Southern Copper Corporation is a major integrated producer of copper, operating mining, smelting, and refining facilities primarily in Mexico and Peru.
Mr. Gonzalez Rocha, could you first give us a brief overview of Southern Copper’s structure and operations?
Southern Copper, a subsidiary of Grupo Mexico, is on the New York Stock Exchange and includes Southern Peru Copper Corporation and Minera Mexico. Our operations span across four open pit mines: two in Peru (Toquepala and Cuajone) and two in Mexico. We also operate a smelter and refinery, primarily processing silver ore. This diversified portfolio underscores our significant presence in the mining industry.
You are to resume Tia Maria mine development in Peru. Can you tell us a bit about the problems that Tia Maria had and how you got to overcome these?
We have indeed faced challenges with the Tia Maria project. It took over 10 years to get approval, despite the project's potential benefits. We offered to build a reservoir with a capacity of 60 million cubic meters to improve local agriculture, which was crucial for gaining support, - we are actually asked to do so in writing. We also plan to hire around 9,000 people from the Arequipa area for construction, and another 6,000 for operation, contributing to the local economy over the next 25 years.
This not only boosts the local economy but also ensures the project's long-term sustainability, creating opportunities for the community and fostering regional development.
What is your opinion about the potential of the copper industry to continue growing?
The copper industry is showing remarkable potential. Historically, copper prices ranged between $2.50 and $3.00, but now they have exceeded $4.00, which is very encouraging. We primarily sell copper to Asia, especially China and Japan, where demand is robust.
We are optimistic about future growth. We are preparing to meet the market demand by gearing up for copper production from Tia Maria, where we expect to commence production in two years. This will not only increase our output but also create more jobs, benefiting both our equipment suppliers and the Peruvian economy through taxes and other contributions.
How committed is Southern Copper to environmental sustainability?
Southern Copper is deeply committed to environmental sustainability. As a major player listed on the NYSE, we prioritize responsible mining practices. Our operations in Mexico place us among the top global copper producers, and we are focused on enhancing production while maintaining environmental stewardship.
We plan to transport copper by rail from the mine to the port of Monterrey, facilitating efficient exports to Asia. Our operations in Ilo, including a smelter and refinery, will also support this endeavor. By producing copper cathodes at Tia Maria, we comply with legislative requirements and cater to the high demand in China and Japan.
How much of the copper you now sell is going to Asia?
All the copper produced at Tia Maria is destined for Asia and Europe, with a significant portion going to China and Japan. This strategic focus on these markets underscores the high demand and our capacity to meet it effectively.
What is your relationship with the governments of Peru and Mexico?
Our relationship with the governments of Peru and Mexico is positive. In Peru, we have been operational since 1999, managing mines, as well as a smelter and refinery in Ilo. These operations allow us to produce and sell copper domestically and internationally.
We are satisfied with the support we receive, which helps us maintain our production and export targets. Our collaboration with the government ensures that our projects are aligned with national economic goals and environmental regulations.
What is the biggest challenge that you are facing at the moment?
One of our biggest challenges is scaling up production to meet our ambitious targets. We aim to increase our copper output to 2 million tons, doubling our current production. Achieving this will place us among the top copper producers globally within the next five years.
This growth will require substantial investment and operational efficiency. We are confident in our ability to overcome these challenges and continue contributing significantly to the global copper market and the economies of Peru and Mexico.
Are you looking to expand production even further?
We are looking to continue explorations in Peru, Mexico, and Arizona, where we have three producing mines: Mission, Silverbell, and Ray. Although our smelter and refinery in Arizona are currently idle, we aim to resume operations within a year to enhance our production capabilities. This will allow us to produce more copper cathodes, which yield better income compared to selling raw concentrates.
You have been in your position for many years. What is your personal motivation? What would you like to see the company become?
I have been working for Grupo Mexico and Southern Copper for 54 years. My personal motivation comes from supporting a company with such a rich history and playing a significant role in its growth. As a mining engineer with experience, and I started in the mining business in 1976, I deeply understand the technical and operational aspects of our business.
My primary goal is to continue leading the company towards further growth and success. Over the next couple of years, I aim to see our ongoing projects reach completion and our production capacity continue to increase.
Concretely, I would like to see the successful completion and operationalization of our key projects, particularly the Tia Maria project and the expansion at Cuajone. Achieving these milestones will significantly boost our production capacity and solidify our position in the global market.
Additionally, I am focused on ensuring that our operations continue to provide substantial benefits to the local communities and economies in Peru and Mexico. Seeing the positive impact of our projects on these regions, both in terms of job creation and economic development, would bring me great satisfaction.
