SCCO Guides Lower Output For 2026: Is a Strong Rebound Ahead?

Southern Copper Corporation SCCO reported copper production of 956,270 tons in 2025, reflecting a modest 1.8% year-over-year decline and falling 1% short of its guidance. Lower output at Buenavista and the Peruvian mines, partially offset by a rise in production at IMMSA and La Caridad mines, led to decreased numbers for the year.

Expecting weaker ore grades at its Peruvian mines, SCCO projects 2026 copper production at around 911,400 tons, suggesting a 4.7% decline from 2025 levels.
Despite these near-term headwinds, Southern Copper maintains a strong long-term outlook, targeting a significant ramp-up in output to roughly 1.6 million tons by 2035. This implies a compound annual growth rate (CAGR) of approximately 5.3% from 2025 levels.

To support this ambitious growth plan, the company intends to invest nearly $19.9 billion over the next decade, with the bulk of the capital allocated to projects in Peru. A substantial portion of this spending is scheduled through 2031 as key development projects progress.

Production is expected to increase to about 1.15 million tons by 2031, surge to roughly 1.476 million tons in 2032 and continue rising steadily to reach the above-mentioned 1.6 million ton target by 2035. This trajectory highlights SCCO’s confidence in its robust and diversified project pipeline spanning Peru and Mexico.
Among the key projects, the Tia Maria project located in Arequipa, Peru, with an annual capacity of 120,000 tons of SX- EW copper cathodes, is expected to start in 2027. In Mexico, El Pilar, expected to start in 2029, will contribute around 36,000 tons of copper cathodes annually.

The El Arco project in Baja California is projected to come online by 2030, contributing around 190,000 tons of copper. This world-class copper deposit is located in the central part of the Baja California peninsula. The project includes an open-pit mine with a combined 120 ktpd concentrator and 28 ktpy SX-EW operations.
Peru’s Los Chancas project is slated to add 130,000 tons of copper starting in 2031, followed by Michiquillay in 2032 with an expected 225,000 tons of copper. It will not only significantly boost SCCO’s production profile, but is expected to become one of Peru's largest copper mines.

This phased and diversified pipeline suggests that temporary production softness may give way to a sustained growth cycle over the next decade.

Peer BHP Group’s BHP copper production was 984 kt for the first half of fiscal 2026. Escondida achieved record concentrator throughput and improved recoveries, aided by operational enhancements. Copper SA delivered a record amount of material mined.

In fiscal 2025, BHP had reported record copper output of 2,017 kt, up 8% year over year, crossing the 2,000 kt mark for the first time. Fiscal 2026 copper output is targeted at 1,900-2,000 kt (raised from 1,800-2,000 kt). BHP’s project pipeline could add two Mtpa of attributable copper output by the 2030s.

Another peer, Teck Resources TECK reported copper production of around 454 thousand tons in 2025, up 1.8% year over year. It forecasts copper production at 455-530 thousand tons for 2026, 505 – 580 thousand tons for 2027 and 435 – 510 thousand tons for 2028.

Teck Resources has entered into a merger agreement with Anglo American plc to form the Anglo Teck group. Anglo Teck has more than 70% exposure to copper and an industry-leading portfolio, which consists of six world-class copper assets and premium iron ore and zinc operations. The combined annual copper production of 1.2 million tons is projected to grow 10% to 1.35 million tons by 2027.

SCCO’s Price Performance, Valuation & Estimates

Southern Copper shares have gained 126.5% in the past year compared with the industry’s 102.8% growth.

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SCCO is trading at a forward 12-month price/sales multiple of 11.95X, a significant premium to the industry’s 5.49X.

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The Zacks Consensus Estimate for Southern Copper’s 2026 earnings is pegged at $6.36 per share, suggesting 21.4% year-over-year growth. The same for 2027 indicates a decline of 12.6%. Here is how the EPS estimates for 2026 and 2027 have been revised over the past 60 days.

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SCCO currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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