SCCO
SOUTHERN COPPER CORP/NYSEValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Sep 4, 2026 · Valuation Sep 6, 2026
What drives SCCO's base case?
base-case thesisRecent results benefited from exceptionally strong metal prices, while physical copper output slipped. The central case does not extend that price surge indefinitely, but it gives credit for Tía María and El Pilar entering production on management's schedules. Profitability settles near the strong level achieved across 2025, with substantial spending required to deliver the added output.
What shapes the assumptions
Tía María adds planned annual capacity of 120000 tonnes from 2027
New copper capacity
Raises revenue growth
Recent sales growth was price-led while copper volume declined
Copper price and sales volume
Informs operating margin
Capital investment rose from $1027.3 million to $1325.3 million in 2025
Annual capital investment
Raises reinvestment
The effective tax rate stabilized near 0.365 in 2024-2025
Effective tax rate
Informs tax rate
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 35.8% a year. Over the last 5 years it grew 9.8% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- How confident is this estimate?
- Robustness 56.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Second-quarter average LME copper price
The benchmark copper price is the largest direct revenue and profit driver because copper generated approximately 0.759 of SCC's recent three-year sales.
$6
reported2. Second-quarter mined copper
Mined copper tonnes show whether physical output, rather than commodity inflation, is supporting revenue growth and fixed-cost absorption.
230,662 tonnes
reported3. Second-quarter net copper cash cost per pound
Cash cost after by-product credits measures the cash economics of producing copper and captures the contribution from silver, molybdenum, and zinc.
$0.05
reported4. Second-quarter capital investment
Quarterly capital investment indicates how much current cash must be retained to maintain mines and deliver the production pipeline.
$423M
reported5. Second-quarter operating margin
This measures how much quarterly sales remain after operating costs and therefore tests whether pricing and cost performance are translating into operating profit.
61.2%
derivedBase inputs from financials
source period →Base revenue (TTM)
$15.8B
Diluted shares
829,100,000
Net cash
-$2.3B
Bear
low confidence$26.47
IV / share
-86.7% vs $199.53
- Explicit cash flows
- $9.77
- Terminal value
- $19.51
- Net cash
- -$2.81
- Intrinsic value / share
- $26.47
73.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth-12.0% → -5.0% → 2.0% → 3.0% → 2.5%medium
How derived: The forecast starts from the price-led 0.406 quarterly sales increase but assumes copper and by-product prices normalize while lower ore grades and delayed project benefits constrain physical growth.
Why this confidence: Current production and sales-volume disclosures ↑, Unpredictable future metal prices ↓, Project timing and permitting risk ↓
Measured by
- Second-quarter average LME copper price$6reported
- Second-quarter mined copper230,662 tonnesreported
- Second-quarter capital investment$423Mreported
Evidence for
- SCC reported that first-half 2026 copper sales volume fell 0.032 and mined production fell 0.038, while lower ore grades reduced output at its Peruvian operations.[SCC 2Q26 results]· primary
Evidence against
- Tía María was scheduled to begin production in the second half of 2027 with initial annual capacity of 120000 tonnes of copper.[SCC 2Q26 results]· primary
Operating margin43.0%medium
How derived: The assumption discounts the recent TTM margin near 0.57 because the latest profitability surge was driven predominantly by exceptional metal prices rather than higher copper volume.
Why this confidence: Reported quarterly income statement ↑, High sensitivity to commodity prices and by-product credits ↓
Measured by
- Second-quarter average LME copper price$6reported
- Second-quarter mined copper230,662 tonnesreported
- Second-quarter net copper cash cost per pound$0.05reported
- Second-quarter operating margin61.2%derived
Evidence for
- First-half 2026 operating cash cost before by-product credits increased 0.103 because of lower production and higher fuel, labor, and materials costs.[SCC 2Q26 Form 10-Q]· primary
Evidence against
- Second-quarter 2026 operating income was $2623.2 million on $4289.0 million of sales, a reported margin of approximately 0.612.[SCC 2Q26 results]· primary
Tax rate38.0%medium
How derived: The assumption begins with the 0.364 effective rate reported for 2025 and adds a cushion for higher Mexican mining royalties and adverse changes in uncertain tax positions.
Why this confidence: Three years of reported effective rates ↑, Uncertain tax positions and jurisdictional changes ↓
No tracked driver measures this assumption yet.
Evidence for
- SCC reported effective tax rates of 0.384, 0.369, and 0.364 for 2023, 2024, and 2025 respectively, including mining royalties and Peru's special mining tax.[SCC 2025 annual tax disclosure]· primary
- Mexico increased its mining royalty from 0.075 to 0.085 and its additional royalty from 0.005 to 0.01 effective in 2025.[SCC 3Q25 Form 10-Q]· primary
Evidence against
- The reported effective rate declined in both 2024 and 2025, reaching 0.364 in 2025.[SCC 2025 annual tax disclosure]· primary
Reinvestment rate42.0%medium
How derived: The rate is set above the recent normalized level because weaker commodity earnings would make committed mine and project spending consume a larger share of after-tax operating profit.
Why this confidence: Reported capital spending and committed projects ↑, Reinvestment measured against cyclical future profit ↓
Measured by
- Second-quarter capital investment$423Mreported
Evidence for
- Capital investment increased 0.562 to $864.7 million in the first half of 2026, and SCC had approximately $1634.7 million of project commitments at June 30.[SCC 2Q26 Form 10-Q]· primary
Evidence against
- First-half 2026 operating cash flow of $3683.0 million substantially exceeded capital investment of $864.7 million.[SCC 2Q26 results]· primary
Terminal growth1.0%low
How derived: The mature growth rate is held below expected nominal economic growth because roughly 0.759 of recent revenue came from copper and finite mines face grade decline, permitting risk, and commodity cycles.
Why this confidence: Finite reserves and observable grade decline ↑, Very long forecast horizon ↓, Uncertain future discoveries and projects ↓
No tracked driver measures this assumption yet.
Evidence for
- Lower ore grades caused year-to-date 2026 mined copper production to decline 0.038, illustrating the depletion pressure faced by existing mines.[SCC 2Q26 Form 10-Q]· primary
Evidence against
- Management's long-term objective is to increase copper production to 1.6 million tonnes by 2033 through a project program exceeding $20.5 billion.[SCC 4Q25 results]· primary
Base
low confidence$58.69
IV / share
-70.6% vs $199.53
- Explicit cash flows
- $17.89
- Terminal value
- $43.61
- Net cash
- -$2.81
- Intrinsic value / share
- $58.69
74.3% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth2.0% → 5.0% → 7.0% → 5.0% → 4.0%medium
How derived: The forecast moderates the price-driven recent growth sharply, then adds volume progressively for Tía María's planned 2027 start and El Pilar's planned 2029 start.
Why this confidence: Company project capacities and schedules ↑, Copper-price volatility ↓, Construction and ramp-up uncertainty ↓
Measured by
- Second-quarter average LME copper price$6reported
- Second-quarter mined copper230,662 tonnesreported
- Second-quarter capital investment$423Mreported
Price implies: 35.8% vs our 4.6% — one of several sets that fit this price
Evidence for
- Tía María was expected to begin producing in the second half of 2027 with initial annual capacity of 120000 tonnes, while El Pilar was expected to start in the second half of 2029 with annual capacity of 36000 tonnes.[SCC 2Q26 results]· primary
Evidence against
- The 0.384 first-half sales increase was mainly price-driven, while copper sales volume declined 0.032 and molybdenum sales volume declined 0.08.[SCC 2Q26 results]· primary
Operating margin52.0%medium
How derived: The target approximates 2025's reported operating profitability and sits below the latest TTM level to normalize the exceptional 2026 metal-price and by-product benefits.
Why this confidence: Full-year and latest-quarter reported profitability ↑, Large price contribution to current profitability ↓
Measured by
- Second-quarter average LME copper price$6reported
- Second-quarter mined copper230,662 tonnesreported
- Second-quarter net copper cash cost per pound$0.05reported
- Second-quarter operating margin61.2%derived
Evidence for
- SCC reported 2025 operating income of $7001.7 million on sales of $13420.0 million, implying an operating margin of approximately 0.522.[SCC 4Q25 results]· primary
Evidence against
- Second-quarter 2026 operating income of $2623.2 million on $4289.0 million of sales implied a much higher margin near 0.612.[SCC 2Q26 results]· primary
- First-half operating cash cost before by-product credits increased 0.103 because of lower output and higher input costs.[SCC 2Q26 Form 10-Q]· primary
Tax rate36.5%high
How derived: The forecast holds the tax rate near the 0.364 reported in 2025 because SCC's Peruvian, Mexican, and U.S. taxes plus mining levies are structurally recurring.
Why this confidence: Stable recent effective-rate history ↑, Multiple tax jurisdictions and mining levies ↓
No tracked driver measures this assumption yet.
Evidence for
- SCC's effective tax rate was 0.364 in 2025 and 0.369 in 2024, with income taxes and mining levies included consistently.[SCC 2025 annual tax disclosure]· primary
Evidence against
- The effective rate was higher at 0.384 in 2023, and Mexico subsequently raised two mining royalty rates.[SCC 2025 annual tax disclosure]· primary
Reinvestment rate34.0%medium
How derived: The assumption reflects annual capital investment near 0.30 of 2025 after-tax operating profit, increased modestly for accelerating construction at Tía María and other projects.
Why this confidence: Reported spending history and project commitments ↑, Timing variability for large projects ↓
Measured by
- Second-quarter capital investment$423Mreported
Evidence for
- Capital investment increased from $1027.3 million in 2024 to $1325.3 million in 2025 and rose another 0.562 year over year in the first half of 2026.[SCC 4Q25 and 2Q26 results]· primary
Evidence against
- SCC generated $4752.1 million of operating cash flow in 2025, materially more than its $1325.3 million capital investment.[SCC 4Q25 results]· primary
Terminal growth2.0%low
How derived: The mature rate assumes modest nominal growth as SCC replaces declining grades through its large reserve base and project pipeline without extrapolating today's exceptional metal prices.
Why this confidence: Large disclosed reserve and project base ↑, Long forecast horizon ↓, Commodity cycles and finite mine lives ↓
No tracked driver measures this assumption yet.
Evidence for
- SCC describes itself as possessing what it believes is the industry's largest copper reserve base and has a long-term goal of producing 1.6 million tonnes by 2033.[SCC 2Q26 results]· primary
Evidence against
- Existing-mine copper production declined because of lower grades, and new projects remain exposed to lawsuits, permits, infrastructure dependencies, and construction risk.[SCC 2Q26 Form 10-Q]· primary
Bull
low confidence$97.79
IV / share
-51.0% vs $199.53
- Explicit cash flows
- $25.24
- Terminal value
- $75.37
- Net cash
- -$2.81
- Intrinsic value / share
- $97.79
77.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth8.0% → 10.0% → 10.0% → 8.0% → 6.0%low
How derived: The path assumes strong copper and by-product pricing persists while Tía María ramps on schedule, El Pilar begins in 2029, and existing operations recover from temporary grade weakness.
Why this confidence: Specific disclosed project capacities ↑, Dependence on sustained record metal prices ↓, Execution required across multiple projects ↓
Measured by
- Second-quarter average LME copper price$6reported
- Second-quarter mined copper230,662 tonnesreported
- Second-quarter capital investment$423Mreported
Evidence for
- First-half 2026 sales increased 0.384 as average LME copper prices rose 0.388, and SCC has disclosed near-term projects totaling 156000 tonnes of annual copper capacity.[SCC 2Q26 results]· primary
Evidence against
- First-half 2026 mined copper production declined 0.038, molybdenum sales declined 0.08, and several projects still face legal, permitting, or infrastructure dependencies.[SCC 2Q26 Form 10-Q]· primary
Operating margin58.0%low
How derived: The target remains below the latest quarterly margin near 0.612 but assumes high metal prices, strong by-product credits, and low-cost new SX-EW production preserve most of the recent improvement.
Why this confidence: Latest reported profitability and project cost estimate ↑, Volatile by-product credits ↓, Input-cost inflation and lower grades ↓
Measured by
- Second-quarter average LME copper price$6reported
- Second-quarter mined copper230,662 tonnesreported
- Second-quarter net copper cash cost per pound$0.05reported
- Second-quarter operating margin61.2%derived
Evidence for
- Second-quarter operating income increased 0.653 to $2623.2 million, while net cash cost after by-product credits fell from $0.63 to $0.05 per pound.[SCC 2Q26 results]· primary
- Tía María's expected cash cost was disclosed at $1.16 per pound, supporting favorable economics for its planned output.[SCC 2Q26 results]· primary
Evidence against
- Before by-product credits, first-half cash cost per pound increased 0.103 because of lower production and higher fuel, labor, and operating-material costs.[SCC 2Q26 Form 10-Q]· primary
Tax rate35.0%low
How derived: The forecast starts from the 0.364 rate reported for 2025 and assumes favorable profit geography and resolution of uncertain positions modestly reduce the effective burden.
Why this confidence: Recent downward effective-rate trend ↑, Assumed favorable tax-position outcomes ↓, Higher statutory mining levies ↓
No tracked driver measures this assumption yet.
Evidence for
- SCC's effective tax rate declined from 0.384 in 2023 to 0.369 in 2024 and 0.364 in 2025, partly due to changes in uncertain tax positions.[SCC 2025 annual tax disclosure]· primary
Evidence against
- Mexico raised its mining and additional royalty rates in 2025, and SCC continues to incur Peruvian royalties and a special mining tax.[SCC 3Q25 Form 10-Q]· primary
Reinvestment rate28.0%medium
How derived: Although project spending remains high, the rate falls below the base case because strong prices and margins expand after-tax operating profit faster than the planned capital program.
Why this confidence: Reported cash generation relative to spending ↑, Large multi-year project pipeline ↓
Measured by
- Second-quarter capital investment$423Mreported
Evidence for
- In the first half of 2026 SCC generated $3683.0 million of operating cash flow while investing $864.7 million, leaving substantial internally generated funding.[SCC 2Q26 results]· primary
Evidence against
- SCC's current-decade investment program exceeds $20.5 billion, and first-half 2026 capital investment increased 0.562 year over year.[SCC 4Q25 and 2Q26 results]· primary
Terminal growth3.0%low
How derived: The mature rate assumes SCC's reserve base and projects sustain modest real output growth while inflation supports nominal metal revenue, but it remains below the long-term Treasury yield.
Why this confidence: Long-life project pipeline ↑, Multi-decade forecasting uncertainty ↓, Legal, infrastructure, and permitting dependencies ↓
No tracked driver measures this assumption yet.
Evidence for
- The disclosed pipeline includes Tía María, El Pilar, and Michiquillay, with Michiquillay expected to produce approximately 225000 tonnes annually over an initial mine life exceeding 25 years.[SCC 2Q26 results]· primary
Evidence against
- Tía María remained subject to eight disclosed lawsuits, while El Arco depended on government action to connect Baja California's electricity system.[SCC 2Q26 Form 10-Q]· primary
Valuation robustness
reliability of the estimate, not a stock rating56 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 74% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 17.0% | 1.49 | 46.7% | 798.6M | 3.3% |
| Q1 2025 | 20.1% | 0.49 | -14.8% | 821.6M | 6.3% |
| Q2 2025 | -2.2% | 0.89 | 11.4% | 829.1M | 5.5% |
| Q3 2025 | 15.2% | 1.47 | -1.5% | 822.7M | 3.0% |
| Q1 2026 | 36.2% | 1.52 | 210.3% | 821.7M | 0.0% |
| Q2 2026 | 40.6% | 1.89 | 111.3% | 829.1M | 0.0% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The value is the 10-year Treasury par yield reported for September 4, 2026, matching the currency and long duration of the dollar DCF.
The January 2026 global metals-and-mining levered beta is used because SCC's revenue and earnings are dominated by internationally priced mined commodities.
The value is NYU Stern's July 1, 2026 forward-looking implied U.S. equity risk premium based on trailing distributions with adjusted payout.
The value is SCCO's unadjusted closing price on September 4, 2026, the latest completed trading session before the valuation date.
Generated 9/6/2026, 4:43:38 AM · pipeline v1.2.0