SCCO - Earnings call 1 2021 | Southern Copper Corporation

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Operator

Good morning, and welcome to the Southern Copper Corporation's First Quarter 2021 Results Conference Call. With us this morning, we have Southern Copper Corporation, Mr. Raul Jacob, Vice President, Finance, Treasurer and CFO, who will discuss the results of the company for the first quarter 2021 as well as answer any questions that you might have. The information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions, do not place undue reliance on these forward-looking statements.

Southern Copper Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether a result of new information, future events or otherwise. in expressed are results full U.S. All GAAP.

pass I'll the call Jacob. Raul Mr. to on Now

Raul Jacob

much, morning, Call. Jenny. to very CEO Mr. you Thank Good Southern Rocha, First I accompanied Copper's XXXX Oscar conference, Gonzalez Southern Board everyone, Quarter Results today's Conference member. At and am by Copper's welcome and

today's my begin during the you and for an into go past these we the we wishes times. of the measures will bay. quarter, have keep loved best ones call, let update on Before taken details me with COVID-XX trying In first we express that your at to

session We for questions. copper production, the and market results costs, operating Copper's the financial results key we will for then sales, Subsequently, expansion and review projects. Southern open will

together the to this imposed say those regard, to normalizing the and workers begin Mexico operating recovery. In resume their new of requires virus, the peace which to vaccination provides Sonora of has that the of innovation first have the age Southern significant state to our Copper Nacozari and positive operations development. and XXX% by with installations. since at needed our has value XX XX% believe COVID-XX have over of economic in protect workers Through its The the a government, efforts, in generate allows and this at and solidarity. a the and of me virus event the of personnel our personnel XXX% pandemic, on Similarly, levels medical vaccine. This the that endeavor, we work in also carried have give faced been fuel the the challenges resilience, society protection us of we Cananea, received vaccinated. out against and families mind world companies citizens represent that beginning normal as been growth, Let company

rollout. vaccination by providing this the logistical Our support during contributing effort to company is

us market, the core our of let business. on Now focus the copper

increased For per average quarter copper, $X.XX the in pound XXXX, price a per pound. from an quarter $X.XX Exchange copper up first is prices. That first in increase of XX.X% to the the copper of of XXXX, London Metal in

the by green market this COMEX considered a inventory. at global reflected in in trillion is at which which positive warehouse London combined of a The relatively today, the to consumption element recovery the and significantly number should low per houses intelligent we're most for bonded $X an levels, copper, following demand, X.X%. expecting of the remain automobile the the seeing increase bodes copper days $X.XX are important the are for in first recovery by inventories Biden Exchange, market significant a point. about of fundamental this copper be a market. We Metal pound, XXXX warehouses market deficit of industry outlook market at at in increase announced of prices The As XXXX. over factors for influencing the package X.X% this of was and due given between sales demand Shanghai XX% in President will facilities. The The particularly which energy quarter infrastructure believe the year

and in Mexico. this mine our La first Peruvian was at the quarter grades. was driven of registered sales compared in ore production mines production in year of Copper Southern quarter to first XX.X% Now year. attributable decrease Copper's and year. let in XXX,XXX this situated slight represented X.X% for last a Copper by production This lower Caridad to the at primarily past of us first the look our quarter quarter. the tons This a at of decrease of

XX.X% production the of $XX.XX at XXXX. in in a is it the quarter mines, the increase. And IMMSA the year due company production in our by prices operations, of and pound currently by recovery and partially first was production our this quarter it grades first represents Martin an in of This by-product. of period which represented due compared quarter first increased of This XX% average X.X% Molybdenum San Molybdenum increased value molybdenum our to first decrease production our a to production recoveries. offset increase sales in higher per in of the mine in by grades. by due Buenavista was to production the quarter compared at spurred to slightly XXXX additional higher mine. Molybdenum also production was at XXXX. the offset partially However, mainly of same by about X.X% to of lower $X.XX in Peruvian an a was XX.X%

For the value was year facilities. Zinc quarter silver silver higher represented Mined Silver Toquepala. X.X% the production is second IMMSA X.X% We of sales first Buenavista, $XX.XX our partially to by due at increased by first the first the X.X% production by mine tons. after the an of X% quarter, our at of silver facility. fire quarter increase zinc this to first price quarter production year. by to lower quarter-on-quarter Santa shutdown Barbara was currently primarily represented and period this This of average This to our grades the Luis XX.X% price in year quarter. temporarily refinery. of same the production production price Caridad of of in fell to from of the find byproduct. our Refined the an of silver, it in Charcas, by of Eulalia flooding. is in with a in in $X.XX production a with zinc value in production operation of has our the San same quarter operations. Potosí the from and of last first mainly higher attributable This offset and compared decreased This at year ore period to the per reduced in XXXX. from sales to severe at our first decreased this the year last of IMMSA the the in XX.X% operation of Santa at Cuajone XX.X% decreased and first quarter ounce average due a XX,XXX this pound up quarter the XX.X% per quarter year situate XXXX of Zinc due a capacity

financial results, sales XXXX. our XXXX, For were of billion, of sales the higher quarter than is first $XXX.X the in the million first quarter which for $X.X

XX.X% by Our while by volume total. prices. better sales by a of value Copper scenario increased sales X.X%, increased to the XX% due in decreased

XX.X% prices As I by past increased said, copper quarter. during the

we increase molybdenum to due better for XX.X% and increased Prices of XX.X% that by byproducts, main our sales. molybdenum. sales And for higher molybdenum mainly complete have prices. Regarding in XX.X% sales reported the adjustment open by we

X.X% increased higher an partially due also For of to was increasing In volume better zinc refined offset prices. XX.X%. to sales volumes silver, by This of sales results due were increased price. zinc by this lower partially case, offset XX.X%, prices by These and by zinc. of

increase a Our material. copper parties cost to driven by of or reductions $X.X in and -- cost total figures expenses participation, increase for costs, an reductions in from These decreased in and to main shortage diesel workers' consumption compared cost uptick of operating a capitalized an quarter. by third for were due higher were million offset fuel partially the leachable in The the period energy inventory X.X% by increasing decrease XXXX. Mexico, gas in temporary the an purchases cost and an same when Northern

also minor a We and value. other depreciation higher had factors for

about have the that due the on temporary that temporary increasing focus increase of we February million $XX.X consequence an represented scarcity That shortage in cost a in to Mexico. part me of of in we energy gas gas northern had as natural first quarter. Let the of the in

$XXX.X quarter this quarter in EBITDA year an represented than first million. of first was same the compared was higher was which adjusted and basis, in adjusted the that quarter of fourth quarter where EBITDA year. a first XXX.X% the XX% compares in with EBITDA adjusted Our last XX.X% XXXX. 'XX quarter-on-quarter The of period margin On of EBITDA XX.X%, of XXXX, increase the to million, the $X,XXX.X was

For the the higher This higher than quarter the fourth for pound This before is XXXX. cost cash per copper of cost, in pound quarter XXXX. operating per the value was compensated $X.XXX $X.XX cash of by partially in administrative byproduct cost credits of expenses. first and a pound increase cash operating were lower charges administrative lower treatment refining is of per from cost and production result X.X% lower which cost premiums, and -- and

$X.XXX Southern of of than a credit per pound including the byproduct increase This of XXXX. cost first was in cost. we cash $X.XXX fourth XX% higher had is cash cost in the this cash in that of $X.XXX the was the year. quarter Copper cash operating quarter That cost, benefit

credits figures for molybdenum, this of per gold first or of in XX.X% investments. compared of of credit quarter this or of and first million, to total sulfuric income pound increase that acid have was decreased our represent increased a year a Regarding when X% the of zinc. Net per and $X.XXX of in byproducts, we diluted is quarter These $X.XX. Capital the credit silver, quarter for SCC share shareholders a attributable sales earnings had $XXX.X million per $X.XXX XXXX. fourth Total $XXX.X the in year. pound to

review has our strengthening measures the that project periods consistently constantly is As develop. philosophy on measures, by under know, we vulnerability years, but on efforts considerable investments prices conditions us assets have the social asset not in the sanitation distance quality include the which and investment at allowed us strong copper to and rules, to led to implement execution you financial ongoing for requiring our Southern personnel. based Throughout portfolio. discipline enforcing quarantine outlook level. These Copper's reduce of make operate generated for COVID-XX the are The

which some on regions delays. albeit Mexico point. new minimal stage, Consequently, execution we rise, located project delays, patients cases the Peru in expect the or of where this are at in activities Some have are in experienced

we All are with delays million project. date, quarter our and for regard to on that XXX% that accounted activities entail the in interaction of between these expect our represented increase close investments, of procurement personnel of capital construction on the XXXX to and Nevertheless, first personnel XXXX, in same $XXX.X construction limited activities engineering, scale. In which net delays period work proximity. spent of affect require income. to the investment XX.X% physical primarily execution other We

$X.X commitment will billion, our Los and up been $X.X total reflect coming $X.X X invested. Peru projects of $X.X Peru billion For budget, approved If in include billion. budget, of investment Chancas portfolio $X.X in these a the projects, totaled the billion our to we already Peruvian Michiquillay million increase has which projects and for program

project the Islay the of Southern province Peruvian been population. working consistently Tia welfare For in the promote located region has that Maria, Copper of Arequipa, a is to

improve the these the in As of education, efforts, part care of life productive successful to in quality implemented programs social we development health and region. have

We the this [ in assist during in the efforts have the a promoted Tambo Valley in XXXX agricultural livestock the to COVID-XX suppored XXXX and and Islay. On activity population mayor is to of pandemic. and Diploma past January ], quarter, tourism in also recognition Copper fishing (sic) of growth Islay City company's the Southern the of province awarded manufacturing, Islay X,

provided influence economic area of generate Arequipa stuff Copper opportunities Tia at Southern province oxygen, region. medical protection the reiterate significant population project. We the and for and personal food will Islay equipment activities the Maria initiation view of Maria tests, of that the construction the the our for assistant, Tia in

growth on cycle. is sustainable Peruvian Given stimulate situation, current ahead will to crucial move the projects economic a it that

make labor Tia which X,XXX expect generate the and we expect and Maria and the operating, phase, the a local provide for Maria's jobs jobs jobs are X,XXX workers When phase. of X,XXX Tia priority indirect XXX direct During to during will we we fill to another are X,XXX. construction to employ construction operation directly indirectly to that it hire

the X day royalties will generate via in contributions from significant our to of and Additionally, taxes. we region revenues operations, Arequipa

adequate and will the project Peruvian progress for the that steps social acknowledge economy front construction. the to has the to support Tia on for government company to take Peru's provide consequently, with and generate expect the initiate Copper Maria We the Southern necessary significant contributions this made important

of concentrator copper zinc the Buenavista development produce state tons Sonora XX,XXX For tons have concentrator in and year. produce our our is a of Buenavista, XXX,XXX Mexican the a In the to to of new new This projects. Mexico. per zinc we project operation approximately concentrate. at includes

to combat engineering We complete. In the the stronger to for been detailed order orders put continue have and study the engineering study project, been major is measures has have placed equipment. place. Purchase completed with XX% preventive basic COVID-XX in

site. shipped $XXX the are As and project or The budget are being the necessary been part process permits the of the million. elements already this at is mill capital process, project manufacturing completed the has has and respective all

capacity When company's completed, in XXX to zinc initiate the and facility direct jobs. will X,XXX double provide operations expect jobs production this new indirect We XXXX. and

begin grade, built million, La to used for the with ore from in Caridad. the Mexico, La in For the copper in kilometers kilometers and transport annual ore quarter grade from be copper expected Caridad. that for copper which is Its of cost-efficient tons the Sonora ore of SX-EW project to first production Buenavista concentrate. with X.XX% the from the pit project, [ average tons for X with production A It in El crushers environmentally reserves is state from located new proven and The concentrate. of significantly and capacity mine combining we next a cathodes. million. as use a with open our contains of a conventional facility an the highly project ore overall the of XX Mexico will and with intensity project, mining operation at XX-meter an El Pilar operate X.XXX% This oxide technology. This been XX,XXX of probable is the of operation Pilar consists also Pilares tons strategically pit of this has ]. We located will annual Caridad $XXX is budget that XX,XXX an at will off-road will La The from mineral copper open-pit mineralization X.XX% is of ore million an is anticipate project estimated trucks primary friendly $XXX of Pilares capacity production wide Pilares (sic) XXX copper low-capital mine. mine Pilar greenfield expect improve about X.XX% year. El budget Sonora, copper

results the levels of the be expect mine pads to to copper experimental XX start recovery. from the company adequate The site have is expected XXXX engineering started the The collection. leaching in process species and in project the basic project We production has life years. confirmed and

the open-pit this of For El deposit, California has to a tons gold Baja California of with at started peninsula. X.X gold And basic ore $X.X considers SX-EW is and grams is with Arco, of the an XXX,XXX the and construction And located combining reviewing operations. a project we byproduct, the reserve the X.XX central ton. The ore located is ounces at expected X.X XXX,XXX an request analysis leach of mine The has environmental capital production permit. with which billion grade billion estimated have contains an budget concentrator part The tons copper to and company mineral the It of that is project at billion. of study a engineering is per Baja world-class ore grade over annual of impact of as copper to baseline X.XXX%. of an the tons material that, X.XXX%. of peninsula, situate

And acquiring all land XXXX, several corresponding during the concessions we had years the needed. now. for have We mining finished

a governance ESG. have section release, social -- to of press You of have that we environmental, or are noticed issues new matters investments the added which we our tackles government and the -- may

Copper adopting committed improving communicating its practices by matters. record Southern this to progress best investment is in our community ESG and to other the stakeholders and

and company's the S&P development to subsidiaries, In These Sustainability share on our Southern SCC stakeholders. In listed this second to generate Dow Copper year, sustainable and recently regard, the company's updated. promote Jones policies for vision, Index policies formalize applicable are and objective and was consecutive sustainable XXXX, its were the for the value MILA. commitment development

Oxygen plants main Plant -- adjust government the Ilo to over same oxygen increased produce and the is points with is Plant oxygen. the has of tanks XXX Southern coordinating cubic on Peru's tons What to being to -- have week in X. central the and our plant fight represents been is -- extremely oxygen during Peruvian number liquid number oxygen equivalent been to is investment. The to our score with by to of This X used tons production XX X which is level. In in where been regions, we but donate element or adapt X of been X-point Annual need main the record with in move The liquid on facilities of already has XXXX oxygen government industrial Copper Sustainability XXX,XXX and scarce. producing and company past, meters oxygen, done Global already which our it Peru, oxygen, committed has a -- oxygen medicinal our XX has supply given this hospital the to adapted X,XXX the Additionally, and pandemic, of period. and Assessment to supply our per produce supplier Peruvian liquid of together number the increase to of S&P COVID adapt, worked supplier medical oxygen, done, southern each. our it's decided oxygen company X to this time

X,XXX March tons of donation. or of have XX, the of As committed delivered liquid oxygen we XX%

In performance. addition to programs remotely. global with to are be will cubic we provide consolidating XX% workshops day donated which to increase XXX,XXX migrated the the and this these plants X mobile days and XXXX. Minera remote to oxygen. XX roll online terms a were reproduced quarter Alongside continue educational occupational in school-age we since capacity company's each in to award of dropped an Casco of the in COVID-XX. Last Mexico we're for the of platforms. under been oxygen the of X,XXX the held, the more X distinctions, education Mining or represents of Chamber the million networks, and year, and to social over year, in than rates no health second efforts, lost XXXX. In oxygen safety consecutive school safety on X Mining Southern and towns pandemic, respectively. good sufficient XXX this award of plants first users Copper obtained developed sponsored for effort, Mexico by a diverse companies approximately as out grouped students. tons survey compared which meters transported fight different of mining virtual such to model, Plata, are lack recipients which Mexico workshops to X,XXX compared XXX educational company which year, from of development March, of year, their accident pandemic. Last underground by programs, sizes XX% that These to Chamber and Mexico, with virtual was able X,XXX fatalities medical refining. the includes per performance Peru, has conducted smelting This cope offered the were XX%, beginning of registered the division To that by the de open continue Last year of mining community XX determines to centers community into a the categories, by students school to by and programs supply marked The community, against mining, since

mind, of business open gentlemen, at would of the thank on dividend. XXXX. With on Regarding is policy to financial for dividends, May ladies per the determine position, this Directors at we to market quarterly us, XX, you and cash review much the expected meeting authorized April capital now and generation other May Accordingly, questions. XX investment stock shareholders of a it Board as joining needs of common very company's Board of the to like close announced appropriate company's the up from for the on you plans to and phone the record each know, cash payable dividend as share in to operations, flow $X.XX XX, cash

Operator

comes Bank [Operator Instructions] of from America. Tanners from Timna question our And first

Timna Tanners

quarter guidance, I And run Hope look ahead we bit the about upcoming rate. are but ask are wanted silver In volumes to run how in particular, is quarters. of more to doing copper first below. your rate you're a the the you your well. think annual about little below if CapEx, at in for

just the any about the you're progress thinking would So be on great. how year update for

Raul Jacob

that Basically, a tons bit our what beginning regard we're number Timna. the tons, the through question, your little Even that copper. in in how expecting for we're this keeping but forecast. we see much point, the very forecast. our still be of production, more initial forecast At though year. you we to XXX,XXX may we maintaining mentioned it the year, than higher XXX,XXX At like believe to Thank we're we that produce looks evolve of

we budget. more Regarding some our have in maintaining we're doing CapEx, certainly catch-up that Please that couldn't work done of activity that also mind require will through will regard. our and be XXXX, keep we some that in

which forecast year, for of the beginning billion the this for year, Our is $X.X same that had current considers the we capital expenditures at of XXXX.

Timna Tanners

Okay.

can there. So some that Is it and up, CapEx in right? is ramp like sounds catch-up implied

Raul Jacob

Yes.

more me the relatively you -- beginning Let half that certain have rate, run usually, the little budget The well approved. mentioned, second on bit initiate catch reason comfortable has a than your comment is maintaining our as you this for run question. year say, rate, at of is with year. we're That's year. in the why capital been slower of the of you relatively the budget up new current for higher usually a And and why projects once CapEx that the the process

Timna Tanners

I if could, And one more. Okay.

from a of which prices lead sense. to we've hearing of On makes many been side, that the cost higher the higher miners lot costs,

to a talk talked in to off are what we about there mindful to But little us But that copper coming higher COVID be measures may be other should inflationary help prices, change measures that costs of, QX. coming you higher in are quarters. we You follow? if any like expect should or costs. to bit other factors from about think QX about Freight also factors higher, could

Raul Jacob

than much that. That a -- already natural first We're the in are had gas. quarter, we and has seeing onetime time. gas, year had Obviously, which now prices last not this event, had higher we the at scarcity what passed. price fuel higher We is for

Mexico you appreciations, least But point, rate We the in at at this significant exchange anything our may impact cost that point, prices and at -- this are reflect this we at -- mentioned, fuel, that. than may seeing we're both at as not seeing we're in higher mentioned for this certain seeing other Peru prices point. that obviously, I rate materials. on And future not are not point, that an on higher not exchange

that the catching that because Let the certain me We quarter and of XX% operating credit something not cash question, before That fourth in add cost were workforce $X.XXX we what And increase at last that's XXXX byproduct else was your we case explains operation and little doing our to seeing increased Timna. very cash year. And basically bit. some We're about It is that's a workforce. maintenance stripping what cost had in due credits. close catch-up the basically beginning certain up corporation the of is from are that now we're before the and the the to in in average. were being the maintenance total at XXXX the our now. company of the COVID now. stripping is done certain postponed XX% were of doing in at with some at that to jobs and you are other operations other byproduct beginning, pandemic. At works part That

this of year. from our a which have copper, ] we tailwind tail as prices much wind as of the Now more [ cash price the cost coming byproducts is well certainly helping attractive our (sic)

Operator

from from comes Lofiego Thiago Bradesco BBI. question next Our

Thiago Lofiego

Tia Los can be the just could bit risk higher projects? And completely royalties, other is risks regulatory of in or the in perceive changes if the about this times Are those do concessions Mexico. for more Raul, quiet elections Any on about other that a talk question you And Chancas? projects, seeing? be earliest the stalled ahead years point? more the the start-up timing the that And How accelerate for potential those? and is Is for also, any you're more you Michiquillay, large regulatory now? conversations risk questions. there this could Two what any side Maria. Or -- could what way for you here? little second at

Raul Jacob

the your by this see the on -- of don't point we don't a Let me question. start second part risk front. at I regulatory

and don't as Mexico seen the in specifically they materialized regulatory things industry, beginning the at affecting are audience that, now. the or are We see have we taxation You increasing concerns in well, comfortable administration our were current with all about, matters. that and some has the of

Regarding first, was beginning we well, for projects have, large that of the question. for Tia the Maria your that

fight We Maria. In that have of are case been their with from the due received working in of I the civil province is Michiquillay, population, projects, the actually that That the a a authorities. obtaining received other where in improvement the contribution the both take the area mentioned, the is reflected, way the regarding very was to and we they recognition to we is project of has the recognition beginning at company company the I pandemic. Tia the of good the that that society, And the as of reflects the which year. time. And think it the Mayor

We presented with local to that the exploration we're the We currently bit little it's expecting did comply presented for to authorities. first approval, more Michiquillay, project. initiate And a For -- this signing with that in environmental Peruvian study We a new agreement also already we're already environmental it about February to X usually an than takes the -- need of an the close communities that. the very months. to the year. -- at

case final at But environmental for this in Michiquillay. In will and can, forecast their we we hopefully, If point, regard. approval time been of this may has currently the that working the Good of feedback environmental bit. our progress to environmental little the study. we're do close will we're get So the impact We are assessment. accelerate -- current that. we to first Los where we the obtained holding Chancas, on a project

relatively Los to we're moving are Chancas. for So how forward comfortable things

I think X date And major projects. that these start-up moving already. we I not have we're covered the the projects for that

will keen it it. Maria, which to case will to it believe success expected we key For opportunity competitive best the in is XXXX; operation, Chancas, an getting moving we projects, see by with very production Los results project have to the in If these Michiquillay, be we'll a and for good next take our the Tia shareholders. first, XXXX. the community year, faster be elements initiate of is obviously XXXX; company's and design delivering on we to of for of investment one the But

Thiago Lofiego

And quick after would Arco just El right? a X, be then follow-up. those

Raul Jacob

for project. be, XXXX will Arco as with the commented expected is on Mexican Arco yes. El El haven't I well Michiquillay.

do that. thought to I for Arco... Let ones, referred that but Peruvian me you El

Thiago Lofiego

Yes, just no, general. sorry. Yes, Yes. in

Raul Jacob

Yes.

XXXX. it El by Arco, expected to For initiate is production

As we We that all we already the process. finished reported, necessary have land.

have all concession. the We

So in on a -- much the with with in past. move more we can more we were comfortable project a position now than much the

For El Pilares, as to said, in it in for and I are expecting, XXXX, initiate we Pilar XXXX.

Thiago Lofiego

XXXX, Raul. imagine project. from But studying for example? final which project, first you mentioned to for holding here, project, about you Los considering the Chancas, big you Tia the XXXX is very this future, that And mentioned right, from question start-up. the example, think best first would which and is What's I you making you When Yes. up Maria in you years X you sure room here back into it's really guys. for that understand accelerating have there right? project, I the guys are start

is to really this make a there you to If would could, couple of happen? accelerate maybe something right? that you years, want impossible Or

Raul Jacob

that's be take and were facilities why some built will the a to have other moving this. in and has land we are not to work done order trains will be the Certain that ready while,

mentioned, frame well it an unusual for looks time you As longer like that.

for which equipment things how done, critical the the performing, to also instance, be or can of certain deliver that accelerating is there build are on requesting it to industry delivery we do could and that us depend key equipment is, Now on and the advance.

So at want the I have, we as us the -- have forecast concentrator time. save we the And mills say, could maintain ready deep some to this we that's that mentioned, to that point, is for install. it. But and

these have company cost in the it. Please be if not fact has in us mind a but in capital catch-up follow. been accurate time cost careful in time reduce that that allow budgets, they that move they to We will that as very there report is on to wise, with the developing very, regard capital we line that wise, keep also the should in only the

construction project, to sure initiate that with that the you if we at has have you the record, failed be both project company time the we our why line the and indicated a we very So see comply want that budgets budget. project won't when That's capital very, with the see will for time. the have track the we we that for

Operator

comes De question from next Carlos Morgan Alba from Stanley. Our

Carlos de Alba

I is and with fine hope you families. everything your

I -- questions. on several have question a Just

was than the So better, the the on first one, guidance if maybe mentioned I I certainly it quarter-on-quarter, year. for increased may, cost least when and expected you think, byproducts, better than cash it is why before I at

byproducts? So could there cash you this how the maybe level of revision of in cash are? any for guidance elaborate the sustainable before costs is cost terms to year And

Raul Jacob

about that, regarding where prices cost event that's gas as quarter. have we the unexpected and say, and availability to first up cash an our have works, certain I we're expect we we think now. cost, with in We and are the catching Well,

also, the byproduct a of And regard certainly sales XXXX. to we getting rest of will and zinc byproducts and as we're for stronger and the And recuperate be better should initiate year the then And help, removed prices. production focus that production of on, refinery that well, from zinc $X.XX. prices for we between they our gas rest in the that going rest are that plants. spike have seeing say that that let's we're in to to of have refined better -- the given we're So the credits molybdenum that for the year, from expect our now $X.XX before zinc

Carlos de Alba

Yes. in fire? quarter period was Do you of recovery? already the have second damage shipments How in sales the zinc the mean second to That made do progress done you the my the see refined production recover is I that expect to what and refinery? that you question. after

Raul Jacob

been quarter, couldn't the for of our quarter. selling We that this on much the first working But this damage. zinc. have forms, fire we -- most during of And -- the that shapes The first produce are the affected we that's first we refined part the the the required quarter facilities. what repaired have pretty through

in we at you are So we're long Carlos, And may operations. expecting production. it recall, capacity to zinc refining initiate our as

do be zinc the quarter for of and -- rest that refined will on this allow the second that for and will zinc rest concentrate year. we So the have catch some through processed the year, us sales to up

Carlos de Alba

X And I Excellent. right. may. more, then if All

clearly, allocation yet very that company Southern and specifically mean, the incorporate -- is current in has dividends. pays there on are generation number has company U.S. Just in are specific capital on we other that and developed could to of a other is a in Can cash question, the in policy maybe you assets any analysis excess ever the sorry, -- mining not allocation. demand that have copper quality I'm that earlier the second capital have an as expect Copper how companies But iron you the seeing capital my place -- companies do question, have copper one, allocation aluminum, formal impressive. Copper call? it recently. or the place cash the the infrastructure ore been much more or good, the But package in for I generation we allocation from come in policy -- policy Southern last mentioned the has? done And

Raul Jacob

developing far, allocation is track that policy, of copper for that company. copper your company cost company well, something projects But we producer, to I clear. of at probably capital we're the the do? of that being the on cost low-cost We cash Well, basically maintain we size among producer, you I are consider. given want that copper record mean, point. think may will Carlos. the we the believe Thank lowest a the so questions, our Okay. peers, quite What that characteristics lowest is this

basically see, is you Regarding cash. dividends, the as not company holding

moving different a -- of price have the production. been our dividend different are quarterly we increased has as cycle as and increasing we towards our Board Our part of price the

reference Just we our copper. for years as tons of ago, producing XX less XXX,XXX were about a than audience,

producing Now X tons. about we are million

have capacity. doubled our We

formal to is U.S. package a X.X have our don't we internal of doing -- don't low-cost that information the a not in tons decade. And to to last have in how that -- estimate up revolution this in have will yet. going we go -- has the question, the much be by copper infrastructure million that discussed that, well, to producer. And copper we next is We is keep infrastructure green for production goal being characteristic the of your or -- Our

is materializes. this -- favorable I've forecast positive years at will doing that producers be copper Our commercial and if studies team some extremely we a very few But this formal the don't have next in estimate are But about a seen this. that point, ourselves. for

Operator

from Our next question comes from Advisors. AM Rodrigo Salazar

Rodrigo Salazar Couttolenc

been My question answered. has

Operator

question comes Ivan from next Our from Fernandez Kinea.

Ivan Fernandez

the a protection potentially nationalization Peru. operations government or affect have or operations. how I to related mining mining that against even about expropriation question his less you're guy, risk I Castillo, particularly proposals, the operations of seeing of could excessive political in wonder risks and on taxation protests the or

that would the see to around hear defenses likely helpful really actually to If campaign on you risks forward push that. for try you in rhetoric useful these or just do that you proposition, kind wins, your would might it's he to or of case very be more on pushes you he's views if to would he kind for what believe it understand be of have whether company against of even the comment things. could kind It

Raul Jacob

for Ivan. Thank question, you your

think because proceed, seen mining have them, that the we that not the -- hold. industry, positions on in doing that -- this particularly we to don't at point, the regarding proposals I candidates, of campaigns necessarily are the both want comment they particular, the

elected We the and the that our the development partner of see the COVID-XX he that seen believe regarding for have has could that recession of the we're Peru. use looking the at president strong out or locomotives go that will that once she hard matters We past. very one country very to the starts created in in a Peruvian industry, to

be Once that specific measures we're definition, any, will point, any by comment this not making we at specific we So that. if president. will on the announced, comment on elected have

Operator

Our LarrainVial. next from question from Leopoldo comes Silva

Leopoldo Silva

is smelters question regarding my your So projects.

please with the could you in what stage On currently? us had Empalme these in have they developments Here, you projects Ilo, Mexico? are and on Peru, some share recent of

Raul Jacob

Yes.

one is smelting other we indicated X in Peru to is As the have and market, projects, the have we Mexico. one in

Mexican the on Let me comment first.

later initiate investments to on this in these expecting decade. are We

a being for studies require are specific priority now, expenditures certain For our future. we're project the we this priority developed, to don't this as, but have say, -- let's that considering in

project, also of There a future. at very Regarding interesting part Peru. smelter concentrate already the reviewed. such, the do market part and we for are we of new is Peruvian And as Chile the of have the the the considering economics a investment all an project southern northern for

interesting, Board approved environmental also, finished -- we has to a side, We to present for initiate review approval. of to it. Now been and And it very on the need the project. technology Board. not permits need investment say, to good this company. very And the the very our economic as it's the by for the the for use It on of formal the results -- we it's economic -- I have a actually all

investment and Ilo considering as will for investing this at a we smelting we there capture considering will Mexico it's XXXX consider total say, on, both value year, are market this of we cogeneration case and in long of project interesting concentrate Mexico, the And in some we're we're consider Peru, Mexico, in well good good Mexico to very That's We smelter. on we concentrates studies to part and doing year. power Peru. the technical be budget because what for will in but I investments related this There the and for for in -- projects. In for XXXX. the is year, the a but, of not smelter, the only at for the are in opportunities certain as northern also very as -- are for

Leopoldo Silva

much with weight meaning hand. producer? the down of on guide and do this the securing regarding it lowest is acid the that the breaking or other, cost of on of your the That's value us how and of the the weigh mean, supply hidden the the sulfuric having this Pacific? of And one this I strategic there the the how on being you investment does miners you -- smelting of see stand-alone eyes returns first -- Great. And smelters fit answer, in from value also having Pacific side business? the value the And could perhaps much how of smelters? capacity on a coming in like does side through

Raul Jacob

Well, copper part concentrates own and the the applies that to same, is the the of same production part point. Mexico. Peru southern China that the freight take Chile, the always well the of all from possibility this say, northern there our There Buenavista will have are to at concentrates operation saving lone certainly, to as smelters U.S. go that we from as could of these

one, those budget million. budget, $XXX budgets. of million. the by in been Board. keep that has approved our it's these -- the are That Peruvian have Mexico mind estimated On the And an not the X $X,XXX in for smelter Please

technical a review, have them, future. goal in we for current our studies don't specific the and for it's outlook they but So are under still

Operator

comes Our Andreas next UBS. from question Bokkenheuser from

Andreas Bokkenheuser

X volumes questions a Just last a for follow-up quick me, and question on year.

fell of last obviously, all national things year So that the COVID-XX whatnot. is copper out Peru shutdowns and noticed, on the one and mining a of level we production on of the back

that. You experience didn't really

that second production first trend it yourself what the something you mean, I could pressured the point past basis. year-on-year in somewhat you the is have assets the grow be changes. talking bit pressure about setting would you Is want just nationalizing would confirm, talk required? up the Peru? an questions. that spend bucked if actually we based That's conversations I you X that market? You and wanted able otherwise constitutional yourself follow-up like to in were don't volume you question. And would to on that about just how -- or get guys question, producers are understanding the month under production how the I if the on over start that guess production-wise? on risk. you to Those visibility my But see you been mining a candidates. little require from actually what do comment time And my any your apart Can Peruvian take saw it on a it a of on current hypothetically,

Raul Jacob

concentrator Sure. -- production Thank questions, May, in in on mind the that you second please of Well, in in very of how Andreas. initiated the much for keep your -- we XXXX the XXXX, Toquepala.

So of in a XXXX, full per copper XXX,XXX that production facility of tons of we year. running X XX months. had we capacity had that facility months year, through at a has of the And new whole speed in XXXX,

mentioned no we of COVID while refinery only smelter, point were that at the the I as operations given to a could in everything SX-EW of Peru, the the ago, Now that case the we at moving at forward. In isolated, we pandemic. authorized maintain beginning order of that concentrators, -- cut cases the have and of are we the we and the beginning pandemic, operations the our

Tacna. premises, or our in would the year, We I say, have workers staying where Moquegua and We or at but cases had were houses people the their living not of say live. families some that in COVID outbreaks any inside the their been Ilo we a -- months we've didn't -- have for have didn't quite of we most of where premises few

containing that of year of in -- So works the us didn't any production as stripping I production last production say, no second with having quarter premises, beginning at full that of to why a stripping Toquepala, require. increased little, Toquepala. we we XXXX had we -- specific maintain to first and necessary and cases our the copper for concentrate our that the the explains production, the -- copper initiated XXXX, we and in in very our while do level XXXX managed mineral. our We to in this inside concentrator extract to had production having allowed any May, we And of just year. of our hold. And concentrators concentrate produce year mineral the new And

candidate more in regarding expropriation change indicated a operations, is mining Now he recently change that an your that expressed considering a of taxation of than the for well, on question operations. has expropriation possible that

is one say, a materialized. will the we for he and the person that be are So the -- country. that a don't as I as be actually we have believes But that this see president to takes will going thing we or think this a material she measures appropriate new

Andreas Bokkenheuser

guys safe and Hope you all stay are safe.

Operator

from Ashmore. Our next Fernando from comes Assad question

Fernando Assad

of nature. challenging it Congrats growth Maria. last be the a Peruvian question power, mix you Or months, in investments growth and is well much terms any to in environment. production projects the Mexico? are terms from a the can of in is continues reallocate Tia political situation, to do Mexico hypothetical Is in as XX ahead as totally to very Peru been over on can Maria? in as the headwind Tia If of the projects perhaps My unrelated there Peruvian particular, projects has what the of priorities in and way you put whoever results in Mexican

Raul Jacob

being Okay. Well, Mexico. in that Thank question, under X developed are you projects your have we Fernando. for

These We have of -- million. a $XXX speaking, combined projects budget of were little a finished. pretty north bit it's okay, particularly generally a Pilares, budget much

bit to of initiate production comments for little advance to good is there we production. important -- it that think into possibility it's looking have one a That's are that some we the to I We And share. details expect a Pilares.

moving it's forward. Pilar, El Now

part a on studies are the technical of We project.

zinc on on that Buenavista. a problems at pandemic bit by all. with the is we affected one The move we're So concentrator that, little no at can the

operation. -- the where the that concentrator, to construction the different company that, a expecting we in final acquire assets We operation of a into which that looking shots development. The take on fit excellent be a a meaning distributing we on this reported the Sonora by very by as constantly zinc believe an looking promising zinc a Mexican Cananea. be which speed the We will concentrator is into see it's as has some in vaccines of government, activity metal area of finished the next will vaccination company few government years expect are the and we positive project is, years. for basically to back conducted the is that are we being point of at forecast over opportunities starting coming And on certainly XX characteristic low-cost -- people the for copper, very

give So other there, good first some attractive conditions to in us recommendation will will the kind a if a we countries activities will we're the at be is there management other take to Obviously, day, moving be of Board, in, in these in have this acquisitions on and project to where see they decision that focusing are -- for the of our developing that certainly thing that. of study get to we end some opportunities. or better into asset and will which will will, detail, our places the

Operator

from from Alfonso our Scotiabank. next And question comes Salazar

Alfonso Salazar

growth... regarding a COVID First question the of all company. the have support initiatives on congratulations all, of I

Raul Jacob

you. copy -- little please? can't a Could you I approach you bit microphone, could Alfonso, your to

Alfonso Salazar

hear you better Can me now?

Raul Jacob

Much better. Thank you.

Alfonso Salazar

leave reform, mining beyond first So when expansion it elections. after one of or rift, really? I not were the about Caridad have you Mexico. many talking the let's agreements But example, is at increases that bit aside me that we Mexico them see let reform. in the feasible say, is seen growth something reforms announced. years the and my in natural say of aside, What little is And notes capacity a Peru you in projects I strategic that that. that the resources, you hydrocarbons we of for And right Toquepala that That's the regarding Is reform nature, if what is question. And you at question the ago. Southern a Buenavista. have increasing that that like is the in give in are because the Cuajone and second regarding put Cuajone here. was lot many have possible But energy mentioned, you Copper -- disconnected

So mining you think that why be do industry excused? would the

Raul Jacob

of part question, Alfonso. final the -- your your get second couldn't I

Alfonso Salazar

reform why be materialized got not think understand to to that talking when is disconnected trying do Mexico. were about in you just that. likely mining Yes, you I

Raul Jacob

this on in at me in capacity mind first of the Well, optimal much will I are the question nowadays. Keep increased Toquepala capacity that let your the doubled say operation for XXXX. answer first we that level capacity we pretty Toquepala, in concentrating

the of of -- -- investment, project that we Peru Peru. on with a comfortable the basis the to which possible we Cuajone, put so have water at a and a the also same level case it assigned on in ways the our a in is we're looking That median We're lower this expansion. the operation is Cuajone happy been fresh to Cuajone currently that. In feel has recovery, step with for to -- into it's Toquepala So to order review expansion. will the daily operation and looking now increase be expansion resources important Cuajone been that of mining an of have rate mine, go into

So little a with capacity Peru in our may that, production more. we increase bit

of as seen political we we Mexico actions think in -- I any other evolve Mexico, administration, the to reform seen new we at the point what than... mining since beginning for haven't see well, need this the how through in that and well. have Regarding circumstances But specific

Oscar González Rocha

Raul.

Raul Jacob

Yes?

Oscar González Rocha

that reduction This last mining the adjustments there concession Yes. fees was be there the And -- tax, special some special tax. where was paid. also the tax was Oscar. to was on did to Can I a okay. reform mention concessions to some the changes the government some year and that could how special that some that credited is mining There

well some the some year industry issues addressing tax. managing the felt that wasn't So was government mining with reform there mining special last the

and and affects So tax. it mining there increase year it's having -- was this some, special

Operator

question next Bruny from from Our comes BBVA. Jean

Jean Baptiste Bruny

the demand the will to medium very that sustainable it And projects, considering quick now term, in that future a something some on you every it Maybe specific the Probably you bonds develop to on can happen metrics dedicated can full are Is the green you quarter? we using one I just interesting ESG. you expect in to finance using communique? be ESG. the maybe or found depending on to put a matter, page in bonds projects?

Raul Jacob

couldn't I your question. get

Sorry, you it jean, please? could repeat

Jean Baptiste Bruny

Yes.

ESG the using communique. on full that in Just on a ESG page you're

something the green it's sustainable bond bond what can metrics part And the in quarter? you communique? the in every are we know that you issuance So analyzing now future? using I in And would or kind of or like sustainable -- future be the will of to if see bond of the

Raul Jacob

questions. Yes. Okay. you Thank for your

to have is seen, on One at different getting will we're matter keep the X in have a ESG have improve order you the did years, be to what express corporate we move things of communication on need we progress effort as -- now We we that gap and the And we that well, ESG part we release, a this few the our metrics as As we with. we side that the section do for and in move are is, we And analysis our that are effort last doing a been moving one believe to to future. on lately it that there press believe show we and actually. forward on should of on. this that on.

You the will in these them next metrics few report see as quarters. we

communicating metrics. well, we green bonds part that to that's we doing an market of what the is and future, whatever are feel ESG regarding, option, of to go the improve interesting on Now an an doing and catching in is we if are obviously what consider opportunity up we're and source for funds them there capital will we as

Operator

further I'd remarks. showing conference back the closing to for like am to I now management at turn no over And you. time. any this Thank questions

Raul Jacob

you your you our conclude you certainly We much Jenny. appreciate and hope back this, hope year. Well, very you Thank stay Quarter us well, Results. all Copper's we First for to with Thank with Thank and we XXXX quarter have again. second call much, very when participation, this you. very conference -- of and of you report Southern the much

Operator

now a conference participation, call. today's gentlemen, you you may Everyone, and concludes disconnect. day. and Thank for your have wonderful Ladies this

Southern Copper (SCCO) 28 Apr 212021 Q1 Earnings call transcript