Southern Copper sees lower output as silver rally grabs focus

Southern Copper Corp. expects copper output to decline over the next two years as ore grades fall at key mines in Peru, even as a surge in silver prices sharpens the miner’s focus on boosting production of the precious metal it typically produces as a byproduct.

The company, which has projects in Peru and Mexico, forecasts copper output of 911,400 tons this year and “a little bit north of 900,000 tons” in 2027, chief financial officer Raul Jacob Ruisanchez said on a call with investors Wednesday. That’s down from 954,270 tons produced last year, with lower ore grades at the Toquepala and Cuajone mines in Peru weighing on the outlook.

Shares dipped as much as 2.4% on Wednesday in New York before rebounding to trade near $195.33 at 12:38 p.m. local time.

Ruisanchez also pointed to a renewed focus to boost zinc and silver output after Southern Copper discovered a “pocket of very good ore grades for both” at its Buenavista mine in Mexico. Higher silver prices last year prompted the company to channel more zinc — where the precious metal is a key byproduct — through one of its concentrators, he said.

“If there is a significant change in the relative prices between zinc, silver and copper, we will review our strategy,” Ruisanchez said. For now, “it still makes sense to be producing silver and zinc.”

In a statement released Tuesday, Southern Copper reaffirmed its long-term objective of producing 1.6 million tons of copper by 2033.

(By Sybilla Gross)