Disclosures about Market Risk” for more detailed information.

**Capital Investment Programs**: We made capital investments of $545.6 million in the first six months of 2024, compared to $490.6 million in the same period of 2023. In general, the capital investments and investment projects described below are intended to increase production, decrease costs or address social and environmental commitments.

Set forth below are descriptions of some of our current expected capital investment programs. We expect to meet the cash requirements for these projects by utilizing cash on hand; internally generated funds and additional external financing. All capital spending plans will continue to be reviewed and adjusted to respond to changes in the economy and market conditions.

**Projects in Mexico:**

El Pilar - Sonora: This low-capital intensity copper greenfield project is strategically located in Sonora, Mexico, approximately 45 kilometers from our Buenavista mine. Its copper oxide mineralization contains estimated proven and probable reserves of 317 million tonnes of ore with an average copper grade of 0.249%. We anticipate that El Pilar will operate as a conventional open-pit mine with an annual production capacity of 36,000 tonnes of copper cathodes. This operation will use highly cost efficient and environmentally friendly SX-EW technology. The budget for El Pilar is $310 million.

**Projects in Peru:**

Quebrada Honda dam expansion – Tacna: This project aims to enlarge the main and lateral dams in Quebrada Honda and includes the relocation and repowered of some facilities due to dam growth and implementation of other facilities for water recovery, among other factors. The drainage works and removal of Eolic material for the main and lateral dam, as well as complementary operational works are completed. We have also installed two cyclone nests for the main dam, which are currently operating. Additionally, purchases are pending for equipment for tailings hauling. We intend to build administrative facilities down the line. This project has a total budget of $165.0 million, of which we have invested $152.1 million as of June 30, 2024.

Tia Maria - Arequipa: This greenfield project, located in Arequipa, Peru, will use state of the art SX-EW technology with the highest international environmental standards to produce 120,000 tonnes of SX- EW copper cathodes per year. The Company is currently reviewing its budget of 1.4 billion, we expect to update this budget by year end.

The Company has consistently promoted the welfare of the population of the Islay province and the Arequipa region. As part of these efforts, we have implemented successful social programs in education, healthcare and productive development to improve the quality of life in the region.

Project update: On July 1, 2024, the Company has restarted activities at the Tía María project, which reflects advances on the social and political fronts in the province of Islay, the Arequipa region and at the national level. We reiterate our view that Tia Maria will generate significant economic and social opportunities for the Islay province and the Arequipa region. In 2024, the Company will, among other scheduled activities, install a live fence as well as 1,000 fog catchers. SCC will also roll out digging activities this year. All these activities will generate 350 direct jobs in 2024 for the local population. In 2025, we expect to begin mine construction, which will generate 1,100 direct jobs over the year. To the fullest extent possible, we intend to fill the 9,000 jobs that we expect to generate during Tia Maria’s construction with workers from the Islay province. We expect to start operations in 2027, at that time we will generate 600 direct jobs and 4,800 indirect jobs.

Our social programs in Islay totaled $6.3 million in the last two years. Our current programs promote a reduction in the cost of agricultural production by improving productivity with cutting-edge technology. On top of this, we are working to provide internet access to 4,600 school students. In addition to these efforts, we are currently committed to developing health facilities, high performance schools, research centers and roads in the Arequipa region via the “work for taxes” program.

Tia Maria will generate significant revenues for the Arequipa region from day one of its operations. At current copper prices, we expect to export $17.5 billion and contribute $3.4 billion in taxes and royalties during the first 20 years of operation.

### Potential projects:

We have a number of other projects that we may develop in the future. We continuously evaluate new projects on the basis of our long-term corporate objectives, expected return on investment, environmental concerns, required investment and estimated production, among other considerations. All capital spending plans will continue to be reviewed and adjusted to respond to changes in the economy and market conditions.

El Arco - Baja California: This is a world-class copper deposit located in the central part of the Baja California peninsula with ore reserves of over 1,230 million tonnes with an average ore grade of 0.40% and 141 million tonnes of leach material with an average ore grade of 0.27%. The project includes an open-pit mine with a combined concentrator and SX-EW operations. Annual production is expected to total 190,000 tonnes of copper and 105,000 ounces of gold.

Project update: The Company has completed the environmental baseline study for the mine, concentrator and industrial facilities and will proceed to submit the Environmental Impact Statement (Manifestacion de Impacto Ambiental “MIA”) to the Secretary of Environment and Natural Resources “SEMARNAT” to request the respective environmental impact permits. The Company is currently preparing studies for the port, power lines, townsites and auxiliary facilities.

Los Chancas - Apurimac: This greenfield project, located in Apurimac, Peru, is a copper and molybdenum porphyry deposit. Current estimates of indicated copper mineral resources are 98 million tonnes of oxides with a copper content of 0.45% and 52 million tonnes of sulfides with a copper content of 0.59%. The Los Chancas project envisions an open-pit mine with a combined operation of concentrator and SX-EW processes to produce 130,000 tonnes of copper and 7,500 tonnes of molybdenum annually. The estimated capital investment is $2,600 million and the project is expected to begin operating in 2030. We continue to engage in social and environmental improvements for the local communities and work on the project´s environmental impact assessment.

Project update: The Company continues to engage in coordinated efforts with the Peruvian authorities to eradicate illegal mining activity. Once this process is completed, we will resume the environmental impact assessment and initiate hydrogeological as well as geotechnical studies. We also will conduct a diamond drilling campaign for 40,000 meters to gather additional information on the characteristics of the Los Chancas deposit.

Michiquillay Project - Cajamarca: In June 2018, Southern Copper signed a contract for the acquisition of the Michiquillay project in Cajamarca, Peru. Michiquillay is a world class mining project with inferred mineral resources of 2,288 million tonnes with an estimated copper grade of 0.43%. When developed, we expect Michiquillay to produce 225,000 tonnes of copper per year (along with by-products of molybdenum, gold and silver) at a competitive cash-cost for an initial mine life of more than 25 years. We estimate an investment of approximately $2.5 billion will be required and expect production start-up by 2032. Michiquillay will become one of Peru´s largest copper mines and will create significant business opportunities in the Cajamarca region; generate new jobs for the local communities; and contribute with taxes and royalties to the local, regional and national governments.

Project update: As of June 30, 2024, total advancement on the exploration project stood at 30%. We had drilled 104,000 meters and obtained 33,991 core samples for chemical analysis. Diamond drilling is underway, which will provide data for cross-section interpretation, geological modeling and resource evaluation. We expect to begin hydrogeological and geotechnical studies soon, and will also assess the results of metallurgical testing at the deposit.

The Company continues to work with the Michiquillay and La Encañada communities based on the guidelines of corresponding social agreements.

The aforementioned information is based solely on estimates. We cannot make any assurances that we will undertake any of these projects or that the information noted is accurate.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) PRACTICES

**Renewable energy.** On August 1, 2024, the Company will start receiving eolic energy from the Fenicias wind park, operated by Grupo Mexico Infraestructura. This will reduce our CO2 emission by approximately 250.000 tons per year, which is a 7% reduction in SCC’s carbon footprint.

**Transparency and accountability.** SCC recently published its second Sustainability Development Report. This year, we significantly improved the granularity and specificity of information on our commitment to and development of efforts on the environmental, social and governance fronts.

**Responsible production.** Our Buenavista mine in Sonora, Mexico has received Copper Mark and the Zinc Mark certifications for responsible production following a third-party independent evaluation of our performance in environmental, social and governance (ESG) matters. Consequently, the vast majority of our open pit Mexican copper production now complies with Copper and Zinc Mark standards.

**Education.** Our IMPULSA program seeks to provide our workers in Mexico with opportunities to qualify for certification of attainment of primary and secondary education and bachelors degrees. From 2022 to date, more than 970 people have participated in this program and 430 have successfully graduated. Currently, there are 540 workers actively participating in the IMPULSA program.

**Human Development.** Our coach and sports advisor for our swimming team at the Sonora operations, Jorge Iga, has qualified for the Paris 2024 Olympic Games after breaking the Mexican record for the 100-meter freestyle. Thanks to Mr. Iga's support, in 2024, 17 students from our academies participated in 6 top-level competitions.

ACCOUNTING ESTIMATES

Our discussion and analysis of financial condition and results of operations, as well as quantitative and qualitative disclosures about market risks, are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Preparation of these consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We make our best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include: ore reserves, revenue recognition, ore stockpiles on leach pads and related amortization, estimated impairment of assets, asset retirement obligations, determination of discount rates related to the financial lease liabilities, classification of operating leases versus financial leases, valuation allowances for deferred tax assets, unrecognized tax benefits and fair value of financial instruments. We base our estimates on historical experience and on various other assumptions that we believe reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

NEW ACCOUNTING DISCLOSURE RULES

The U.S. Securities and Exchange Commission released its final climate disclosure rule in March 2024. It requires that, when material, annual reports and registration statements include disclosures about greenhouse gas emissions under Scope 1 and Scope 2 as well as other climate-related subjects. The requirements for disclosure will begin phasing in for fiscal years beginning on or after January 1, 2025. As we examine the new rule's impacts, we anticipate updating the climate-related disclosures in our Form 10-K for the fiscal year of adoption when defined.

RESULTS OF OPERATIONS

The following highlights key financial results for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ ​ Statement of Earnings Data | ​ ​ | ​ ​ Three Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ | ​ ​ ​ ​ % Change ​ | ​ ​ | ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ | ​ ​ ​ ​ % Change ​ | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Net sales | ​ | $3,118.3 | ​ | $2,300.7 | ​ | $817.6 | ​ | $35.5% | ​ | $5,718.1 | ​ | $5,094.6 | ​ | $623.5 | ​ | $12.2% | ​ |
| Operating costs and expenses | ​ | (1,511.0) | ​ | (1,400.0) | ​ | (111.0) | ​ | 7.9% | ​ | (2,921.1) | ​ | (2,840.2) | ​ | (80.9) | ​ | 2.8% | ​ |
| Operating income | ​ | 1,607.3 | ​ | 900.7 | ​ | 706.6 | ​ | 78.5% | ​ | 2,797.0 | ​ | 2,254.4 | ​ | 542.6 | ​ | 24.1% | ​ |
| Non‑operating income (expense) | ​ | (76.7) | ​ | (52.8) | ​ | (23.9) | ​ | 45.2% | ​ | (110.8) | ​ | (103.7) | ​ | (7.1) | ​ | 6.9% | ​ |
| Income before income taxes | ​ | 1,530.6 | ​ | 847.9 | ​ | 682.7 | ​ | 80.5% | ​ | 2,686.2 | ​ | 2,150.7 | ​ | 535.5 | ​ | 24.9% | ​ |
| Income taxes | ​ | (578.8) | ​ | ​ (294.5) | ​ | ​ (284.3) | ​ | ​ 96.5% | ​ | ​ (1,002.1) | ​ | ​ (774.9) | ​ | ​ (227.2) | ​ | ​ 29.3% | ​ |
| Equity earnings of affiliate | ​ | 2.0 | ​ | ​ (3.8) | ​ | ​ 5.8 | ​ | ​ (152.6)% | ​ | ​ 8.6 | ​ | ​ (10.2) | ​ | ​ 18.8 | ​ | ​ (184.3)% | ​ |
| Net income attributable to non‑controlling interest | ​ | (3.6) | ​ | (2.1) | ​ | (1.5) | ​ | 71.4% | ​ | (6.4) | ​ | (4.9) | ​ | (1.5) | ​ | 30.6% | ​ |
| Net income attributable to SCC | ​ | $950.2 | ​ | $547.5 | ​ | $402.7 | ​ | $73.6% | ​ | $1,686.2 | ​ | $1,360.7 | ​ | $325.5 | ​ | $23.9% | ​ |

#### NET SALES

In the second quarter of 2024 totaled $3,118.3 million, which represented an increase of 35.5% compared to net sales in the same period of 2023. This increase was influenced by higher prices of copper (+14.8%, LME), molybdenum (+3.9%), zinc (+12.2%) and silver (+18.9%), as well as increase in sales volumes of copper (+5.5%), molybdenum (+21.4%), zinc (+78.1) and silver (+31.6%). The increase in the sales volumes of zinc was mainly driven by Buenavista Zinc, which began operating at full capacity.

For the first half of 2024, net sales increased by 12.2% compared to the same period in 2023. This increase was driven by higher prices for copper (+4.6%, LME) and silver (+11.5%), as well as higher sales volumes of copper (+4.1%), molybdenum (+14.8%), zinc (+33.7%), and silver (+12.0%). This was partially offset by a decrease in prices for molybdenum (-21.5%) and zinc (-7.0%).

The table below outlines the average published market metal prices for our metals for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ ​ | ​ | ​ ​ Three Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ % Change ​ | ​ | ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ % Change ​ | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Copper price ($per pound—LME) | ​ | $4.42 | ​ | $3.85 | ​ | 14.8% | ​ | $4.13 | ​ | $3.95 | ​ | 4.6% | ​ |
| Copper price ($per pound—COMEX) | ​ | $4.55 | ​ | $3.85 | ​ | 18.2% | ​ | $4.21 | ​ | $3.97 | ​ | 6.0% | ​ |
| Molybdenum price ($per pound)(1) | ​ | $21.69 | ​ | $20.87 | ​ | 3.9% | ​ | $20.77 | ​ | $26.45 | ​ | (21.5)% | ​ |
| Zinc price ($per pound—LME) | ​ | $1.29 | ​ | $1.15 | ​ | 12.2% | ​ | $1.20 | ​ | $1.29 | ​ | (7.0)% | ​ |
| Silver price ($per ounce—COMEX) | ​ | $28.84 | ​ | $24.26 | ​ | 18.9% | ​ | $26.09 | ​ | $23.40 | ​ | 11.5% | ​ |

(1) Platts Metals Week Dealer Oxide

The table below provides our metal sales as a percentage of our total net sales for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ ​ ​ Sales as a percentage of total net sales | ​ ​ Three Months Ended June 30, 2024 | ​ ​ ​ ​ 2023 | ​ ​ ​ ​ Six Months Ended ​ June 30, 2024 | ​ ​ ​ 2023 ​ |
| --- | ---: | ---: | ---: | ---: |
| Copper | 75.9% | 77.5% | 77.1% | 77.1% |
| Molybdenum | 12.2% | 11.1% | 11.4% | 10.9% |
| Silver | 5.0% | 4.3% | 4.7% | 4.2% |
| Zinc | 3.7% | 2.7% | 3.2% | 3.0% |
| Other by‑products | 3.2% | 4.4% | 3.6% | 4.8% |
| **Total** | 100.0% | 100.0% | 100.0% | 100.0% |

The table below provides our copper sales by type of product for the three and six-month period ended June 30, 2024 and 2023. The difference in value between products is the level of processing. At the market price, concentrates take a discount since they require smelting and refining processes, while refined and rod copper receive premiums due to their purity and presentation.

| ​ ​ Copper Sales (million pounds) | ​ | ​ Three Months Ended June 30, 2024 | ​ | ​ 2023 | ​ | ​ Variance | ​ | ​ ​ ​ % Change ​ | ​ | ​ Six Months Ended June 30, 2024 | ​ | ​ 2023 | ​ | ​ Variance | ​ | ​ ​ ​ % Change ​ | ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Refined (including SX‑EW) | ​ | 250.2 | ​ | 254.8 | ​ | (4.6) | ​ | (1.8)% | ​ | 517.6 | ​ | 535.9 | ​ | (18.3) | ​ | (3.4)% | ​ |
| Rod | ​ | 88.9 | ​ | 83.9 | ​ | 5.0 | ​ | 6.0% | ​ | 180.7 | ​ | 174.1 | ​ | 6.6 | ​ | 3.8% | ​ |
| Concentrates and other | ​ | 170.1 | ​ | 144.1 | ​ | 26.0 | ​ | 18.1% | ​ | 329.6 | ​ | 277.1 | ​ | 52.5 | ​ | 18.9% | ​ |
| **Total** | ​ | 509.3 | ​ | 482.8 | ​ | 26.5 | ​ | 5.5% | ​ | 1,027.9 | ​ | 987.1 | ​ | 40.8 | ​ | 4.1% | ​ |

The table below provides our copper sales volume by type of product as a percentage of our total copper sales volume for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ ​ Copper Sales by product type | ​ ​ Three months ended June 30, 2024 | ​ ​ ​ 2023 ​ | ​ ​ ​ ​ Six months ended June 30, 2024 | ​ ​ 2023 |
| --- | ---: | ---: | ---: | ---: |
| Refined (including SX‑EW) | 49.1% | 52.8% | 50.4% | 54.3% |
| Rod | 17.5% | 17.4% | 17.6% | 17.6% |
| Concentrates and other | 33.4% | 29.8% | 32.1% | 28.1% |
| **Total** | 100.0% | 100.0% | 100.0% | 100.0% |

#### OPERATING COSTS AND EXPENSES

The table below summarizes the production cost structure by major components as a percentage of total production cost:

| ​ ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2024 | ​ ​ ​ 2023 ​ | ​ ​ ​ Six months ended June 30, ​ 2024 | ​ ​ ​ 2023 ​ |
| --- | ---: | ---: | ---: | ---: |
| Power | 11.6% | 14.0% | 14.3% | 14.3% |
| Labor | 11.9% | 11.6% | 11.3% | 11.3% |
| Fuel | 15.9% | 14.9% | 15.2% | 15.2% |
| Maintenance | 22.8% | 21.2% | 21.2% | 21.2% |
| Operating material | 19.2% | 19.9% | 20.3% | 20.3% |
| Other | 18.6% | 18.4% | 17.7% | 17.7% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% |

Second quarter: Operating costs and expenses were $1,511.0 million in the second quarter of 2024 compared to $1,400.0 million in the same period of 2023. The increase of $111.0 million was primarily due to:

| ​ | ​ ​ | ​ | ​ ​ |
| --- | --- | ---: | --- |
| ​ | Operating cost and expenses for the second quarter of 2023 |  | $1,400.0 |
| ​ | Plus: | ​ | ​ ​ |
| ​ | • Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | 90.4 |
| ​ | ​ - Workers participation | 27.5 | ​ ​ |
| ​ | ​ - Repairing materials, principally heavy equipment spare parts | 26.3 | ​ ​ |
| ​ | ​ - Fuel | 16.5 | ​ ​ |
| ​ | ​ - Operations contractors | 14.3 | ​ ​ |
| ​ | ​ - Freight | 12.0 | ​ ​ |
| ​ | ​ - Labor costs | 9.8 | ​ ​ |
| ​ | ​ - Inventory variance | 9.3 | ​ ​ |
| ​ | ​ - Sales expenses | 8.6 | ​ ​ |
| ​ | ​ - Other net | 3.3 | ​ ​ |
| ​ | ​ This was partially offset by a decrease in: | ​ | ​ ​ |
| ​ | ​ - Energy costs | (31.9) | ​ ​ |
| ​ | ​ - Leachable material | (5.3) | ​ ​ |
| ​ | • Increase in the volume and cost of metals purchased from third parties. | ​ | ​ 10.8 |
| ​ | • Increase in exploration expense. | ​ | ​ 6.5 |
| ​ | • Increase in selling, general and administrative expenses. | ​ | ​ 2.9 |
| ​ | • Increase in depreciation, amortization and depletion expense. | ​ | ​ 0.4 |
| ​ | Operating cost and expenses for the second quarter of 2024 | ​ | $1,511.0 |

Six months: Operating costs and expenses were $2,921.1 million in the first six months of 2024 compared to $2,840.2 million in the same period of 2023. The increase of $80.9 million was primarily due to:

| ​ ​ | ​ | ​ ​ |
| --- | ---: | --- |
| Operating cost and expenses for the first six months of 2023 |  | $2,840.2 |
| Plus: | ​ | ​ ​ |
| • Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | ​ 81.6 |
| ​ - Repairing materials, principally heavy equipment spare parts | 58.8 | ​ ​ |
| ​ - Fuel | 32.7 | ​ ​ |
| ​ - Labor costs | 25.4 | ​ ​ |
| ​ - Operations contractors | 22.5 | ​ ​ |
| ​ - Workers participation | 14.6 | ​ ​ |
| ​ - Other net | 4.0 | ​ ​ |
| ​ This was partially offset by a decrease in: | ​ | ​ ​ |
| ​ - Energy costs | (35.3) | ​ ​ |
| ​ - Inventory variance | (28.8) | ​ ​ |
| ​ - Leachable material | (12.3) | ​ ​ |
| • Increase in exploration expense. |  | 7.1 |
| • Increase in depreciation, amortization and depletion expense. | ​ | ​ 5.7 |
| • Decrease in selling, general and administrative expenses. | ​ | 3.4 |
| Less: ​ | ​ | ​ ​ |
| • Decrease in the volume and cost of metals purchased from third parties. | ​ | (17.0) |
| Operating cost and expenses for the first six months of 2024 | ​ | $2,921.1 |

#### NON-OPERATING INCOME (EXPENSES)

Non-operating income (expense) represented a net expense of $76.7 million and $110.8 million in the three and six months ended on June 30, 2024 compared to a net expense of $52.8 million and $103.7 million in the three and six months ended June 30, 2023.

Second quarter: The $23.9 million increase in the expense level was due to:

- $25.5 million increase in other expenses, which includes a $4.0 million inventory write-off and $4.0 million provision for legal liabilities
- $1.7 million increase in interest expense, net of capitalized interest and
- $3.3 million increase in interest income.

Six months: The $7.1 million increase in the expense level was principally due to:

- $17.0 million increase in other expense expenses,
- $0.6 million decrease in interest expense net of capitalized interest, and
- $9.3 million increase in interest income,

#### INCOME TAXES

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ Six Months Ended June 30, 2024 | ​ ​ ​ ​ 2023 ​ |
| --- | --- | ---: | ---: |
| Provision for income taxes ($in millions) | ​ | $1,002.1 ​ | $774.9 ​ |
| Effective income tax rate | ​ | 37.3% | 36.0% |

In addition to the income taxes of Peru, Mexico and the United States, the provision for income taxes also includes the mining royalties from Peru and Mexico and the Peruvian special mining tax.

#### SEGMENT RESULT ANALYSIS

We have three segments: the Peruvian operations, the Mexican open-pit operations and the Mexican underground mining operations.

The table below presents information regarding the volume of our copper sales by segment for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ Copper Sales (million pounds) | ​ | ​ ​ Three Months Ended June 30, 2024 | ​ 2023 | ​ | ​ ​ Variance | ​ ​ ​ % Change ​ | ​ | ​ ​ Six Months Ended June 30, 2024 | ​ 2023 | ​ | ​ ​ Variance | ​ ​ ​ % Change ​ | ​ ​ |
| --- | --- | ---: | ---: | --- | ---: | ---: | --- | ---: | ---: | --- | ---: | ---: | --- |
| Peruvian operations | ​ | 222.6 | 195.0 | ​ | 27.6 | 14.2% | ​ | 437.6 | 382.8 | ​ | 54.8 | 14.3% | ​ |
| Mexican open‑pit | ​ | 292.1 | 287.1 | ​ | 5.0 | 1.7% | ​ | 599.2 | 603.0 | ​ | (3.8) | (0.6)% | ​ |
| Mexican IMMSA unit | ​ | 9.7 | 5.9 | ​ | 3.8 | 64.4% | ​ | 17.6 | 11.2 | ​ | 6.4 | 57.1% | ​ |
| Other and intersegment elimination | ​ | (15.1) | (5.2) | ​ | (9.9) | 190.4% | ​ | (26.6) | (9.9) | ​ | (16.7) | 168.7% | ​ |
| Total copper sales | ​ | 509.3 | 482.8 | ​ | 26.5 | 5.5% | ​ | 1,027.8 | 987.1 | ​ | 40.7 | 4.1% | ​ |

The table below presents information regarding the volume of sales by segment of our significant by-products for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ By‑product Sales (million pounds, except silver—million ounces) Peruvian operations: | ​ ​ ​ | ​ Three Months Ended June 30, 2024 ​ | ​ ​ | ​ 2023 ​ | ​ ​ | ​ Variance ​ | ​ ​ | ​ ​ ​ % Change ​ ​ ​ | ​ ​ ​ | ​ Six Months Ended June 30, 2024 ​ | ​ ​ | ​ 2023 ​ | ​ ​ | ​ ​ Variance ​ ​ | ​ ​ ​ % Change ​ ​ ​ | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | ---: | --- |
| Molybdenum contained in concentrate | ​ | 7.5 | ​ | 4.9 | ​ | 2.6 |  | 53.1% | ​ | 14.8 | ​ | 10.3 | ​ | 4.5 | 43.7% |  |
| Silver | ​ | 1.5 | ​ | 1.1 | ​ | 0.4 |  | 36.4% | ​ | 2.9 | ​ | 2.2 | ​ | 0.7 | 31.8% |  |
| Mexican open‑pit operations: | ​ | ​ | ​ | ​ | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |
| Molybdenum contained in concentrate | ​ | 9.4 | ​ | 9.0 | ​ | 0.4 |  | 4.4% | ​ | 17.6 | ​ | 17.9 | ​ | (0.3) | (1.7)% |  |
| Zinc‑refined and in concentrate | ​ | 39.4 | ​ | — | ​ | 39.4 | ​ | —% | ​ | 44.2 | ​ | — | ​ | 44.2 | —% | ​ |
| Silver | ​ | 3.0 | ​ | 2.2 | ​ | 0.8 |  | 36.4% | ​ | 5.9 | ​ | 5.1 | ​ | 0.8 | 15.7% |  |
| IMMSA unit | ​ | ​ | ​ | ​ | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |
| Zinc‑refined and in concentrate | ​ | 46.6 | ​ | 48.3 | ​ | (1.7) |  | (3.5)% | ​ | 98.3 | ​ | 106.6 | ​ | (8.3) | (7.8)% |  |
| Silver | ​ | 1.6 | ​ | 1.6 | ​ | — |  | —% | ​ | 3.3 | ​ | 3.5 | ​ | (0.2) | (5.7)% |  |
| Other and intersegment elimination | ​ | ​ | ​ | ​ | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |
| Silver | ​ | (0.8) | ​ | (0.8) | ​ | — |  | —% | ​ | (1.7) | ​ | (1.6) | ​ | (0.1) | 6.3% |  |
| Total by‑product sales | ​ | ​ | ​ | ​ | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |
| Molybdenum contained in concentrate | ​ | 16.9 | ​ | 13.9 | ​ | 3.0 |  | 21.4% | ​ | 32.4 | ​ | 28.2 | ​ | 4.2 | 14.8% |  |
| Zinc‑refined and in concentrate | ​ | 86.0 | ​ | 48.3 | ​ | 37.7 |  | 78.1% | ​ | 142.5 | ​ | 106.6 | ​ | 35.9 | 33.7% |  |
| Silver | ​ | 5.3 | ​ | 4.1 | ​ | 1.2 |  | 31.6% | ​ | 10.4 | ​ | 9.2 | ​ | 1.2 | 12.0% |  |

### Peruvian Open-pit Operations:

| ​ ​ ​ | ​ ​ | ​ ​ Three Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ Variance | ​ ​ | ​ % Change | ​ ​ ​ ​ | ​ ​ | ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ Variance | ​ | ​ % Change | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: |
| Net sales | ​ | $1,246.7 | ​ | $886.9 | ​ | $359.8 | ​ | ​ | 40.6% | ​ | $2,275.4 | ​ | $1,912.6 | ​ | $362.8 | ​ | ​ | 19.0% |
| Operating costs and expenses | ​ | (626.3) | ​ | (570.2) | ​ | (56.1) | ​ |  | 9.8% | ​ | (1,197.5) | ​ | (1,146.7) | ​ | (50.8) | ​ | ​ | 4.4% |
| Operating income | ​ | $620.4 | ​ | $316.7 | ​ | $303.7 | ​ | ​ | 95.9% | ​ | $1,077.9 | ​ | $765.9 | ​ | $312.0 | ​ | ​ | 40.7% |

Net sales in the second quarter of 2024 increased $359.8 million compared to the same period in 2023. This remarkable growth was fueled by increased sales volumes of copper (+14.2%), molybdenum (+53.1%), and silver (+36.4%). Higher prices for copper (+14.8%, LME), molybdenum (+3.9%), and silver (+18.9%) also helped boost this performance.

Operating costs and expenses were $626.3 million in the second quarter of 2024 compared to $570.2 million in the same period of 2023. The increase of $56.1 million was primarily due to:

| ​ | ​ ​ | ​ | ​ ​ |
| --- | --- | ---: | --- |
| ​ | Operating costs and expenses for the second quarter of 2023 |  | $570.2 |
| ​ | Plus | ​ | ​ ​ |
| ​ | • Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | 51.3 |
| ​ | ​ - Workers participation | 30.2 | ​ ​ |
| ​ | ​ - Repairing materials, principally heavy equipment spare parts | 15.4 | ​ ​ |
| ​ | ​ - Fuel | 6.9 | ​ ​ |
| ​ | ​ - Mining royalties | 3.6 | ​ ​ |
| ​ | ​ - Labor costs | 3.6 | ​ ​ |
| ​ | ​ - Other net | 3.1 | ​ ​ |
| ​ | ​ - Energy costs | 2.3 | ​ ​ |
| ​ | ​ This was partially offset by a decrease in: | ​ | ​ ​ |
| ​ | ​ - Inventory variance | (9.7) | ​ ​ |
| ​ | ​ - Leachable material | (2.7) | ​ ​ |
| ​ | ​ - Sales expenses | (1.4) | ​ ​ |
| ​ | • Increase in cost of metals purchased from third parties. | ​ | ​ 4.4 |
| ​ | • Increase in exploration expenses. | ​ | ​ 3.2 |
| ​ | • Increase in selling, general and administrative expenses. | ​ | ​ 0.2 |
| ​ | Less: | ​ |  |
| ​ | • Decrease in depreciation, amortization and depletion expense. | ​ | (3.0) |
| ​ | Operating costs and expenses for the second quarter of 2024 | ​ | $626.3 |

Net sales in the first six months of 2024 increased by $362.8 million compared to the same period in 2023. This growth primarily reflects positive developments in metal prices for copper (+4.6%, LME) and silver (+11.5%). An uptick in sales volumes of copper (+14.3%), molybdenum (+43.7%), and silver (+31.8%) also played a role in this performance. However, this was partially offset by a decrease in molybdenum prices (-21.5%).

Operating costs and expenses in the first six months of 2024 increased by $50.8 million to $1,197.5 million compared to $1,146.7 million in the same period of 2023. This was primarily due to:

| ​ | ​ ​ | ​ | ​ ​ |
| --- | --- | ---: | --- |
| ​ | Operating costs and expenses for the first six months of 2023 |  | $1,146.7 |
| ​ | Plus: ​ | ​ | ​ ​ |
| ​ | • Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | ​ 36.8 |
| ​ | ​ - Repairing materials, principally heavy equipment spare parts | 30.5 | ​ ​ |
| ​ | ​ - Workers participation | 22.4 | ​ ​ |
| ​ | ​ - Fuel | 7.6 | ​ ​ |
| ​ | ​ - Labor costs | 7.3 | ​ ​ |
| ​ | ​ - Energy costs | 4.2 | ​ ​ |
| ​ | ​ - Other net | 1.9 | ​ ​ |
| ​ | ​ This was partially offset by a decrease in: | ​ | ​ ​ |
| ​ | ​ - Inventory variance | (21.0) | ​ ​ |
| ​ | ​ - Sales expenses | (11.6) | ​ ​ |
| ​ | ​ - Leachable material | (4.5) | ​ ​ |
| ​ | • Increase in cost of metals purchased from third parties. | ​ | ​ 12.2 |
| ​ | • Increase in exploration expenses. | ​ | 4.4 |
| ​ | • Increase in selling, general and administrative expenses. | ​ | ​ 0.6 |
| ​ | Less: | ​ | ​ |
| ​ | • Decrease in depreciation, amortization and depletion expense. | ​ | ​ (3.2) |
| ​ | Operating costs and expenses for the first six months of 2024 | ​ | $1,197.5 |

Mexican Open-pit Operations:

| ​ ​ ​ | ​ ​ Three Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ Variance | ​ ​ | ​ % Change | ​ ​ ​ | ​ ​ ​ | ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ Variance | ​ ​ | ​ % Change | ​ ​ ​ ​ | ​ ​ ​ |
| --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: | --- |
| Net sales | $1,738.5 | ​ | $1,311.2 | ​ | $427.3 | ​ | ​ | 32.6% | ​ | $3,204.4 | ​ | $2,938.1 | ​ | $266.3 | ​ | ​ | 9.1% | ​ |
| Operating costs and expenses | (786.1) | ​ | (706.0) | ​ | (80.1) | ​ |  | 11.3% | ​ | (1,501.1) | ​ | (1,417.1) | ​ | (84.0) | ​ |  | 5.9% | ​ |
| Operating income | $952.4 | ​ | $605.2 | ​ | $347.2 | ​ | ​ | 57.4% | ​ | $1,703.3 | ​ | $1,521.0 | ​ | $182.3 | ​ | ​ | 12.0% | ​ |

Net sales in the second quarter of 2024 increased by $427.3 million compared to the same period in 2023. This significant increase was driven by higher prices for copper (+14.8%, LME), molybdenum (+3.9%), zinc (+12.2%), and silver (+18.9%). Growth in sales volumes of copper (+1.7%), molybdenum (+4.4%), and silver (+36.4%) also drove this strong performance. The start-up of the Buenavista zinc concentrator also played a crucial role, with zinc sales volumes reaching 39.4 million pounds for the period.

Operating costs and expenses were $786.1 million in the second quarter of 2024 compared to $706.0 million in the same period of 2023. The increase of $80.1 million was primarily due to:

| ​ | ​ ​ | ​ | ​ ​ |
| --- | --- | ---: | --- |
| ​ | Operating costs and expenses for the second quarter of 2023 |  | $706.0 |
| ​ | Less: | ​ |  |
| ​ | • Decrease in worker participation expense. | ​ | ​ (9.6) |
| ​ | • Decrease in cost of metals purchased from third parties. | ​ | 24.7 |
| ​ | Plus: | ​ | ​ ​ |
| ​ | • Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | 75.9 |
| ​ | ​ - Foreign currency effect | 37.8 | ​ ​ |
| ​ | ​ - Inventory variance | 15.6 | ​ ​ |
| ​ | ​ - Freight | 11.8 | ​ ​ |
| ​ | ​ - Repairing materials | 11.5 | ​ ​ |
| ​ | ​ - Fuel | 9.5 | ​ ​ |
| ​ | ​ - Sales expenses | 8.1 | ​ ​ |
| ​ | ​ - Other net | 6.6 | ​ ​ |
| ​ | ​ - Operations contractors | 6.3 | ​ ​ |
| ​ | ​ - Labor costs | 3.6 | ​ ​ |
| ​ | ​ - Reagents | 3.2 | ​ ​ |
| ​ | ​ This was partially offset by a decrease in: | ​ | ​ ​ |
| ​ | ​ - Energy costs | (35.5) | ​ ​ |
| ​ | ​ - Leachable material | (2.6) | ​ ​ |
| ​ | • Increase in depreciation, amortization and depletion expense. | ​ | ​ (13.1) |
| ​ | • Increase in selling, general and administrative expenses. | ​ | ​ 1.2 |
| ​ | • Increase in exploration expenses. | ​ | 1.0 |
| ​ | Operating costs and expenses for the second quarter of 2024 | ​ | $786.1 |

Net sales in the first six months of 2024 increased by $266.3 million compared to the same period in 2023. This growth primarily reflects positive developments for metal prices, namely copper (+4.6%, LME) and silver (+11.5%). Additionally, growth in the sales volumes of silver (+15.7%) also contributed to this performance. Start-up at the Buenavista zinc concentrator also played a crucial role, with zinc sales volumes reaching 44.2 million pounds for the period. However, this was partially offset by decreases in molybdenum (-21.5%) and zinc (-7.0%) prices, as well as declines in sales volumes of copper (-0.6%) and molybdenum (-1.7%).

Operating costs and expenses in the first six months of 2024 increased by $84.0 million to $1,501.1 million compared to $1,417.1 million in the same period of 2023. This was primarily due to:

| ​ | ​ ​ | ​ | ​ ​ |
| --- | --- | --- | --- |
| ​ | Operating costs and expenses for the first six months of 2023 |  | $1,417.1 |
| ​ | Less: | ​ | ​ ​ |
| ​ | • Decrease in worker participation expense. | ​ | ​ (14.6) |
| ​ | • Decrease in cost of metals purchased from third parties. | ​ | ​ 0.6 |
| ​ | • Decrease in depreciation, amortization and depletion expense. | ​ | 11.1 |
| ​ | Plus: | ​ | ​ |
| ​ | • Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | 81.2 |
| ​ | ​ - Foreign currency effect | 50.9 | ​ ​ |
| ​ | ​ - Inventory variance | 8.5 | ​ ​ |
| ​ | ​ - Repairing materials | 28.6 | ​ ​ |
| ​ | ​ - Fuel | 24.3 | ​ ​ |
| ​ | ​ - Sales expenses | 8.5 | ​ ​ |
| ​ | ​ - Other net | 2.5 | ​ ​ |
| ​ | ​ - Labor costs | 11.1 | ​ ​ |
| ​ | ​ This was partially offset by a decrease in: | ​ | ​ ​ |
| ​ | ​ - Energy costs | (45.4) | ​ ​ |
| ​ | ​ - Leachable material | (7.8) | ​ ​ |
| ​ | • Increase in selling, general and administrative expenses. | ​ | 2.4 |
| ​ | • Increase in exploration expenses. | ​ | ​ 3.3 |
| ​ | Operating costs and expenses for the first six months of 2024 | ​ | $1,501.1 |

Mexican Underground Operations (IMMSA):

| ​ ​ ​ | ​ ​ Three Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ Variance | ​ ​ | ​ % Change | ​ ​ ​ | ​ | ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ Variance | ​ ​ | ​ % Change | ​ ​ ​ | ​ ​ ​ |
| --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: | --- |
| Net sales | $185.2 | ​ | $141.2 | ​ | $44.0 | ​ | ​ | 31.2% | ​ | $331.6 | ​ | $320.7 | ​ | $10.9 | ​ | ​ | 3.4% | ​ |
| Operating costs and expenses | (134.1) | ​ | (144.1) | ​ | 10.0 | ​ |  | (6.9)% | ​ | (287.3) | ​ | (322.2) | ​ | 34.9 | ​ |  | (10.8)% | ​ |
| Operating income | $51.1 | ​ | $(2.9) | ​ | $54.0 | ​ | ​ | (1,862.1)% | ​ | $44.4 | ​ | $(1.5) | ​ | $45.9 | ​ | ​ | (3,057.6)% | ​ |

Net sales in the second quarter of 2024 increased by $44.0 million compared to the same period in 2023. This notable growth was driven by higher prices for copper (+14.8%, LME), zinc (+12.2%), and silver (+18.9%). Growth in sales volumes of copper (+64.4%) as contributed significantly to this performance. However, this was partially offset by a decrease in sales volumes of zinc (-3.5%).

Operating costs and expenses were $134.1 million in the second quarter of 2024 compared to $144.1 million in the same period of 2023. The decrease of $10.0 million was primarily due to:

| ​ ​ | ​ | ​ ​ |
| --- | --- | --- |
| Operating costs and expenses for the second quarter of 2023 |  | $144.1 |
| Less: ​ | ​ | ​ |
| • Decrease in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | (8.9) |
| ​ - Foreign currency effect | (20.1) | ​ ​ |
| ​ - Operations contractors | (3.2) | ​ ​ |
| ​ This was partially offset by an increase in: | ​ | ​ ​ |
| ​ - Workers participation | 5.3 | ​ ​ |
| ​ - Inventory variance | 3.4 | ​ ​ |
| ​ - Other net | 3.1 | ​ ​ |
| ​ - Labor costs | 2.6 | ​ ​ |
| • Decrease in cost of metals purchased from third parties. | ​ | ​ (3.9) |
| Plus: ​ | ​ | ​ ​ |
| • Increase in selling, general and administrative expenses. | ​ | 1.0 |
| • Increase in depreciation, amortization and depletion expense. | ​ | ​ 0.9 |
| • Increase in exploration expenses. | ​ | ​ 0.9 |
| Operating costs and expenses for the second quarter of 2024 | ​ | $134.1 |

Net sales in the first six months of 2024 increased by $10.9 million compared to the same period in 2023. This growth primarily reflects positive developments in metal prices, such as copper (+4.6%, LME) and silver (+11.5%). Growth in sales volumes of copper (+57.1%) contributed to this performance. However, this was partially offset by decreases in zinc prices (-7.0%) as well as a decrease in sales volumes of zinc (-7.8%) and silver (-5.7%).

Operating costs and expenses in the first six months of 2024 decreased by $34.9 million to $287.3 million compared to $322.2 million in the same period of 2023. This was primarily due to:

| ​ ​ | ​ | ​ ​ |
| --- | --- | --- |
| Operating costs and expenses for the first six months of 2023 |  | $322.2 |
| Less: ​ | ​ | ​ |
| • Decrease in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: | ​ | (25.6) |
| ​ - Foreign currency effect | (25.3) | ​ ​ |
| ​ - Inventory variance | (16.3) | ​ ​ |
| ​ This was partially offset by an increase in: | ​ | ​ ​ |
| ​ - Energy costs | 5.9 | ​ ​ |
| ​ - Workers participation | 5.0 | ​ ​ |
| ​ - Sales expenses | 3.7 | ​ ​ |
| ​ - Other net | 1.4 | ​ ​ |
| • Decrease in cost of metals purchased from third parties. | ​ | (13.0) |
| Plus: ​ | ​ | ​ ​ |
| • Increase in depreciation, amortization and depletion expense. | ​ | ​ 2.6 |
| • Increase in selling, general and administrative expenses. | ​ | ​ 0.6 |
| • Increase in exploration expenses. | ​ | ​ 0.5 |
| Operating costs and expenses for the first six months of 2024 | ​ | $287.3 |

#### Intersegment Eliminations and Adjustments:

The net sales, operating costs and expenses and operating income discussed above will not be directly equal to amounts in our condensed consolidated statement of earnings because the adjustments of intersegment operating revenues and expenses must be taken into account. Please see Note 13 “Segment and Related Information” of the condensed consolidated financial statements.

### LIQUIDITY AND CAPITAL RESOURCES

### Cash flow:

The following table shows the cash flow for the six-month period ended June 30, 2024 and 2023 (in millions):

| ​ ​ | ​ | ​ ​ 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| Net cash provided by operating activities | ​ | $1,621.8 | ​ | $1,982.3 | ​ | $(360.5) | ​ |
| Net cash used in investing activities | ​ | $(275.5) | ​ | $(282.5) | ​ | $7.0 | ​ |
| Net cash used in financing activities | ​ | $(620.1) | ​ | $(1,550.5) | ​ | $930.4 | ​ |

### Net cash provided by operating activities:

The change in net cash from operating activities for the six-month period ended June 30, 2024 and 2023 include, in millions, the following significant items:

| ​ ​ | ​ | ​ ​ 2024 | ​ | ​ ​ 2023 | ​ | ​ ​ Variance | ​ | ​ % Change | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: |
| Net income | ​ | $1,692.6 | ​ | $1,365.6 | ​ | $327.0 | ​ | ​ | 23.9% |
| Depreciation, amortization and depletion | ​ | 418.6 | ​ | 412.9 | ​ | 5.7 | ​ |  | 1.4% |
| Provision for deferred income taxes | ​ | 23.2 | ​ | 6.3 | ​ | 16.9 | ​ |  | 268.3% |
| Loss on foreign currency transaction effect | ​ | (4.3) | ​ | 11.1 | ​ | (15.4) | ​ |  | (138.7)% |
| Other adjustments to net income | ​ | 4.7 | ​ | 25.1 | ​ | (20.4) | ​ |  | (81.3)% |
| Operating assets and liabilities | ​ | (513.0) | ​ | 161.3 | ​ | (674.3) | ​ |  | (418.0)% |
| Net cash provided by operating activities | ​ | $1,621.8 | ​ | $1,982.3 | ​ | $(360.5) | ​ | ​ | (18.2)% |

Six months ended June 30, 2024: Net income was 1,692.6 million, which represented approximately 104.3% of the net operating cash flow. The cash flow from operating assets and liabilities decreased by 513.0 million due to the following:

- $(481.2) million increase in net, accounts payable and receivable at our Peruvian and Mexican operations.
- $(24.9) million net increase in inventory.
- $(6.9) million increase in other operating assets and liabilities, net.

Six months ended June 30, 2023: Net income was $1,365.6 million, which represented approximately 68.9% of the net operating cash flow. The cash flow from operating assets and liabilities increased by $161.3 million due to the following:

- $326.2 million decrease in trade accounts receivable at our Peruvian and Mexican operations. These accounts were affected by the accounting adjustment for price variation on sales made and not yet collected.
- $15.6 million net decrease in inventory; principally at our Mexican operations.
- $(172.8) million decrease in accounts payable and accrued liabilities at our Peruvian and Mexican operations, mainly due to a decrease in accrued income taxes at our Mexican operations and to a decrease in accrued worker’s participation at both operations.
- $(7.7) million increase in other operating assets and liabilities, net.

### Net cash used in investing activities:

Six months ended June 30, 2024: Net cash used in investing activities included $545.6 million for capital investments. The capital investments included:

- $409.2 million of investments at our Mexican operations:
- $61.2 million for the IMMSA unit,
- $73.2 million for the tailing deposits of new concentrator,
- $37.2 million for Buenavista Zinc project,
- $13.4 million for Bella Union mine,
- $219.4 million for replacement and maintenance expenditures, and
- $4.8 million in capital expenditures incurred but not yet paid.
- $136.4 million of investments at our Peruvian operations:
- $12.2 million for the HPGR optimization at Cuajone,
- $4.0 million for the maintenance workshops at Cuajone,
- $3.0 million for Tia Maria project,
- $3.0 million for the relocation of the leaching crusher at Toquepala,
- $2.0 million for the Maintenance workshops at Toquepala concentrator,
- $1.1 million for the Quebrada Honda filter plant,
- $104.0 million for replacement and maintenance expenditures, and
- $7.1 million in capital expenditures incurred but not yet paid.

Investment activities in the first six months of 2024 included $270.1 million of net proceed of short-term investments.

Six months ended June 30, 2023: Net cash used in investing activities included $490.6 million for capital investments. The capital investments included:

- $334.2 million of investments at our Mexican operations:
- $62.6 million for the IMMSA unit,
- $38.6 million for Buenavista Zinc project,
- $35.1 million for Bella Union deposit,
- $30.1 million for the tailing deposits of new concentrator,
- $18.8 million for the Pilares project,
- $16.9 million for El Arco unit,
- $126.1 million for replacement and maintenance expenditures, and
- $6.0 million increase in capital expenditures incurred but not yet paid.
- $156.4 million of investments at our Peruvian operations:
- $33.3 million for the HPGR optimization at Cuajone,
- $12.9 million for the maintenance workshops at Cuajone,
- $6.0 million for the Quebrada Honda dam expansion,
- $4.6 million for the Quebrada Honda filter plant,
- $0.9 million for the relocation of facilities at Toquepala,
- $1.2 million for projects at the Ilo facilities,
- $94.4 million for replacement and maintenance expenditures, and
- $3.1 million decrease in capital expenditures incurred but not yet paid.

Investment activities in the first six months of 2023 included $208.0 million of net proceed of short-term investments.

### Dividends:

On July 18, 2024, the Board of Directors authorized a quarterly cash dividend of $0.60 per share of common stock and a stock dividend of 0.0056 shares of common stock per share of common stock, payable on August 26, 2024 for shareholders of record at the close of business on August 9, 2024.

In lieu of fractional shares, cash will be distributed to each shareholder who would otherwise have been entitled to receive a fractional share, based on a share price of $106.54, which is the average of the high and low share price on July 18, 2024.

Shareholders will not be required to take any action to receive the stock dividend. After the payment date, shareholders' book entry accounts will be credited with the additional shares that represent the stock dividend. When shares are held in a brokerage account in the name of a broker, the additional shares will be distributed to the broker on the shareholder's behalf. The stock dividend is administered by Computershare, the Company's transfer agent.

Capital Investment and Exploration Programs:

A discussion of our capital investment programs is an important part of understanding our liquidity and capital resources. We expect to meet the cash requirements for these capital investments from cash on hand, internally generated funds and from additional external financing if required. For information regarding our capital investment programs, please see the discussion under the caption “Capital Investment Programs” under this Item 2.

Contractual Obligations:

There have been no material changes in our contractual obligations in the first quarter of 2024. Please see item 7 in Part II of our 2023 annual report on Form 10-K.

NON-GAAP INFORMATION RECONCILIATION

Operating cash cost: Following is a reconciliation of “Operating Cash Cost” (see page 40) to cost of sales (exclusive of depreciation, amortization and depletion) as reported in our consolidated statement of earnings, in millions of dollars and dollars per pound of copper in the table below:

| ​ ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended June 30, 2024 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ | ​ ​ Three Months Ended June 30, 2023 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ | ​ ​ Six Months Ended June 30, 2024 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ | ​ ​ Six Months Ended June 30, 2023 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ ​ ​ |
| --- | --- | ---: | --- | --- | --- | ---: | --- | ---: | --- | ---: | --- | --- | --- | ---: | --- | --- | --- |
| Cost of sales (exclusive of depreciation, amortization and depletion) | ​ | $1,248.9 | ​ | $2.43 | ​ | $1,147.7 | ​ | $2.37 | ​ | $2,406.5 | ​ | $2.35 | ​ | $2,341.9 | ​ | $2.45 | ​ |
| Add: | ​ |  | ​ | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ | ​ |
| Selling, general and administrative | ​ | 33.9 | ​ | 0.07 | ​ | 31.0 | ​ | 0.06 | ​ | 64.8 | ​ | 0.06 | ​ | 61.4 | ​ | 0.06 | ​ |
| Sales premiums, net of treatment and refining charges | ​ | (9.8) | ​ | ​ (0.02) | ​ | (0.5) | ​ | — | ​ | (14.8) | ​ | ​ (0.01) | ​ | (8.1) | ​ | ​ (0.01) | ​ |
| Less: | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ |
| Workers’ participation | ​ | (91.2) | ​ | ​ (0.18) | ​ | (63.7) | ​ | ​ (0.13) | ​ | (151.1) | ​ | ​ (0.15) | ​ | (136.5) | ​ | ​ (0.14) | ​ |
| Cost of metals purchased from third parties | ​ | (49.3) | ​ | ​ (0.10) | ​ | (40.1) | ​ | (0.08) | ​ | (83.8) | ​ | ​ (0.08) | ​ | (102.4) | ​ | ​ (0.11) | ​ |
| Royalty charge and other, net | ​ | (16.7) | ​ | ​ (0.03) | ​ | (25.3) | ​ | (0.05) | ​ | (22.7) | ​ | ​ (0.02) | ​ | (70.4) | ​ | ​ (0.07) | ​ |
| Inventory change | ​ | (10.4) | ​ | ​ (0.02) | ​ | 10.4 | ​ | 0.02 | ​ | (14.5) | ​ | ​ (0.01) | ​ | (38.7) | ​ | ​ (0.04) | ​ |
| **Operating Cash Cost before by‑product revenues** | **​** | **$1,105.4** | **​** | **$2.15** | **​** | **$1,059.5** | **​** | **$2.19** | **​** | **$2,184.4** | **​** | **$2.13** | **​** | **$2,047.2** | **​** | **$2.14** | **​** |
| Add: | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |
| By‑product revenues(1) | ​ | (705.0) | ​ | ​ (1.37) | ​ | (497.5) | ​ | ​ (1.03) | ​ | (1,225.4) | ​ | ​ (1.20) | ​ | (1,118.1) | ​ | ​ (1.17) | ​ |
| Net revenue on sale of metal purchased from third parties | ​ | (11.4) | ​ | ​ (0.02) | ​ | (19.8) | ​ | ​ (0.04) | ​ | (23.2) | ​ | ​ (0.02) | ​ | (29.8) | ​ | ​ (0.03) | ​ |
| Add: | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |  | ​ |
| Total by‑product revenues | ​ | (716.4) | ​ | (1.40) | ​ | (517.3) | ​ | (1.07) | ​ | (1,248.6) | ​ | (1.22) | ​ | (1,147.9) | ​ | (1.20) | ​ |
| **Operating Cash Cost net of by‑product revenues** | **​** | **$389.0** | **​** | **$0.76** | **​** | **$542.2** | **​** | **$1.12** | **​** | **$935.8** | **​** | **$0.91** | **​** | **$899.3** | **​** | **$0.94** | **​** |
| Total pounds of copper produced (in millions) | ​ | 513.1 | ​ |  | ​ | 484.4 | ​ |  | ​ | 1,024.0 | ​ |  | ​ | 957.4 | ​ |  | ​ |

(1) By-product revenues included in our presentation of operating cash cost contain the following:

| ​ ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended ​ June 30, 2024 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ | ​ ​ Three Months Ended ​ June 30, 2023 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ | ​ ​ Six Months Ended ​ June 30, 2024 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ | ​ ​ Six Months Ended ​ June 30, 2023 ​ ​ $ millions | ​ ​ | ​ ​ $ per pound | ​ ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Molybdenum | ​ | $(379.2) | ​ | $(0.74) | ​ | $(254.4) | ​ | $(0.53) | ​ | $(652.7) | ​ | $(0.64) | ​ | $(556.1) | ​ | $(0.58) | ​ |
| Silver | ​ | (139.6) | ​ | (0.27) | ​ | (99.4) | ​ | (0.21) | ​ | (241.7) | ​ | (0.24) | ​ | (211.7) | ​ | (0.22) | ​ |
| Zinc | ​ | (91.0) | ​ | (0.18) | ​ | (42.5) | ​ | (0.09) | ​ | (136.7) | ​ | (0.13) | ​ | (112.9) | ​ | (0.12) | ​ |
| Sulfuric Acid | ​ | (63.9) | ​ | (0.12) | ​ | (73.2) | ​ | (0.15) | ​ | (133.2) | ​ | (0.13) | ​ | (162.7) | ​ | (0.17) | ​ |
| Gold and others | ​ | (31.3) | ​ | (0.06) | ​ | (28.0) | ​ | (0.05) | ​ | (61.0) | ​ | (0.06) | ​ | (74.7) | ​ | (0.08) | ​ |
| **Total** | **​** | **$(705.0)** | **​** | **$(1.37)** | **​** | **$(497.5)** | **​** | **$(1.03)** | **​** | **$(1,225.4)** | **​** | **$(1.20)** | **​** | **$(1,118.1)** | **​** | **$(1.17)** | **​** |

## Market risk

As filed, 5,961 characters.

### Commodity price risk:

For additional information on metal price sensitivity, refer to “Metal Prices” in Part I, Item 2 of this quarterly report on Form 10-Q for the period ended June 30, 2024.

### Foreign currency exchange rate risk:

Our functional currency is the U.S. dollar. Portions of our operating costs are denominated in Peruvian soles and Mexican pesos. Given that our revenues are primarily denominated in U.S. dollars, when inflation or deflation in our Mexican or Peruvian operations is not offset by a change in the exchange rate of the sol or the peso to the dollar, our financial position, results of operations and cash flows could be affected by local cost conversion when expressed in U.S. dollars. In addition, the dollar value of our net monetary assets denominated in soles or pesos can be affected by an exchange rate variance of the sol or the peso, resulting in a re-measurement gain or loss in our financial statements. Recent inflation and exchange rate variances are provided in the table below for the three and six-month period ended June 30, 2024 and 2023:

| ​ ​ ​ ​ Peru: | ​ ​ | ​ ​ Three Months Ended June 30, 2024 | ​ ​ ​ 2023 | ​ ​ | ​ ​ Six Months Ended June 30, 2024 | ​ ​ ​ 2023 |
| --- | --- | ---: | ---: | --- | ---: | ---: |
| Peruvian inflation rate |  | (0.0)% | 0.7% |  | 1.6% | 2.5% |
| ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ | ​ ​ |
| Initial exchange rate |  | 3.721 | 3.765 |  | 3.713 | 3.820 |
| Closing exchange rate |  | 3.837 | 3.633 |  | 3.837 | 3.633 |
| Appreciation/(devaluation) |  | (3.1)% | 3.5% |  | (3.3)% | 4.9% |
| ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ | ​ ​ |
| Mexico: |  |  |  |  |  |  |
| Mexican inflation rate |  | 0.4% | (0.1)% |  | 1.7% | 1.4% |
| ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ | ​ ​ |
| Initial exchange rate |  | 16.678 | 18.105 |  | 16.894 | 19.362 |
| Closing exchange rate |  | 18.377 | 17.072 |  | 18.377 | 17.072 |
| Appreciation/(devaluation) |  | (10.2)% | 5.7% |  | (8.8)% | 11.8% |

### Change in monetary position:

Assuming an exchange rate variance of 10% at June 30, 2024, we estimate our net monetary position in Peruvian sol and Mexican peso would increase (decrease) our net earnings as follows:

*($ in millions)*

| ​ ​ ​ ​ | ​ | ​ ​ Effect in net earnings |
| --- | --- | ---: |
| Appreciation of 10% in U.S. dollar vs. Peruvian sol | ​ | $27.2 |
| Devaluation of 10% in U.S. dollar vs. Peruvian sol | ​ | $(33.2) |
| Appreciation of 10% in U.S. dollar vs. Mexican peso | ​ | $(22.3) |
| Devaluation of 10% in U.S. dollar vs. Mexican peso | ​ | $18.2 |

### Open sales risk:

Our provisional copper and molybdenum sales contain an embedded derivative that is required to be separate from the host contract for accounting purposes. The host contract is the receivable from the sale of copper and molybdenum concentrates at prevailing market prices at the time of the sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through earnings each period prior to settlement. See Note 13 to our condensed consolidated financial statements for further information about these provisional sales.

### Short-term Investments:

For additional information on our trading securities and available-for-sale investments, refer to “Short-term Investments” in Part I, Item 1 of this quarterly report on Form 10-Q for the period ended June 30, 2024.

### Derivative Instruments:

From time to time, we use derivative instruments to manage our cash flows exposure to changes in commodity prices. We do not enter into derivative contracts unless we anticipate that the possibility exists that future activity will expose our future cash flows to deterioration. Derivative contracts for commodities are entered into to manage the price risk associated with forecasted purchases of the commodities that we use in our manufacturing process.

### Cash Flow Hedges of Natural Gas

Our objective in using natural gas derivatives is to protect the stability of natural gas costs and manage exposure to natural gas price increases. To protect natural gas costs from estimated price increases in 2021, we acquired two derivative instruments that began in November 2021 and ended in March 2022.

We assessed these derivative instruments as Cash Flow Hedges. As such, the effective portions of said hedges were initially reported in Other Comprehensive Income (OCI) and were reclassified as earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affected earnings. The Company did not identify any ineffective portions of these derivatives.

As of June 30, 2024, we held no derivative instruments.

Cautionary Statement:

Forward-looking statements in this report and in other Company statements include statements regarding expected commencement dates of mining or metal production operations, projected quantities of future metal production, anticipated production rates, operating efficiencies, costs and expenditures as well as projected demand or supply for the Company’s products. Actual results could differ materially depending upon factors including the risks and uncertainties relating to general U.S. and international economic and political conditions, the cyclical and volatile prices of copper, other commodities and supplies, including fuel and electricity, availability of materials, insurance coverage, equipment, required permits or approvals and financing, the occurrence of unusual weather or operating conditions, lower than expected ore grades, water and geological problems, the failure of equipment or processes to operate in accordance with specifications, failure to obtain financial assurance to meet closure and remediation obligations, labor relations, litigation and environmental risks as well as political and economic risk associated with foreign operations. Results of operations are directly affected by metal prices on commodity exchanges that can be volatile.

## Controls and procedures

As filed, 4,250 characters.

#### EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of June 30, 2024, the Company conducted an evaluation under the supervision and with the participation of the Company’s disclosure committee and the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness and the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of June 30, 2024, to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is:

1\. Recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and

2\. Accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the three months ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

### Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Southern Copper Corporation:

### Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Southern Copper Corporation and subsidiaries (the “Company”) as of June 30, 2024, the related condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders’ equity for the three-month and six-month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, and the related consolidated statements of earnings, comprehensive income, cash flows and stockholders’ equity for the year then ended (not presented herein); and in our report dated February 29, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

### Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.

Galaz, Yamazaki, Ruiz Urquiza, S.C.

Member of Deloitte Touche Tohmatsu Limited

|  |  |
| --- | --- |
|  | ​ |
| /s/ Paulina Ramos Ramirez | ​ |
| C.P.C. Paulina Ramos Ramirez | ​ |
| Mexico City, Mexico | ​ |
| August 2, 2024 | ​ |

## Risk factors

As filed, 1,590 characters.

The Company's operations and financial results are subject to various risks and uncertainties, including those described in “Risk Factors” included in Part I, Item 1A of our Annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024. The following supplements and updates the risk factor previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

### Mexican economic and political conditions, as well as drug related violence, may have an adverse impact on our business

On April 29 2023, Mexican Senate approved a fast-track bill that would impact the mining industry. The main aspects that will be affected by the legislation are changes in mining concession period from 50 to 30 years; new restrictions and conditions on water use; provide of guarantees for closure and remediation of operations, sets 5% contribution of net earnings to indigenous communities for new projects and finally significant changes to exploration activities.

In the future, the aforementioned changes could trigger amendments, additions and repeals to provisions of a number of laws, including the Mining Law, the National Water Law, the General Law for Ecological Balance and Environmental Protection and the General Law for the Prevention and Management of Mine Waste.

Although the Company believes that there would be no material impact on the Company's operations or financial condition, we cannot assure you that future developments in these laws will not affect our current business as well as our organic growth portfolio.

Filed Aug 2, 2024.
Source: SEC EDGAR, the filing index for accession 0001558370-24-010710. Last ingested by Listed: Nov 4, 2026, 00:34 ET. No prices; not investment advice.