Southern Copper (SCCO) 10-K 26 Feb 10 2009 FY Annual report Financial data

CONSOLIDATED STATEMENT OF EARNI

CONSOLIDATED STATEMENT OF EARNINGS (USD $)
In Thousands, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
CONSOLIDATED STATEMENT OF EARNINGS
Net sales	$3,734,280	$4,850,820	$6,085,672
Operating costs and expenses:
Cost of sales (exclusive of depreciation, amortization and depletion shown separately below)	1,823,673	2,182,206	2,122,163
Selling, general and administrative	78,291	102,432	98,047
Depreciation, amortization and depletion	322,590	327,302	327,898
Exploration	24,578	36,990	40,212
Total operating costs and expenses	2,249,132	2,648,930	2,588,320
Operating income	1,485,148	2,201,890	3,497,352
Interest expense	(99,793)	(105,928)	(123,204)
Capitalized interest	2,156	6,776	14,717
Gain (loss) on derivative instruments	4,236	(74,628)	(73,711)
Loss on debt prepayments			(16,572)
Other income (expense)	6,077	17,272	30,759
Interest income	6,610	48,400	82,519
Income before income taxes	1,404,434	2,093,782	3,411,860
Income taxes	469,861	679,323	1,185,261
Net income	934,573	1,414,459	2,226,599
Less: Net income attributable to the non-controlling interest	5,192	7,866	10,229
Net income attributable to SCC	$929,381	$1,406,593	$2,216,370
Per common share amounts attributable to SCC:
Net earnings - basic (in dollars per share)	1.09	1.6	2.51
Net earnings - diluted (in dollars per share)	1.09	1.6	2.51
Dividends paid (in dollars per share)	0.44	1.94	2.27
Weighted average shares outstanding - basic (in shares)	850,697	878,713	883,392
Weighted average shares outstanding - diluted (in shares)	850,697	878,713	883,392

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET (USD $)
In Thousands	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$772,306	$716,740
Short-term investments	22,948	62,376
Accounts receivable trade (less allowance for doubtful accounts (2009 - $4,614 and 2008 - $4,811)	407,979	104,149
Accounts receivable other (including affiliates 2009 - $4,491 and 2008 - $1,925)	31,971	29,439
Inventories	456,122	451,597
Deferred income tax - current portion	19,672	64,711
Other current assets	67,131	124,681
Total current assets	1,778,129	1,553,693
Property, net	3,969,558	3,810,508
Leachable material, net	107,262	156,294
Intangible assets, net	113,840	115,059
Deferred income tax	52,670	83,106
Other assets	41,113	45,664
Total assets	6,062,572	5,764,324
Current liabilities:
Current portion of long-term debt	10,000	10,000
Accounts payable	283,703	413,351
Accrued income taxes	91,359	34,378
Due to affiliated companies		8,965
Accrued workers' participation	150,692	205,466
Accrued interest	39,795	40,968
Other accrued liabilities	26,876	24,335
Total current liabilities	602,425	737,463
Long-term debt	1,270,252	1,279,972
Deferred income taxes	143,508	169,342
Non-current taxes payable	26,201	70,266
Other liabilities and reserves	77,607	93,875
Asset retirement obligation	48,925	18,007
Total non-current liabilities	1,566,493	1,631,462
STOCKHOLDERS' EQUITY
Common stock par value $0.01; shares authorized: 2009 and 2008 960,000,000 shares issued: 2009 and 2008 - 884,596,086	8,846	8,846
Additional paid-in capital	1,013,326	993,826
Retained earnings	3,469,930	2,916,517
Accumulated other comprehensive loss	(13,061)	(23,477)
Treasury stock, at cost, common shares	(603,413)	(514,453)
Total stockholders' equity	3,875,628	3,381,259
Non-controlling interest	18,026	14,140
Total equity	3,893,654	3,395,399
Total liabilities and equity	$6,062,572	$5,764,324

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)
In Thousands, except Share data	Dec. 31, 2009	Dec. 31, 2008
CONSOLIDATED BALANCE SHEET
Accounts receivable trade, allowance for doubtful accounts (in dollars)	$4,614	$4,811
Accounts receivable from affiliates (in dollars)	$4,491	$1,925
Common stock, par value (in dollars per share)	0.01	0.01
Common stock, shares authorized	960,000,000	960,000,000
Common stock, shares issued	884,596,086	884,596,086

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
OPERATING ACTIVITIES
Net income	$934,573	$1,414,459	$2,226,599
Adjustments to reconcile net earnings to net cash provided from operating activities:
Depreciation, amortization and depletion	322,590	327,302	327,898
Capitalized leachable material		(2,246)	(45,903)
(Gain) loss on currency translation effect	18,307	(18,063)	12,052
Provision (benefit) for deferred income taxes	41,231	(100,115)	66,596
(Gain) loss on sale of property	(6,173)	(29,778)	780
Loss on short-term investments	(4,353)	10,339	81,006
Unrealized loss (gain) on derivative investments	(56,815)	56,815	(520)
Cash provided from (used for) operating assets and liabilities:
Accounts receivable	(299,631)	330,163	66,200
Inventories	(4,525)	(3,314)	(34,632)
Accounts payable and accrued liabilities	(89,139)	(164,284)	(150,309)
Other operating assets and liabilities	107,113	(92,938)	153,689
Net cash provided from operating activities	963,178	1,728,340	2,703,456
INVESTING ACTIVITIES
Capital expenditures	(414,822)	(524,400)	(315,741)
Purchase of short-term investments			(217,903)
Proceeds on sale of short-term investments	43,781	45,188	287,398
Sale of property	11,755	60,613
Other			267
Net cash used for investing activities	(359,286)	(418,599)	(245,979)
FINANCING ACTIVITIES
Debt repaid	(10,000)	(160,025)	(78,600)
SCC common shares buyback	(71,903)	(384,656)
Proceeds from sale of parent company shares		216,438
Dividends paid to common stockholders	(375,969)	(1,710,813)	(2,002,312)
Distributions to non-controlling interest	(1,149)	(10,211)	(7,211)
Other	998	1,231	(224)
Net cash used for financing activities	(458,023)	(2,048,036)	(2,088,347)
Effect of exchange rate changes on cash and cash equivalents	(90,303)	45,763	17,364
Increase (decrease) in cash and cash equivalents	55,566	(692,532)	386,494
Cash and cash equivalents, at beginning of year	716,740	1,409,272	1,022,778
Cash and cash equivalents, at end of year	772,306	716,740	1,409,272
Cash paid during the year for:
Interest	95,492	116,709	117,883
Income taxes	339,421	922,019	1,057,931
Workers' participation	183,697	305,216	301,056
Supplemental schedule of non-cash operating, investing and financing activities:
(Increase) decrease in pension and other post-retirement benefits	10,416	3,050	(3,266)
Common Stock split:
Increase in Common Stock		5,897
Decrease in additional paid-in capital		$5,897

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Changes in equity
Balance at beginning of year	$3,395,399	$3,864,805	$3,680,594
Net earnings	934,573	1,414,459	2,226,599
Balance at end of year	3,893,654	3,395,399	3,864,805
CAPITAL STOCK:
Changes in equity
Balance at beginning of year	8,846	8,846	8,846	[1]
Balance at end of year	8,846	8,846	8,846
ADDITIONAL PAID-IN CAPITAL:
Changes in equity
Balance at beginning of year	993,826	819,646	766,796	[1]
Gain on sale of parent company shares		144,091
Net movement of the period	19,500	30,089	52,850
Balance at end of year	1,013,326	993,826	819,646
TREASURY STOCK:
Changes in equity
Balance at beginning of year	(514,453)	(174,675)
Balance at end of year	(603,413)	(514,453)	(174,675)
TREASURY STOCK: | Southern Copper common shares
Changes in equity
Balance at beginning of year	(388,968)	(4,360)	(4,409)
Share repurchase program	(71,904)	(384,656)
Used for corporate purposes	160	48	49
Balance at end of year	(460,712)	(388,968)	(4,360)
TREASURY STOCK: | Parent Company common shares
Changes in equity
Balance at beginning of year	(125,485)	(170,315)	(92,603)
Sale of shares		72,339
Other activity, including dividend, interest and currency translation effect	(17,216)	(27,509)	(77,712)
Balance at end of year	(142,701)	(125,485)	(170,315)
RETAINED EARNINGS:
Changes in equity
Balance at beginning of year	2,916,517	3,220,857	3,010,307
Net earnings	929,381	1,406,473	2,216,370
Cumulative effect of uncertain tax position			(3,508)
Dividends paid, Common Stock, per share, 2009 - $0.44, 2008 - $1.94, 2007 - $2.27	(375,968)	(1,710,813)	(2,002,312)
Balance at end of year	3,469,930	2,916,517	3,220,857
ACCUMULATED OTHER COMPREHENSIVE LOSS:
Changes in equity
Balance at beginning of year	(23,477)	(26,554)	(22,332)
(Increase) decrease in pension and other post-retirement benefits	10,416	3,050	(3,266)
Unrealized gain on equity securities		27	(956)
Balance at end of year	(13,061)	(23,477)	(26,554)
STOCKHOLDERS' EQUITY-
Changes in equity
Balance at beginning of year	3,381,259	3,848,120	3,666,605
Balance at end of year	3,875,628	3,381,259	3,848,120
NON-CONTROLLING INTEREST:
Changes in equity
Balance at beginning of year	14,140	16,685	13,989
Net earnings	5,192	7,866	10,229
Dividends paid, Common Stock, per share, 2009 - $0.44, 2008 - $1.94, 2007 - $2.27	(1,149)	(10,211)	(7,211)
Other activity	(157)	(200)	(322)
Balance at end of year	18,026	14,140	16,685
COMPREHENSIVE INCOME:
Changes in equity
Net earnings	934,573	1,414,459	2,226,599
(Increase) decrease in pension and other post-retirement benefits	10,416	3,050	(3,266)
Unrealized gain on equity securities		27	(956)
Total comprehensive income	944,989	1,417,536	2,222,377
Comprehensive income attributable to the non-controlling interest	5,192	7,866	10,229
Comprehensive income attributable to SCC	$939,797	$1,409,670	$2,212,148
[1]Initial balance was retrospectively adjusted to reflect the stock split made in 2008.

1_CONSOLIDATED STATEMENT OF CHA

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY SUPPLEMENTAL (USD $)
In Thousands	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
RETAINED EARNINGS
Unappropriated	$1,693,675	$540,981	$1,128,407
Appropriated	1,776,255	2,375,536	2,092,450
Total retained earnings	$3,469,930	$2,916,517	$3,220,857

2_CONSOLIDATED STATEMENT OF CHA

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Parenthetical) (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Dividends paid, Common Stock (in dollars per share)	0.44	1.94	2.27

DESCRIPTION OF THE BUSINESS

DESCRIPTION OF THE BUSINESS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DESCRIPTION OF THE BUSINESS:	NOTE 1-DESCRIPTION OF THE BUSINESS: The consolidated financial statements presented herein consist of the accounts of Southern Copper Corporation (SCC or the Company) and its subsidiaries. The Company is an integrated producer of copper and other minerals, and operates mining, smelting and refining facilities in Peru and Mexico. The Company conducts its primary operations in Peru through a registered branch (the Peruvian Branch). The Peruvian Branch is not a corporation separate from the Company. The Companys Mexican operations are conducted through subsidiaries.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:	NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Principles of consolidation The consolidated financial statements include the accounts of subsidiaries of which the Company has voting control, in accordance with Accounting Standards Codification 810 Consolidation ASC-810 (in prior literature SFAS No.94 Consolidation of All Majority-Owned Subsidiaries). Such financial statements are prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The consolidated balance sheets as of December31, 2008 and the related consolidated statement of earnings, changes in equity and cash flows for the years ended December31, 2008 and 2007, have been retrospectively adjusted to conform with the new presentation requirements related to the non-controlling interest set forth in ASC-810 (in prior literature SFAS No. 160 non-controlling interest). Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the carrying value of ore reserves that are the basis for future cash flow estimates and amortization calculations; environmental, reclamation, closure and retirement obligations; estimates of recoverable copper in mill and leach stockpiles; asset impairments (including estimates of future cash flows); bad debts; inventory obsolescence; deferred and current income tax; valuation allowances for deferred tax assets; reserves for contingencies and litigation; and fair value of financial instruments. Management bases its estimates on the Companys historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Revenue recognition Substantially all of the Companys copper is sold under annual or other longer-term contracts. Revenue is recognized when title passes to the customer. The passing of title is based on terms of the contract, generally upon shipment. Copper revenue is determined based on the monthly average of prevailing commodity prices according to the terms of the contracts. The Company provides allowances for doubtful accounts based upon historical bad debt and claims experience and periodic evaluation of specific customer accounts. For certain of the Companys sales of copper and molybdenum products, customer contracts allow for pricing based on a month subsequent to shipping, in most cases within the following three months and in a couple of cases a few additional months. In such cases, revenue is recorded at a provisional price at the time of shipment. The provisionally priced copper sales are adjusted to reflect forward LME or COMEX copper prices at the end of each month until a final adjustment is made to the price of the shipments upon settlement with customers pursuant to the terms of the contract. In t

SHORT-TERM INVESTMENTS

SHORT-TERM INVESTMENTS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SHORT-TERM INVESTMENTS:	NOTE 3- SHORT-TERM INVESTMENTS: Short-term investments were as follows: As of December31, Investments 2009 2008 Short-term investments in securities issued by public companies (in millions). $ 22.9 $ 62.4 Weighted average interest rate 0.63 % 1.85 % Short-term investments consist of securities issued by public companies, which have been classified as available for sale. Each security is independent of the others. As of December31, 2009 and 2008, gross unrealized gains and losses on available for sale securities were not material. Related to these investments the Company earned interest which was recorded as interest income in the consolidated statement of earnings. Also the Company redeemed some of these securities and recognized gains (losses) due to changes in fair value, which were recorded as other income (expense) in the consolidated statement of earnings. As of December31, 2009 and 2008 contractual maturities of debt securities are as follows (in millions): 2009 2008 One year or less $ 9.0 $ 23.6 Maturing after one year through five years 4.1 24.8 Maturing after five years through ten years 0.1 1.5 Due after ten years 9.7 12.5 Total debt securities $ 22.9 $ 62.4 The following table summarized the activity of these investments (in millions): Year ended December31, 2009 2008 Interest earned $ 0.4 $ 4.1 Investment redeemed 43.8 45.2 Loss recognized for other than temporary declines $ 10.3

INVENTORIES

INVENTORIES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INVENTORIES:	NOTE 4-INVENTORIES: As of December31, (in millions) 2009 2008 Metals: Finished goods $ 63.8 $ 46.7 Work-in-process 142.5 135.8 Supplies 249.8 269.1 Total inventories $ 456.1 $ 451.6

PROPERTY

PROPERTY
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PROPERTY:	NOTE 5-PROPERTY: As of December31, (in millions) 2009 2008 Buildings and equipment $ 6,531.5 $ 6,292.9 Construction in progress 751.9 642.2 Mine development 288.6 261.9 Land, other than mineral 48.4 48.2 Total property 7,620.4 7,245.2 Accumulated depreciation, amortization and depletion (3,650.8 ) (3,434.7 ) Total property, net $ 3,969.6 $ 3,810.5 Depreciation and depletion expense for the years ended December31, 2009, 2008 and 2007 amounted to $271.2 million, $257.5 million and $263.4 million, respectively.

CAPITALIZED LEACHABLE MATERIAL

CAPITALIZED LEACHABLE MATERIAL COST
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CAPITALIZED LEACHABLE MATERIAL COST:	NOTE 6-CAPITALIZED LEACHABLE MATERIAL COST: As of December31, (in millions) 2009 2008 Capitalized leachable material $ 378.1 $ 378.1 Accumulated amortization (270.8 ) (221.8 ) Capitalized leachable material, net $ 107.3 $ 156.3 Amortization of leachable material is included in depreciation, amortization and depletion on the consolidated statement of earnings. The Companys policy of deferring leachable material cost for one of its Mexican mines increased (decreased) operating costs as compared to what such amounts would have been if the Company expensed leachable material costs as incurred. The following table summarizes these effects for the three years ended December31, 2009 (in millions): 2009 2008 2007 Amortization expense $ 49.0 $ 67.7 $ 61.8 Net increase in operating costs $ 44.1 $ 57.6 $ 10.1

INTANGIBLE ASSETS

INTANGIBLE ASSETS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTANGIBLE ASSETS:	NOTE 7-INTANGIBLE ASSETS: As of December31, (in millions) 2009 2008 Mining concessions $ 121.2 $ 121.2 Mine engineering and development studies 6.0 6.0 Software 7.0 5.9 134.2 133.1 Accumulated amortization (37.4 ) (35.0 ) Goodwill 17.0 17.0 Intangible assets, net $ 113.8 $ 115.1 Amortization of intangibles in the last three years and estimated amortization are as follows (in millions): Amortization expense: 2009 $ 2.4 2008 $ 2.0 2007 $ 2.7 Estimated amortization expense: 2010-2014 $ 12.2 Average annual $ 2.4 The goodwill was generated in 1997 as a result of purchasing a third party interest in the Cananea mine.

INCOME TAXES

INCOME TAXES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INCOME TAXES:	NOTE 8-INCOME TAXES: The components of the provision for income taxes are as follows: Year ended December31, (in millions) 2009 2008 2007 U.S. federal and state: Current $ (34.6 ) $ (29.9 ) $ 79.8 Deferred 33.4 (15.1 ) (48.3 ) (1.2 ) (45.0 ) 31.5 Foreign (Peru and Mexico): Current 463.2 809.3 1,038.8 Deferred 7.9 (85.0 ) 115.1 471.1 724.3 1,153.9 Total provision for income taxes $ 469.9 $ 679.3 $ 1,185.3 The source of income tax is as follows: For the years ended December31, (in millions) 2009 2008 2007 Earnings by location: U.S. $ 4.2 $ 1.2 $ 13.5 Foreign (Peru and Mexico) 1,400.2 2,092.6 3,398.4 Earnings before taxes on income $ 1,404.4 $ 2,093.8 $ 3,411.9 The reconciliation of the statutory income tax rate to the effective tax rate is as follows: For the years ended December31, 2009 2008 2007 Expected tax 30.0 % 30.0 % 30.0 % Effect of income taxed at a rate other than the statutory rate 8.3 7.0 5.8 Depletion (5.0 ) (5.1 ) (3.7 ) Permanent differences 2.1 1.3 1.0 Peru tax on net income deemed distributed 2.0 2.0 1.4 Mexican tax on dividends 1.6 Increase (decrease) in valuation allowance (0.8 ) 0.1 Outside basis difference 1.4 Increase (decrease) in unrecognized tax benefits for uncertain tax positions (4.5 ) (3.8 ) 0.4 Other (1.6 ) 1.0 (0.1 ) Effective income tax rate 33.5 % 32.5 % 34.8 % The Company files income tax returns in three jurisdictions, Peru, Mexico and the United States, each of which has a different statutory rate for 2009. For the three years presented above the statutory income tax rates for Mexico, Peru and the United States were 28%, 30% and 35%, respectively. The expected rate used above is the statutory tax rate for Peru. The Company has chosen to use the Peruvian income tax rate of 30% for this tax rate reconciliation because the Peruvian income tax provision is the largest component of tax expense for each of the three years presented. For all of the years presented, both SCC and Minera Mexico filed separate tax returns in their respective tax jurisdictions. Although the tax rulesand regulations imposed in the separate tax jurisdictions may vary significantly, similar permanent items exist, such as items which are nondeductible or nontaxable. Some permanent differences relate specifically to SCC such as the allowance in the U.S for percentage depletion. The following items had the most significant impact in 2009 on the difference between the Companys statutory income tax rate of 30% and its effective tax rate: A 8.3% increase resulted from income taxed at a rate other than the statutory rate. A 5.0% decrease resulted from the depletion deduction which is a U.S. permanent item. A 2.1% increase resulted from permanent items that are not deductible in the Peruvian,

WORKERS' PARTICIPATION

WORKERS' PARTICIPATION
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
WORKERS' PARTICIPATION:	NOTE 9-WORKERS PARTICIPATION: The Companys operations in Peru and Mexico are subject to statutory workers participation. In Peru, the provision for workers participation is calculated at 8% of pre-tax earnings. The current portion of this participation, which is accrued during the year, is based on Peruvian Branchs taxable income and is distributed to workers following determination of final results for the year. The annual amount payable to an individual worker is capped at the workers salary for an 18 months period. Amounts determined in excess of the 18 months of workers salary is no longer made as a payment to the worker and is levied first for the benefit of the Fondo Nacional de Capacitacion Laboral y de Promocion del Empleo (National Workers Training and Employment Promotion Fund) until this entity receives from all employers in its region an amount equivalent to 2,200 Peruvian taxable units (approximately $22 million in 2009). Any remaining excess is levied as payment for the benefit of the regional governments. These levies fund worker training, employment promotion, road infrastructure and other government programs. In Mexico, workers participation is determined using the guidelines established in the Mexican income tax law at a rate of 10% of pre-tax earnings as adjusted by the tax law. The provision for workers participation is included in Cost of sales (exclusive of depreciation, amortization and depletion) in the consolidated statement of earnings. The workers participation expenses for the three years ended December31, 2009 were as follows (in millions): 2009 2008 2007 $ 134.7 $ 212.1 $ 310.9

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ASSET RETIREMENT OBLIGATION:	NOTE 10-ASSET RETIREMENT OBLIGATION: The Company maintains an estimated asset retirement obligation for its mining properties in Peru, as required by the Peruvian Mine Closure Law. In accordance with the requirements of this law the Company submitted closure plans to the Peruvian Ministry of Energy and Mines (MEM). These plans have been open to public discussion in the areas of the Companys operations and in 2009 were approved by MEM. As part of the closure plans, commencing in January2010 the Company is required to provide annual guarantees of $2.6 million over a 34 year period to furnish the funds for the asset retirement obligation. In the near-term future the Company has pledged the value of its Lima office complex as support for this obligation. The accepted value of the Lima office building, for this purpose, is $17 million. In 2009, the Company has adjusted its original retirement obligation to record the liability established in its mine closure plans. The closure cost recognized for this liability includes the cost, as outlined in its closure plans, of dismantling the Toquepala and Cuajone concentrators, the smelter and refinery in Ilo, and the shops and auxiliary facilities at the three units. The following table summarizes the asset retirement obligation activity for the two years ended December31, 2009 and 2008 (in millions): 2009 2008 Balance as of January1 $ 18.0 $ 13.1 Changes in estimates 27.9 4.1 Additions Accretion expense 3.0 0.8 Balance as of December31, $ 48.9 $ 18.0

FINANCING

FINANCING
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FINANCING:	NOTE 11-FINANCING: Long term debt: As of December31, (in millions) 2009 2008 6.375% Notes due 2015 ($200 million face amount, less unamortized discount of $0.8 million and $0.9 million at December31, 2009 and 2008, respectively) $ 199.2 $ 199.1 7.500% Notes due 2035 ($1,000 million face amount, less unamortized discount of $15.3 million and $15.5 million at December31, 2009 and 2008, respectively) 984.7 984.5 2.47% Mitsui credit agreement due 2013 (Japanese LIBO rate plus 1.25% (3.57% at December31, 2008)) 40.0 50.0 9.25% Yankee bondsSeriesB due 2028 56.4 56.4 Total debt 1,280.3 1,290.0 Less, current portion (10.0 ) (10.0 ) Total long-term debt $ 1,270.3 $ 1,280.0 In 1998, Minera Mexico issued $500 million of unsecured bonds, which are referred to as Yankee bonds. These bonds were offered in two series: SeriesA bonds which were fully repaid in 2008 with a payment of $150 million, and SeriesB for $125 million, with an interest rate of 9.25% and a 2028 maturity date. In 2007, the Company repurchased $68.6 million of the SeriesB bonds at a premium of $16.6 million, which is included in the consolidated statement of earnings on the line Loss on debt prepayments. The bonds contain a covenant requiring Minera Mexico to maintain a ratio of EBITDA to interest expense of not less than 2.5 to 1.0 as such terms are defined by the facility. At December31, 2009, Minera Mexico is in compliance with this covenant. In 1999, SCC entered into a $100 million, 15-year loan agreement with Mitsui. The interest rate for this loan is the Japanese LIBO rate plus 1.25% (Japanese LIBO for this loan at December31, 2009 was 1.2175%). The Mitsui credit agreement is collateralized by pledges of receivables on 31,000 tons of copper per year. The Mitsui agreement requires the Company to maintain a minimum stockholders equity of $750 million and a specific ratio of debt to equity. Reduction of Grupo Mexicos direct or indirect voting interest in the Company to less than a majority would constitute an event of default under the Mitsui agreement. At December31, 2009, the Company is in compliance with these covenants. In July2005 the Company issued $200 million 6.375% Notes due 2015 at a discount of $1.1 million and $600 million 7.5% Notes due 2035, at a discount of $5.3 million. The notes are senior unsecured obligations of the Company. The Company capitalized $8.8 million of costs associated with this facility and is included in Other assets, non-current on the consolidated balance sheet. The net proceeds from the issuance and sale of the notes were principally used to repay outstanding indebtedness of the Company and the balance was used for general corporate purposes. The Company filed a registration statement on FormS-4 with respect to these notes in October2005. In January2006 the Company completed an exchange offer for $200 million, 6.375% Notes due 2015 and $600 million, 7.5% Notes due 2035. In the exchange offer, $197.4 million of the 6.375% old notes due 2015 were tendered in exchange for an equivalent amount of new notes and an aggregate of $590.5

BENEFIT PLANS

BENEFIT PLANS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BENEFIT PLANS:	NOTE 12-BENEFIT PLANS: Peruvian operations The Company has two noncontributory defined benefit pension plans covering former salaried employees in the United States and certain former employees in Peru. It also has a post-retirement health care plan. Peru Defined Benefit Pension Plans. Effective October31, 2000, the Board of Directors amended the qualified pension plan to suspend the accrual of benefits. The components of net periodic benefit costs calculated in accordance with ASC 715 Compensation retirement benefits (in prior literature SFAS No.87 Employers Accounting for Pensions), using December31 as a measurement date, consist of the following: Year ended December31, (in millions) 2009 2008 2007 Interest cost $ 0.7 $ 0.7 $ 0.6 Expected return on plan assets (0.6 ) (0.5 ) (0.5 ) Amortization of net loss 0.1 (* ) 0.1 Net periodic benefit cost $ 0.2 $ 0.2 $ 0.2 (*)Less than $0.1 million The change in benefit obligation and plan assets and a reconciliation of funded status are as follows: As of December31, (in millions) 2009 2008 Change in benefit obligation: Projected benefit obligation at beginning of year $ 11.4 $ 11.6 Interest cost 0.7 0.6 Benefits paid (0.9 ) (0.9 ) Actuarial gain (loss) 0.9 0.1 Projected benefit obligation at end of year $ 12.1 $ 11.4 Change in plan assets: Fair value of plan assets at beginning of year $ 12.9 $ 12.4 Actual return on plan assets 1.2 (0.1 ) Employer contributions 3.3 1.5 Benefits paid (0.9 ) (0.9 ) Administrative expenses Fair value of plan assets at end of year $ 16.5 $ 12.9 Funded Status at end of year: $ 4.4 $ 1.5 ASC-715 amounts recognized in statement of financial position consists of: Non current assets $ 4.4 $ 1.5 Current liabilities Non current liabilities Total $ 4.4 $ 1.5 ASC-715 amounts recognized in accumulated other comprehensive income consists of: Net loss (gain) net of income tax $ 2.3 $ 2.2 Prior service cost (credit) Transition obligation (asset) Total (net of income tax of $1.2 million in both periods) $ 2.3 $ 2.2 The following table summarizes the changes in accumulated other comprehensive income for the year ended December31, related to the defined benefit pension plan, net of income tax: As of December31, (in millions) 2009 2008 Reconciliation of accumulated other comprehensive income: Accumulated other comprehensive income at beginning of plan year $ 2.2 $ 1.8 Net loss/(gain)amortized during the year (* ) (* ) Net loss/(gain)occurring during the year 0.1 0.4 Net adjustment to accumulated other comprehensive income 0.1 0.4 Accumulated other comprehensive income at end of plan year $ 2.3 $ 2.2 (*)Less than $0.1 million The following table summarizes the amounts in

NON-CONTROLLING INTEREST

NON-CONTROLLING INTEREST
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NON-CONTROLLING INTEREST:	NOTE 13-NON-CONTROLLING INTEREST: For all the years presented, in the consolidated statement of earnings the income attributable to non-controlling interest is based on the earnings of the Companys Peruvian Branch. The non-controlling interest of the Companys Peruvian Branch is for investment shares, formerly called labor shares. These shares were generated by legislation in place in Peru from the 1970s through 1991; such legislation provided for the participation of mining workers in the profits of the enterprises for which they worked. This participation was divided between equity and cash. The investment shares included in the non-controlling interest on the balance sheet are the still outstanding equity distributions made to the Peruvian Branchs employees. In prior years the Company acquired some Peruvian investment shares in exchange for newly issued common shares of the Company and through purchases at market value. These acquisitions were accounted for as purchases of non-controlling interests. The excess paid over the carrying value was assigned to intangible assets and is being amortized based on production. As a result of these acquisitions, the remaining investment shareholders hold a 0.71% interest in the Peruvian Branch and are entitled to a pro rata participation in the cash distributions made by the Peruvian Branch. The shares are recorded as a non-controlling interest in the Companys financial statements.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
COMMITMENTS AND CONTINGENCIES:	NOTE 14-COMMITMENTS AND CONTINGENCIES: Environmental matters: The Company has instituted extensive environmental conservation programs at its mining facilities in Peru and Mexico. The Companys environmental programs include, among other features, water recovery systems to conserve water and minimize impact on nearby streams, reforestation programs to stabilize the surface of the tailings dams and the implementation of scrubbing technology in the mines to reduce dust emissions. Peruvian operations The Companys operations are subject to applicable Peruvian environmental laws and regulations. The Peruvian government, through the MEM conducts annual audits of the Companys Peruvian mining and metallurgical operations. Through these environmental audits, matters related to environmental commitments, compliance with legal requirements, atmospheric emissions, and effluent monitoring are reviewed. The Company believes that it is in material compliance with applicable Peruvian environmental laws and regulations. In 2003 the Peruvian congress published a new law announcing future closure and remediation obligations for the mining industry. In accordance with the requirements of this law the Company has submitted the required closure plans to MEM and were open to public discussion in the areas of the Companys operations. These closure plans were approved by MEM in the second half of 2009. As part of the closure plan, the Company will provide guarantees to ensure that sufficient funds will be available for the asset retirement obligation. See Note 10, Asset Retirement Obligation for further discussion of this matter. Mexican operations The Companys operations are subject to applicable Mexican federal, state and municipal environmental laws, to Mexican official standards, and to regulations for the protection of the environment, including regulations relating to water supply, water quality, air quality, noise levels and hazardous and solid waste. The principal legislation applicable to the Companys Mexican operations is the Federal General Law of Ecological Balance and Environmental Protection, which is enforced by the Federal Bureau of Environmental Protection (PROFEPA). PROFEPA monitors compliance with environmental legislation and enforces Mexican environmental laws, regulations and official standards. PROFEPA may initiate administrative proceedings against companies that violate environmental laws, which in the most extreme cases may result in the temporary or permanent closing of non-complying facilities, the revocation of operating licenses and/or other sanctions or fines. Also, according to the Federal Criminal Code, PROFEPA must inform corresponding authorities regarding environmental non-compliance. Mexican environmental regulations have become increasingly stringent in recent years, and this trend is likely to continue and has been influenced by the environmental treaty entered into by Mexico, United States and Canada in connection with NAFTA in 1999. However, the Companys management does not believe that continued compliance with the federal environmental law or Mexican state environmental laws will have a material

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY
	1/1/2009 - 12/31/2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
STOCKHOLDERS' EQUITY:	NOTE 15-STOCKHOLDERS EQUITY Common Stock: In 2009 Grupo Mexico, through its wholly owned subsidiary AMC, purchased 4.9 million shares of SCCs Common Stock. With this purchase and the Companys repurchase of shares of its Common Stock, the indirect ownership of Grupo Mexico increased to 80% at March31, 2009 and remains at 80% at December31, 2009. Stock split: On June19, 2008 the Executive Committee of the Board of Directors declared a three-for-one split of the Companys outstanding common stock. On July10, 2008 common shareholders of record at the close of business on June30, 2008, received two additional shares of common stock for every share owned. The split increased the number of shares outstanding to 883,410,150 from 294,470,050. The stock split was recorded in the Companys 2008 financial statements. All share and per share amounts were retroactively adjusted to reflect the stock split. Appropriated Retained Earnings: As of December31, 2009, Company management set aside $1.8 billion of unremitted earnings, of its Mexican subsidiary, Minera Mexico, as appropriated retained earnings. It is the Companys intention to indefinitely invest these funds in Mexico. These amounts are earmarked for the Companys Mexican expansion program. See also Note 8 Income taxes of these financial statements. Treasury Stock: Activity in treasury stock in the years 2009 and 2008 was as follows (in millions): 2009 2008 Southern Copper common shares Balance as of January1, $ 389.0 $ 4.4 Purchase of shares 71.9 384.6 Used for corporate purposes (0.2 ) Balance as of December31, 460.7 389.0 Parent Company (Grupo Mexico) common shares Balance as of January1, 125.5 170.3 Sales of shares (0.4 ) (72.3 ) Purchase of shares 1.3 Other activity, including dividend, interest and currency translation effect 16.3 27.5 Balance as of December31, 142.7 125.5 Treasury stock balance as of December31, $ 603.4 $ 514.5 SCC shares of Common Stock in treasury: At December31, 2009 and 2008 treasury stock holds 34,596,086 shares and 29,696,086 shares of SCCs Common Stock with a cost of $460.7 million and $389.0 million, respectively. The shares of SCCs Common Stock held in treasury are used for general corporate purposes. SCC share repurchase program: Pursuant to the $500 million share repurchase program authorized by the Companys Board of Directors in 2008, during 2009 the Company purchased 4.9 million shares of its Common Stock at a cost of $71.9 million. In 2008, the Company purchased 28.5 million shares at a cost of $384.7 million. These shares will be available for general corporate purposes. The Company may purchase additional shares of its Common Stock from time to time, based on market conditions and other factors. This repurchase program has no expiration date and may be modified or discontinued at any time. The following table summarizes the repurchase program activity since its inception in 2008: Period Total Number of Shares Average Price Paid per Total Number of Shares Purchased

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DERIVATIVE INSTRUMENTS:	NOTE 16-DERIVATIVE INSTRUMENTS: The Company occasionally uses derivative instruments to manage its exposure to market risk from changes in commodity prices, interest rate and exchange rate risk exposures and to enhance return on assets. The Company does not enter into derivative contracts unless it anticipates a future activity that is likely to occur that will result in exposing the Company to market risk. Copper derivatives: From time to time the Company has entered into derivative contracts to protect a fixed copper or zinc price for a portion of its metal sales. In 2009, the Company did not hold any copper derivative contract. During 2008 and 2007 the Company entered into copper collar and swaps contracts to protect a portion of its sales of copper production as follows: 2008 2007 Collar contracts: Pounds (in millions) 220.5 170.5 Average LME cap price $ 4.23 $ 4.07 Average LME floor price $ 3.40 $ 3.20 Swap contracts: Pounds (in millions) 175.1 11.9 Weighted average COMEX price $ 3.87 $ 3.71 Related to the settlement of these copper collar and swap contracts, the Company recorded gains of $137.0 million and $10.9 million in 2008 and 2007, respectively. These gains and losses were recorded in net sales on the consolidated statement of earnings. Also, these gains and losses were recorded in net earnings in operating activities on the consolidated statement of cash flows. Transactions under these metal price protection programs are not accounted for as hedges under ASC 815-15 Derivatives and Hedging embedded derivatives (in prior literature SFAS No.133 Accounting for Derivative Instruments and Hedging Activities), and are adjusted to fair market value based on the metal prices as of the last day of the respective reporting period with the gain or loss recorded in net sales on the consolidated statement of earnings. Gas swaps: In the last three years Company entered into gas swap contracts to protect part of its gas consumptions as follows: 2009 2008 2007 Gas volume (MMBTUs) 306,000 460,000 900,000 Fixed price $ 3.6350 $ 8.2175 $ 7.5250 Loss(in million) $ $ (0.9 ) $ (0.9 ) The losses obtained were charged to production cost. As of December31, 2009 the Company did not hold any open gas swap contracts. Exchange rate derivatives, U.S. dollar/Mexican Peso contracts: Because more than 85% of the Companys sales collections in Mexico are in U.S. dollars and many of its costs are in Mexican pesos, the Company entered into zero-cost derivative contracts with the purpose of protecting, within a range, against an appreciation of the Mexican peso to the U.S. dollar. Related to the exchange rate derivative contracts the Company recorded gain (losses) as follows (in millions): 2009 2008 2007 Gain (loss) $ 4.2 $ (74.6 ) $ 8.6 These gains and losses were recorded as gain (loss) on derivative instruments in the consolidated statements of earnings. At December31, 2009 the Company did not hold any exch

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL INSTRUMENTS:	NOTE 17-FINANCIAL INSTRUMENTS: ASC-820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under SFAS No.157 are described below: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 - Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs. (i.e., quoted prices for similar assets or liabilities) Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable (other than accounts receivable associated with provisionally priced sales) and accounts payable approximate fair value due to their short maturities. Consequently, such financial instruments are not included in the following table that provides information about the carrying amounts and estimated fair values of other financial instruments that are not measured at fair value in the consolidated balance sheet as of December31, 2009 (in millions): Balance at December31, 2009 Carrying Value Fair Value Liabilities: Long-term debt (*) $ 1,280.3 $ 1,287.6 (*) Long term debt is carried at amortized cost and its carrying value as of December31, 2009 is $1,291.4 million. The $1,287.6 million represents the estimated fair value of the debt. See Note 17 Financial instruments for ASC-825-10-50 fair value disclosures. Fair values of assets and liabilities measured at fair value on a recurring basis were calculated as of December31, 2009 as follows (in millions): Balance at December Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs 31, 2009 (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 22.9 $ 19.8 $ 3.1 Provisionally priced sales: Copper 4.1 4.1 Molybdenum (16.2 ) (16.2 ) Total $ 10.8 $ 7.7 $ 3.1 The Companys short-term investments are classified as Level 2 because they are valued using quoted prices for similar investments. The Company classifies investments within Level 3 of the valuation hierarchy in certain cases where there is limited activity or less observable inputs to the valuation. Investments classified within Level 3 include corporate bonds, asset backed obligations, and mortgage-backed securities. Derivatives are valued using internal models that use as their basis readily observable market inputs, such as time value, forward interest rates, volatility factors, and current and forward market prices for foreign exchange

CONCENTRATION OF RISK

CONCENTRATION OF RISK
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONCENTRATION OF RISK:	NOTE 18-CONCENTRATION OF RISK: The Company operates four open-pit copper mines, five underground poly metal mines, three smelters and eight refineries in Peru and Mexico and substantially all of its assets are located in these countries. There can be no assurances that the Companys operations and assets that are subject to the jurisdiction of the governments of Peru and Mexico will not be adversely affected by future actions of such governments. Much of the Companys products are exported from Peru and Mexico to customers principally in United States, Europe, Asia and South America. Financial instruments, which potentially subject the Company to a concentration of credit risk, consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable. The Company invests or maintains available cash with various banks, principally in the United States, Mexico, Europe and Peru, or in commercial papers of highly-rated companies. As part of its cash management process, the Company regularly monitors the relative credit standing of these institutions. At December31, 2009, SCC had invested its cash equivalents as follows: Country % of total cash % invested in one institution Abroad 65.6 % 30.6 % Peru 18.0 % 86.2 % Mexico 16.4 % 77.8 % During the normal course of business, the Company provides credit to its customers. Although the receivables resulting from these transactions are not collateralized, the Company has not experienced significant problems with the collection of receivables. The Company is exposed to credit loss in cases where the financial institutions with which it has entered into derivative transactions (commodity, foreign exchange and currency/interest rate swaps) are unable to pay when they owe funds as a result of protection agreements with them. To minimize the risk of such losses, the Company only uses highly-rated financial institutions that meet certain requirements. The Company also periodically reviews the creditworthiness of these institutions to ensure that they are maintaining their ratings. The Company does not anticipate that any of the financial institutions will default on their obligations. The Companys largest customers as percentage of accounts receivable and total sales were as follows: 2009 2008 2007 Accounts receivable trade as of December31, Five largest customers 37.4 % 61.7 % 45.4 % Largest customer 11.2 % 21.5 % 22.4 % Total sales in year Five largest customers 35.1 % 35.8 % 39.6 % Largest customer 8.5 % 10.6 % 12.4 %

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RELATED PARTY TRANSACTIONS:	NOTE 19-RELATED PARTY TRANSACTIONS: Balances receivable and payable with affiliated companies are shown below (in millions): As of December31, 2009 2008 Affiliate receivable: Grupo Mexico S.A.B de C.V. and affiliates $ 1.5 $ 0.8 Ferrocarril Mexicano, S.A. de C.V. 1.4 0.3 Mexico Proyectos y Desarrollos S.A. de C.V. and affiliates 1.6 0.8 $ 4.5 $ 1.9 Affiliate payable: Grupo Mexico S.A.B. de C.V. and affiliates $ $ 8.9 $ $ 8.9 The Company has entered into certain transactions in the ordinary course of business with parties that are controlling shareholders or their affiliates. These transactions include the lease of office space, air transportation and construction services and products and services relating to mining and refining. The Company lends and borrows funds among affiliates for acquisitions and other corporate purposes. These financial transactions bear interest and are subject to review and approval by senior management, as are all related party transactions. It is the Companys policy that the Audit Committee of the Board of Directors shall review all related party transactions. The Company is prohibited from entering or continuing a material related party transaction that has not been reviewed and approved or ratified by the Audit Committee. Grupo Mexico, the Companys ultimate parent and the majority indirect stockholder of the Company, and its affiliates provide various services to the Company. These services are principally related to accounting, legal, tax, financial, treasury, human resources, price risk assessment and hedging, purchasing, procurement and logistics, sales and administrative and other support services. The Company pays Grupo Mexico Servicios S.A de C.V., a subsidiary of Grupo Mexico for these services. The Company expects to continue to pay for these services in the future. The Companys Mexican operations paid fees primarily for freight services provided by Ferrocarril Mexicano, S.A. de C.V., a subsidiary of Grupo Mexico. In addition, the Companys Mexican operations paid fees for construction services provided by Mexico Constructora Industrial S.A. de C.V., an indirect subsidiary of Grupo Mexico. The Larrea family controls a majority of the capital stock of Grupo Mexico, and has extensive interests in other businesses, including oil drilling services, construction, aviation, and real estate. The Company engages in certain transactions in the ordinary course of business with other entities controlled by the Larrea family relating to mining and refining services, the lease of office space, and air transportation and construction services. In connection with this, the Company paid fees for maintenance services and sale of vehicles provided by Mexico Compaia de Productos Automotrices, S.A. de C.V., a company controlled by the Larrea family. Additionally, in 2007, the Companys Mexican subsidiaries have provided guaranties for loans totaling $10.8 million obtained by Mexico Transportes Aereos, S.A. de C.V. (MexTransport), a company controlled by the Larrea family. These loans mature in 2010 ($2.3 million) an

SEGMENT AND RELATED INFORMATION

SEGMENT AND RELATED INFORMATION
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEGMENT AND RELATED INFORMATION:	NOTE 20-SEGMENT AND RELATED INFORMATION: Company management views Southern Copper as having three operating segments and manages on the basis of these segments. Each of its segments report independently to the Chief Operating Officer and he focuses on operating income as a measure of performance to evaluate different segments, and to make decisions to allocate resources to the reported segments. The three segments identified are groups of mines with the similar economic characteristics, type of products, processes and support facilities, similar regulatory environments, similar employee bargaining contracts and similar currency risks. In addition, each mine within the individual group earns revenues from similar type of customers for their products and services and each group incurs expenses independently, including commercial transactions between groups. Intersegment sales are based on arms-length prices at the time of sale. These may not be reflective of actual prices realized by the Company due to various factors, including additional processing, timing of sales to outside customers and transportation cost. Added to the segment information is information regarding the Companys sales. The segments identified by the Company are: 1. Peruvian operations, which include the Toquepala and Cuajone mine complexes and the smelting and refining plants, industrial railroad and port facilities which service both mines. The Peruvian operations produce copper, with production of by-products of molybdenum, silver and other material. 2. Mexican open-pit operations, which include La Caridad and Cananea mine complexes and the smelting and refining plants and support facilities which service both mines. The Mexican open-pit operations produce copper, with production of by-products of molybdenum, silver and other material. 3. Mexican underground mining operations, which include five underground mines that produce zinc, copper, silver and gold, a coal mine which produces coal and coke, and several industrial processing facilities for zinc and copper. This group is identified as the IMMSA Unit. The Peruvian operations include two open-pit copper mines whose mineral output is transported by rail to Ilo, Peru where it is processed at the Companys Ilo smelter and refinery, without distinguishing between the products of the two mines. The resulting product, anodes and refined copper, are then shipped to customers throughout the world. These shipments are recorded as revenue of the Companys Peruvian mines. The Mexican open-pit segment includes two copper mines whose mineral output is processed in the same smelter and refinery without distinguishing between the products of the two mines. The resultant product, anodes and refined copper, are then shipped to customers throughout the world. These shipments are recorded as revenues of the Companys Mexican open-pit mines. The Company has determined that it is necessary to classify the Peruvian open-pit operations as a separate operating segment from the Mexican open-pit operations due to the very distinct regulatory and political environments in which they operate. The Companys Chief Operatin

QUARTERLY DATA

QUARTERLY DATA (unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTERLY DATA (unaudited)	NOTE 21-QUARTERLY DATA (unaudited) (in millions, except per share data) 2009 1st 2nd 3rd 4th Year Net sales $ 622.0 $ 824.5 $ 1,151.8 $ 1,136.0 $ 3,734.3 Gross Profit $ 246.5 $ 405.0 $ 621.9 $ 637.2 $ 1,910.6 Operating income $ 144.1 $ 303.2 $ 508.7 $ 529.1 $ 1,485.1 Net income $ 79.2 $ 176.0 $ 314.2 $ 365.1 $ 934.5 Net income attributable to SCC $ 78.7 $ 175.0 $ 312.4 $ 363.3 $ 929.4 Per share amounts attributable to SCC: Net earnings basic and diluted $ 0.09 $ 0.21 $ 0.37 $ 0.43 $ 1.09 Dividend per share $ 0.12 $ 0.04 $ 0.10 $ 0.18 $ 0.44 2008 1st 2nd 3rd 4th Year Net sales $ 1,499.2 $ 1,461.8 $ 1,440.1 $ 449.7 $ 4,850.8 Gross Profit $ 978.6 $ 911.4 $ 794.3 $ (15.7 ) $ 2,668.6 Operating income $ 864.7 $ 792.4 $ 676.0 $ (131.2 ) $ 2,201.9 Net income $ 567.7 $ 551.3 $ 420.4 $ (124.9 ) $ 1,414.5 Net income attributable to SCC $ 565.0 $ 548.5 $ 417.8 $ (124.7 ) $ 1,406.6 Per share amounts attributable to SCC: Net earnings basic and diluted $ 0.64 $ 0.62 $ 0.48 $ (0.14 ) $ 1.60 Dividend per share $ 0.47 $ 0.57 $ 0.57 $ 0.33 $ 1.94 All the per share amounts prior to 2nd quarter 2008 had been restated to reflect the Common Stock split.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUBSEQUENT EVENTS	NOTE 22SUBSEQUENT EVENTS DIVIDENDS: On January28, 2010 the Board of Directors authorized a dividend of 43 cents per share to be paid on March4, 2010 to shareholders of record as of February19, 2010. CANANEA STRIKE: On February11, 2010 a Mexican Federal Labor court ruled that the damages caused to the Cananea mine by the neglect and sabotage of striking workers since the commencement of the labor stopagges in July2007 resulted in force majeure providing legal basis for the termination of individual and unionized employees by the Company. The Company expects due compliance of the referred ruling by the relevant federal and state authorities and looks forward to recovering control of the Cananea mine.

Schedule II - Valuation and Qua

Schedule II - Valuation and Qualifying Accounts and Reserves
	12 Months Ended Dec. 31, 2009 USD / shares
Schedule II - Valuation and Qualifying Accounts and Reserves
Schedule II - Valuation and Qualifying Accounts and Reserves	3. Schedule II Valuation and Qualifying Accounts and Reserves(in millions): Additions Balance at beginning of period Charged to costs and expenses Other Deduction Balance at end of period Reserve deducted in balance sheet to which applicable: Accounts Receivable: 2009 4.8 0.2 4.6 2008 4.6 0.4 0.2 4.8 2007 6.0 1.4 4.6 Supplies: 2009 36.7 4.2 1.6 39.3 2008 30.4 6.4 0.1 36.7 2007 27.7 3.0 0.3 30.4 Notes issued under par: 2009 16.4 0.3 16.1 2008 16.7 0.3 16.4 2007 16.9 0.2 16.7 Deferred Tax Assets: 2009 28.6 2.2 0.3 30.5 2008 34.1 5.5 28.6 2007 62.7 28.6 34.1

Document And Entity Information

Document And Entity Information (USD $)
In Millions, except Share data	12 Months Ended Dec. 31, 2009	Jan. 31, 2010	Jun. 30, 2009
Document and Entity Information
Entity Registrant Name	SOUTHERN COPPER CORP/
Entity Central Index Key	0001001838
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$3,475
Entity Common Stock, Shares Outstanding		850,000,000