Southern Copper (NYSE:SCCO) posted a record Q1 2026 Net Income of $1.58 billion, up 66.7% year-over-year, as copper, silver, and molybdenum prices surged. Adjusted EBITDA margins reached 63.8% while cash cost per pound of copper fell to negative $0.11.

Key Highlights

  • Q1 2026 Net Income of $1.58 billion set a new company record, up 66.7% year-over-year, with a Net Income Margin of 37.1%.
  • Net sales reached $4.25 billion, up 36.2% year-over-year, driven by higher metal prices across all products and Volume growth in silver and zinc.
  • Adjusted EBITDA rose 55.4% to $2.71 billion, with margins expanding to 63.8% from 55.9% in Q1 2025.
  • Cash cost per pound of copper, net of by-product credits, fell to negative $0.11 from $0.77 in Q1 2025, a 114% reduction.
  • The board declared a quarterly Cash Dividend of $1.00 per share alongside a Stock Dividend of 0.01 shares per share, payable May 29, 2026.

A Record Quarter Defined by Price and By-Product Tailwinds

Southern Copper (NYSE:SCCO) delivered the strongest quarter in its history, combining an exceptional metal price environment with growing by-product revenues and disciplined cost management. Copper prices rose 37.5% year-over-year, while silver surged 157.9%, molybdenum gained 24.2%, and zinc advanced 14.0%. These price movements, layered onto Volume growth in silver and zinc, produced a result that substantially exceeded the prior year on every key financial metric.

The most structurally notable development was the near-elimination of cash cost. By-product Revenue credits expanded 87.4% year-over-year, driven by stronger silver and zinc sales volumes alongside sharply higher prices. The resulting cash cost of negative $0.11 per pound of copper means the company is effectively being paid to produce copper once by-product revenues are netted against operating expenses, a position that maximises Leverage/">Operating Leverage in a high-price environment.

Production: Lower Copper, Stronger By-Products

Copper production declined 4.0% year-over-year, primarily reflecting lower ore grades and recoveries at Peruvian operations, which fell 9.8% in line with the annual Mining plan. The company expects ore grades to recover by the end of 2026. Partially offsetting the Peruvian decline, La Caridad in Mexico increased copper output by 5.5%.

By-product production was the clear operational highlight. Mined silver production increased 11.1%, with particularly strong contributions from La Caridad, up 22.1%, and Buenavista, up 20.7%. Zinc production rose 2.0%, driven by the IMMSA operations where output grew 9.1%. Molybdenum production declined 2.2% due to lower output at Buenavista.

Capital Investment and Project Pipeline

Capital Expenditure reached $441.9 million in Q1 2026, up 39.0% year-over-year, representing 28.3% of Net Income. The company's decade-long Capital Investment programme exceeds $20.5 billion, with major projects in Peru and Mexico at various stages of development.

The Tia Maria project in Arequipa, Peru, targeting 120,000 tonnes of copper cathodes per year, reached 32.5% completion as of March 31, 2026, with operations expected to begin in Q3 2027. Large-scale earthmoving works, major equipment orders, and infrastructure construction are all progressing. The Los Chancas project in Apurímac faces delays due to the presence of illegal miners in the project area, with the company working with authorities to regain site control. The Michiquillay project in Cajamarca, expected to produce 225,000 tonnes of copper annually from 2032, continues geotechnical and reserve estimation studies.

Leadership Transition

The quarter was marked by the passing of Oscar Gonzalez Rocha, who served as Executive President and CEO for decades and was described as one of the most influential leaders in the global Mining industry. On April 23, 2026, the board appointed Leonardo Contreras Lerdo de Tejada as the new CEO, bringing over a decade of experience within the Grupo Mexico organisation across operations, finance, and executive Leadership roles.

Conclusion

Southern Copper's record Q1 2026 results reflect the powerful Earnings Leverage embedded in a low-cost, diversified Mining platform during periods of elevated metal prices. Negative cash costs and expanding margins demonstrate the structural advantage of the company's by-product portfolio. While near-term copper production faces a temporary grade headwind, the longer-term growth pipeline remains substantial, with several world-class projects advancing toward production over the next decade.