Southern Copper Sees Stable 2026 Copper, Flat 2027 Output Amid Peru Policy Shift

View on Peru’s political/regulatory outlook for Tia Maria and Los Chancas, and production outlook for copper & by-products in H2 2026 and 2027

1) Peru’s political environment: what could change and why it matters to mining

Southern Copper’s management characterized the post-election period as one where the regulatory backdrop must be “review[ed]” in light of what the incoming administration proposes, while also noting a broadly positive direction for mining policy. Specifically, management said the elected President (Keiko Fujimori) is considering initiatives they believe will be positive for Peru’s mining industry, and highlighted priorities that are especially relevant to their Peruvian assets. ¹

Key positive policy signals management cites

• Stronger fight against illegal mining: Management tied this explicitly to Los Chancas, stating the incoming administration’s priorities include “the fight to illegal mining,” which is described as something affecting Los Chancas. ¹
• A new law for artisan mining: Management referenced a proposed “new law for artisan mining,” which they expect could bring positive developments for Peru and specifically “favorable for Los Chancas.” ¹
• Macro/fiscal stability expectation: Management said they expect the government to “maintain the fiscal accounts order.” ²
• Greater political/institutional stability: Management pointed to changes such as the presence of a Senate in Peru “that we haven’t had for over 30 years” and said these changes should make the political environment “much more stable.” ²

Remaining uncertainty (timing and specifics)

• Management emphasized that more clarity will come once the administration outlines goals (notably in President Fujimori’s speech on July 28, when she takes office). ²

Analyst’s takeaway: The regulatory theme management is most directly linking to near-term operational risk reduction is enforcement against illegal mining and a new artisan mining framework—both potentially relevant to Los Chancas. ¹ At the same time, Southern Copper is not claiming the regulatory picture is settled; they’re explicitly framing it as “we have to see” what is proposed when the new administration takes office. ²

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2) Project-specific implications: Tia Maria (construction execution) vs. Los Chancas (illegal mining pressure)

Tia Maria: risks appear “usual,” with social environment described as positive

Management described the risk profile for Tia Maria as the “usual ones” for a project under construction, while stating they reviewed detailed factors that could affect execution and “for now, we don't see anything like that showing up.” ¹

They also described the social environment as positive:

• They said they are working with local populations through initiatives.
• They reported a “significant amount of people” from the area, including people who had previously been protesters or were family of protesters, and they said these stakeholders are “okay,” concluding they are “fine in that regard.” ¹

Execution timing for CapEx concentration (2027): The question in the transcript frames 2027 as a key year for CapEx disbursement, but management’s direct response in the excerpt is more general (risks are usual; no abnormal issues currently observed). ³¹

Tia Maria: desalination plant and order timing—management’s current stance

A key implementation risk mentioned by questioners is the desalination plant, and management responded that they are placing purchase orders and contacting major equipment suppliers “among them, the desal plant,” and that they do not expect a delay. ⁴

Analyst’s takeaway: The desalination plant is being treated operationally (purchase orders/contacts underway) rather than as an unanswered gating item, and management’s stated base case is “no delay” at present. ⁴ However, management also conditioned disclosure: they will report a delay if the market/perception indicates one—underscoring that actual timing remains something they are actively monitoring. ⁴

Los Chancas: dependency on improved enforcement against illegal mining

Management tied Los Chancas risk directly to illegal mining pressure and connected expected improvements to the incoming administration’s priorities:

• enforcement/fight against illegal mining is described as a priority affecting Los Chancas, ¹
• and a new artisan mining law is expected to produce positive developments for Los Chancas. ¹

Analyst’s takeaway: Compared with Tia Maria’s construction/execution risk framing, Los Chancas appears more sensitive to policy-driven security/enforcement changes (illegal mining and artisan frameworks). ¹

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3) Outlook for copper and by-products production: H2 2026 and 2027

Baseline production guidance frame (2026)

Management discussed 2026 copper production as improving slightly versus earlier expectations:

• Early 2026 expectation: ~910,000 tons. ⁵
• Updated 2026 expectation: 917,000 tons. ⁵

They also explained that the prior-year shortfall drivers were ore grades, particularly Cuajone (reduction translating into about 35,000 tons lower copper production), with additional differences tied to Toquepala and “maintenance” of Mexico output while Peru volume is lower by about 40,000 tons in total at the Peruvian site. ⁵

H2 2026: what management explicitly states

In the excerpt, management does not provide a numerical copper-by-month/H2 2026 breakdown. Instead, it reiterates the “goals” for several materials for the year and answers the question by pivoting to the next-year (2027) copper production expectation (and longer-term step-ups). ⁶

What is explicitly stated for H2 2026 in the excerpt is limited; therefore, the most defensible conclusion from the provided text is qualitative: there is no cited deterioration in outlook, and production is within plan with ore-grade-driven explanations already incorporated into full-year 2026 expectations. ⁵⁶

2027 copper outlook: “more or less the same” as 2026

For 2027, management is very direct:

• For next year (2027), they expect to produce “more or less the same” copper as 2026. ⁶

Supportive context (why not higher in 2027):

• They expect some help from Tia Maria’s tonnage “hopefully in the later part of 2027.” ⁶
• Management also says that from 2028 onward, Tia Maria should materially lift production.

Longer-term production step-up (context for 2027)

Even though your question focuses on H2 2026 and 2027, management’s by-project tonnage expectations explain what “same as 2026” means:

• In 2028, they expect Tia Maria to increase copper production level to about 970,000 tons (and they describe this as “some help” that also ties to Tia Maria tonnage). ⁶
• In 2029, copper production is expected to be over 1,060,000 tons. ⁶
• They attribute portions of future copper to Tia Maria plus recoveries in ore grades at Toquepala and Cuajone, and additional benefits from El Pilar and better ore grades at the Mexican operation. ⁶

By-products / other materials: scope of what management covers

Management’s response frames “by-products” in terms of multiple materials, not just copper:

• They reference “4 materials” including copper, moly, silver and sulfuric acid and also zinc and sulfuric acid in the goal framework. ⁶

However, the excerpt provides the quantitative production expectation only for copper in later years (2028/2029) and does not provide specific 2026 H2 or 2027 tonnages for molybdenum, silver, sulfuric acid, or zinc. ⁶

Analyst’s takeaway: Based strictly on the provided excerpts, the strongest numerical/decision-grade statements are:

• 2027 copper: “more or less the same” as 2026, with potential incremental contribution from Tia Maria in the later part of 2027. ⁶
• H2 2026: no standalone H2 numeric guidance is given in the excerpt; the discussion instead relies on full-year plan context and ore-grade drivers already incorporated. ⁵

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4) Overall conclusion: connecting politics to production timing and risk

• Los Chancas risk appears linked to illegal mining, and management expects the new administration’s priorities (including illegal mining enforcement and an artisan mining law) to create a more favorable environment. ¹
• Tia Maria is currently framed as having usual construction risks, but management reports a positive social environment and says they are progressing on major equipment purchasing, including the desalination plant, without expecting a delay. ¹⁴
• Copper production: In 2027, management expects copper output to be roughly flat vs 2026, with any meaningful upside from Tia Maria more likely to materialize toward the later part of 2027 rather than immediately. ⁶
• By-products: management indicates they track/forecast multiple by-product-related materials (moly, silver, sulfuric acid, zinc), but the excerpt does not supply specific H2 2026 or 2027 tonnage numbers for those by-products. ⁶