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ANNUAL REPORT ’06
01
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02
SOUTHERN COPPER CORPORATION
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INDEX
Letter to the Shareholders
Production Statistics
Copper Reserves
Selected Financial and Statistical Data
Expansion and Modernization Program
Exploration
Development - Community Outreach
Results of Operations
for the years ended December 31,
2005, 2004 and 2003.
Commitment - Environmental Affairs
General Information
Description of Operations and
Development Regarding the issuing entity
02
04
05
07
11
15
21
25
31
48
Members of the Board of Directors
Letter to the Shareholders
2006 has been another extraordinary year for Southern Copper Corporation (SCC), in particular,
and for the mining industry in general. Our sales reached $5.460 million and net earnings were
$2,038 million, an increase of 33.5% and 45.6%, respectively, as compared with 2005.
These record results are mainly due to the higher metal prices, as well as to our ongoing com-
mitment to improving efficiencies and integrating our mining processes through refined metals
and special alloys.
Other indications of our strengthened position in 2006 are the increase of $341 million (10.2%)
in stockholders’ equity, an increase of $212 million in the fixed assets and an increase of $427
million in cash and marketable securities.
In 2006, average market prices for copper and our principal byproducts, except for molybdenum,
increased significantly from 2005 prices. The average COMEX copper price was $3.09 per pound,
compared to $1.68 per pound in 2005, an increase of 83.9%. The zinc average price was $1.49
per pound, 136.5% higher than the $0.63 per pound, in the previous year. The average silver price
was $11.54 per ounce, 57.7% higher than the $7.32 per ounce in the previous year. The gold aver-
age price was $604.34 per ounce, a 35.8% increase compared with $444.88 per ounce in 2005.
The molybdenum average price was $24.38 per pound, 21.5% less than the $31.05 per pound in
2005.
Regarding the modernization of the copper smelter in Ilo, the project was completed on time and
the operation of the Isa furnace started in February 2007. The anode casting wheel part of this
project started operating in the first quarter of 2006, replacing blister production with anodes.
The production of anodes allowed us to feed the refinery directly, eliminating the cost of re-melt-
ing blister into anode form. We estimate that this has saved the Company two cents per pound in
smelting and refining cost at the Ilo operations. At Toquepala, the leach dumps project reached
99.1% progress by December 31, 2006; the installation of all the conveyor belts, with a total
length of 4.6 kilometers, is almost completed. By the end of 2006, 34.5 million tons of material
had been deposited of a total of 39.5 million tons needed to finish the ramp, which is expected to
be completed in the first quarter of 2007.
In parallel, a new PLS dumps project is being constructed; this project is complementary to the
leaching dump project, as the new dumps will require new collection dams. Through December
2006, the project was 84.5% complete.
During 2006, we had a tragic accident in our Pasta de Conchos coal mine in Mexico. The Company
responded to this accident with a search and recovery effort for the dead miners remains. Also,
a major economic, educational, health and humanitarian program was developed for the miners’
families and the communities in the area.
Regarding the exploration activities in Peru, the Los Chancas project (a copper and molybdenum
porphyry deposit), initiated pre-feasibility studies in mid 2006, and are expected to be com-
pleted by the second quarter of 2007, when the commercially mineable reserves amounts will be
released as well as projections to finish the feasibility studies. In 2006, the Tia Maria project, a
porphyritic copper-gold deposit, concluded its drilling program and the feasibility studies have
begun which are expected to be finished in the third quarter of 2007.
04
SOUTHERN COPPER CORPORATION
In Mexico, the project for a new SX/EW plant at Cananea mine is underway; and we expect to
produce 33,000 tons of copper in 2009. At the same time, engineering is being developed to
expand the Cananea concentrator capacity to increase its copper in concentrates production to
32,000 tons. Also, the construction of a molybdenum plant with an annual capacity of 10 million
pounds is in process. In addition, the construction of a new concentrator with a milling capacity
of 100,000 tons per day is in the feasibility study stage. It will increase the copper production by
additional 200,000 tons, and we expect to start its operation in 2011.
We continue to integrate aspects of our Mexican and Peruvian operations to achieve operational
synergies and to obtain additional economic benefits. In December 2005, a team made up of
personnel from our operations in Mexico and Peru and an independent consulting group began a
project to review the support activities of both operations.
In the Mexican open pit units, we faced serious labor challenges at the Cananea and La Cari-
dad mines, which were illegally blocked, and affected the production of copper concentrate and
molybdenum. To fulfill client commitments it was necessary to purchase concentrate from third
parties. Even though production was lower then the previous year, the Company benefited from
better metal prices, which added to its strength, allowed it to obtain excellent results.
At present, SCC has mining activities in Mexico and Peru, and exploration in Chile. Exploration
of mining deposits in those countries will allow the Company to increase its reserves, as well as
projects its operations into the future. In December 2006, we announced a significant increase in
the reserves of our Peruvian mining units. Using the same copper price of $0.90 per pound, which
were registered previously the copper reserves of the Toquepala mine increased to 61% and the
copper reserves of the Cuajone mine increased by 22%.
The projects Southern Copper is executing will further consolidate our position amongst the prin-
cipal metal producers in the world, which we believe will provide a more satisfactory economic
return for the shareholders, a greater contribution to the countries and localities where we oper-
ate, and greater benefits to our employees and workers.
On behalf of Southern Copper Corporation’s Board, we express our thanks to all our personnel for
their efforts, work and dedication and to our clients for their continued trust and loyalty, and to
you, our shareholders, for your permanent support.
GERMAn LARREA MOTA-VELASCO
chairman of the board
OSCAR GOnzALEz ROChA
preSident and chief executive officer
XAVIER GARCIA DE QUEVEDO TOPETE
preSident and chief executive officer
ANNUAL REPORT ’06
05
Southern copper corporation and Subsidiaries
five-year production StatiSticS
2006
2005
2004
2003
2002
409,623
506,084
99,575
605,659
11,837
136,592
502,993
591,794
51,035
12,379
131,607
151,775
5,813
112,410
174,404
3,523
426,951
574,976
114,953
689,929
14,803
143,609
575,266
629,353
101,523
12,487
134,505
157,456
5,324
109,855
163,659
5,279
386,364
603,907
114,100
718,007
14,373
133,778
576,372
594,278
102,556
10,796
115,120
160,852
6,004
101,265
194,389
4,657
356,600
547,172
118,744
665,916
12,521
128,760
559,941
537,501
101,069
12,147
105,242
142,373
4,153
97,471
184,528
4,867
357,635
491,828
122,190
614,018
11,747
135,442
562,219
579,905
92,012
15,536
102,145
125,424
4,215
99,589
168,208
4,104
35,805
1,107,458
30,756
298,435
273,299
36,498
1,206,252
325,623
0
285,205
42,125
1,213,030
320,722
0
280,679
47,756
1,182,870
314,920
0
284,006
52,854
1,183,816
281,669
0
281,669
46,606
58,071
2,501
114,595
111,280
63,770
723,984
242,410
200,357
96,582
136,592
19,081
10,555
288,524
139
75,465
122,317
4,200
102,508
118,741
78,454
894,735
282,412
233,682
113,165
143,609
19,545
12,804
316,723
125
72,430
110,385
3,712
93,160
123,228
71,975
820,459
250,890
202,146
69,529
133,778
18,842
15,053
325,652
164
73,916
107,236
3,501
75,692
94,103
70,988
629,505
199,033
163,965
53,822
128,760
20,884
18,932
334,993
217
62,952
91,925
3,428
88,435
86,641
69,336
700,278
239,031
199,901
97,485
135,442
23,800
19,630
380,693
266
copper production mines (tons)
Mined Material (thousand)
Copper in concentrates
Copper SX/EW
Total copper
Molybdenum in concentrates
zinc in concentrates
Silver in concentrates
Smelter/refineries production
Copper
zinc
Silver
toquepala
Mined Material (thousand)
Copper in concentrates
Molybdenum in concentrates
cuajone
Mined Material (thousand)
Copper in concentrates
Molybdenum in concentrates
Smelter/refineries in peru
SX/EW
Smelt concentrates
Blister produced
Anode produced
Cathode produced
mexicana de cobre – caridad
Mined Material (thousand)
Copper in concentrates
Molybdenum in concentrates
cananea
Moved Material
Copper in concentrates
Smelter/refineries in mexico
SX/EW
Smelt concentrates
Anode produced
Cathode produced
Rod produced
underground
Contents in concentrates (tons)
zinc
Lead
Copper
Silver (Kilograms)
Gold (Kilograms)
06
SOUTHERN COPPER CORPORATION
Southern copper corporation and Subsidiaries
copper reServeS (thousands of tons)
OPERATIOnS PERUVIAnS
OPEn PIT
CUAJOnE
TOQUEPALA
OPERATIOnS MEXICAnS
OPEn PIT
CAnAnEA
LA CARIDAD
Sulfides
Average Grade: Copper
Average Grade: Molybdenum
Leachable
Average Grade: Leachable Material
Waste
Total material
Stripping ratio
2,423,252
0.519%
0.017%
16,115
0.496%
6,190,725
8,630,092
2.56
3,716,159
0.491%
0.024%
118,178
0.207%
14,592,989
18,427,326
3.96
6,111,482
0.401%
--
1, 754,218
0.142%
5,963,936
13,829,636
1.26
3,422,081
0.244%
0.029%
1, 247,388
0.117%
1,010,496
5,679,965
0.66
TOTAL
OPEn PIT
15,672,974
0.406%
0.024%
3,135,899
0.136%
27,758,146
46,567,019
1.97
IMMSA
47,372
0.48%
--
--
--
--
--
--
five-year SeLected financiaL and StatiSticaL data
FOR ThE YEARS EnDED DECEMBER 31,
(in millions, except per share and employee data)
2006
2005
2004
2003
2002
consolidated statement of earnings
net sales
Operating costs and expenses
Operating income
Minority interest of investment shares in
income of Peruvian Branch
Extraordinary Loss
net earnings
per share amount
net earnings - basic and diluted
dividends paid
consolidated balance sheet
Total assets
Cash and marketable securities
Total debt
Stockholder’s equity
consolidated statement of cash flows
Cash provided from operating activities
Dividend paid
Capital expenditures
Depreciation & depletion
capital stock
Common shares outstanding
nYSE Price – high
Price – low
Book value per share
P/E ratio
financial ratios
Current assets to current liabilities
Debt as % of capitalization
Employees (at year end)
$
$
5,460
2,406
3,054
9
$
4,089
2,018
2,071
12
3,097
1,614
1,483
5
$
1,577
1,251
326
4
$
1,388
1,201
187
9
$
2,038
$
1,400
$
982
$
84
$
145
$
$
$
$
$
$
6.92
5.13
6,376
1,303
1,528
3,667
2,059
1,509
456
275
294.4
58.12
34.65
12.45
7.79
$
$
$
$
$
$
$
$
$
$
$
$
4.76
2.90
5.688
876
1,172
3,326
1,663
854
471
277
294.4
35.30
20.82
11.33
7.04
3.33
0.65
5,319
756
1,330
2,814
1,172
191
228
193
294.4
27.05
13.27
9.56
7.08
$
$
$
$
$
$
0.29
0.16
4,491
352
1,671
2,023
61
45
65
177
294.4
24.43
7.21
6.87
83.11
$
$
$
$
$
$
0.49
0.18
4,419
175
1,621
1,882
182
22
85
158
294.4
7.77
5.41
6.39
15.41
2.84
5.8%
12,218
2.15
8.2%
12,888
1.70
17.0%
12,794
1.88
39.5%
12,713
1.64
43.4%
12,714
ANNUAL REPORT ’06
07
expansion and modernization program
|
Expansion
n o u n
{ ex•pan• sion }
[1] The act or process of expanding.
[2] The act of increasing (something) in size or volume or quantity or scope; an increase in
economic and industrial activity.
The projects of expansion and modernization have allowed a constant
growth. In 2006, SOUTHERN COPPER CORPORATION continued developing
diverse construction works and concluded the modernization of its
copper smelter in Ilo, Peru.
The Ilo Smelter Modernization Project, the new Smelter will use one Isa-
smelt furnace and two Rotary Holding Furnaces for the copper concentrate
smelting stage in order to separate the matte from the slag. The conversion
stage will be realized in four 15 feet diameter and 35 feet length Pierce
Smith converters. Out of these, three were re-furbished and one is new. A
new Anode Plant, a new Sulfuric Acid Plant and a new Oxigen Plant were
installed, as well as the other necessary auxiliary facilities.
Anodes plant - Casting wheel - Ilo - Peru
Panoramic view Cuajone concentrator - Peru
the Ilo smelter modernization was finished as scheduled.
We continue with our efforts to gradually increase our
production based on our significant mineral reserves.
expansion and modernization program
operationS in mexico
QuEbalIX III, CaNaNEa MINE, MINE of
CaNaNEa
In november 2006, the engineering for the
Breaker Project began, a set of movable and
fixed bands denominated Quebalix III, with an
estimated crushing capacity of 3,200 tons per
hour. Copper will be recovered from crushed
and stored material treated by the leaching
process. The copper resulting from the pro-
cess will be used to feed the ESDE III plant.
Currently, detailed engineering is being de-
veloped and we expect to initiate operations
in the second half of 2008.
SX/EW III PlaNt, CaNaNEa MINE
By the end of 2006, basic engineering for a
SX/EW plant at Cananea was concluded. In
2007, detailed engineering will begin and,
also, the construction of this plant, with a
copper capacity of 90 T.M./day.
MolybDENuM PlaNt, CaNaNEa MINE
This plant will recover molybdenum at the
Cananea mine; it is expected to reach a pro-
cessing capacity of 1,600 T.M/day, with final
estimated production of 10.4 T.M./day of
molybdenum concentrate.
In 2006, we began the metallurgical investi-
gation and the basic engineering of the proj-
ect; during the second half of 2007, we plan
to start the detailed engineering.
EXPaNSIoN of thE CoNCENtrator
PlaNt, CaNaNEa MINE
To extend the capacity for production of
concentrates at the Cananea unit, we are de-
veloping a project to expand the concentra-
tor, which will extend the milling and recov-
ery capacity from 76,700 T.M./day to 95,000
T.M./day. Currently, we are carrying out a
diagnosis of operation of the plant and we
expect that the information of the general
criteria and reach design will be finished by
the second half of 2007.
oPtIMIzatIoN of GaS haNDlING
aND othEr ProjECtS at la CarIDaD
MEtallurGICal CoMPlEX
The gas handling project for the converters
and the Teniente reactor is 62% complete.
The Company expects that the installation of
the first converters bell and, the one for the
Teniente reactor, will be in May 2007, and the
second for the converters will be in October
2007.
Basic engineering to improve the pneumatic
transport for the copper concentrator is un-
der construction at the Teniente Reactor.
Basic engineering for the project “The Treat-
ment Plant of Dusts and Effluents” was con-
cluded.
The project consists of extending the capac-
ity of mineral extraction, from the interior
of the San Diego mine to the Shot Segove-
dad II by means of a transporting band of
1.354 meters in length. With this project, it
will be possible to reach the San Diego mine
reserves, whose metallic contents are the
highest of the entire unit. At the moment, the
ramp has been completed and we continue
the reinforcement work to the land to be able
to conclude complementary works and to
initiate the electromechanical facilities that
will be completed next year.
Zacatecas
Deepening of the Shot of the San Martin Unit
The project consists of two phases to deepen
the shot of the unit and thus to be able to
improve the operation of the reserves for a
minimal cost. The first stage contemplates a
deepening of 220 meters for shot and nec-
essary works of the crushing equipment.
The mining work has been completed; what
remains is part of the electromechanical
installation, as well as the grounding of the
breaker.
10
SOUTHERN COPPER CORPORATION
november. The acid plant is under pre-op-
erational testing. The two 22,500 ton tanks
for receiving and storing of the sulfuric acid
produced by the new and the existing acid
plants, were finished in December 2006.
The building, for the Isasmelt smelting fur-
nace, the rotary holding furnaces, the waste
heat boiler and the electrostatic precipitator,
is almost finished. Pre-operational testing of
each equipment and later their control as an
integrated system for the new smelter has
begun.
Construction work on a seaboard terminal to
dispatch sulfuric acid that will be produced
due to the modernization was suspended in
September 2006 until all necessary permits
are obtained. We expect to have the neces-
sary permits in early 2007 to restart the con-
struction of this seaboard terminal as soon
as possible.
The pre-feasibility study for Los Chancas
project is in progress. The study started by
the middle of 2006 and is scheduled for com-
pletion by the second quarter of 2007.
The feasibility study for Tia Maria Project is in
progress. The study is scheduled for comple-
tion by the third quarter of 2007.
In the second phase, starting in 2007-2008,
it will be necessary to deepen the inner shot
II, as well as the construction of new facilities
of loading; in this stage, we will deepen 330
meters of shot, giving continuity to the op-
erations of the unit and allow it to reach the
levels of the mineral with greater potential.
operationS in peru
Concerning the expansion and modernization
program that has been taking place in recent
years, we can announce the following:
In Toquepala, the leach dump, crushing and
conveying project reached 99.1% progress in
December 2006. Overland conveyor 15 was
completed and overland conveyor 16 is un-
der construction, with 4.6 kilometers in total
length. These conveyors are being used to
make the ramp that will provide access to
the leach dump formations at level 2890. At
the end of 2006, 34.5 million tons out of a
total of 39.5 million tons of material were
deposited. The ramp construction is estimat-
ed to be completed in early 2007.
At the same time, the new PLS dam con-
struction project is under way. This project
complements the leach dump project, since
these new deposits will require new collec-
tion dams. At December 2006, the project
had reached 84.5% completion. The PLS dam
is completed; pending completion are lines to
conduct PLS and raffinate, the acid addition
systems and 13.8 Kv power distribution lines
which are in the process of installation.
Studies on possible sites for the disposal tail-
ings from Toquepala and Cuajone were fin-
ished. The alternative recommended was to
increase height of the Quebrada honda dam,
using the conventional cycloning method.
Detailed engineering was finished. The pro-
curement process has started with the order-
ing of main equipment with long lead-times.
The project has reached 28.5% completion.
The installation work for a diversion con-
veying system to the Toquepala Concentra-
tor using the primary crushing for leaching
dumps to feed material to the concentrator
is in process. This is necessary in order to
avoid losing production when maintaining
the original crusher of the concentrator. The
work has reached 72% completion.
In Cuajone, work began on the construction
of the new leaching pad phase III for oxide
minerals, that will allow us to operate for
another five years. The project has reached
68% completion.
The Ilo smelter modernization project, will use
one Isasmelt furnace and two rotary holding
furnaces for the copper concentrate smelt-
ing stage in order to separate the matte from
the slag. The conversion stage will be realized
in four 15 feet diameter and 35 feet length
Pierce Smith converters. Out of these, three
were re-furbished and one is new. A new
anode plant, a new sulfuric acid plant and a
new oxygen plant were installed, as well as
the other necessary auxiliary facilities.
Processing capacity will be 1.2 million tons
of copper concentrate per year. It is antici-
pated that sulfur capture will be 95%, above
current Peruvian environmental legislation
requirements. The final product of the new
smelter is copper anodes replacing the blister
bars that were previously produced.
During 2006, construction work at the smelt-
er continued, reaching 98.8% completion in
December 2006. The anode plant part of this
project started its operation in January 2006,
converters 5 and 6 were upgraded in March
and April, respectively, the new power sub-
station of 70 MVA was put into operation in
April, the new seawater intake started opera-
tion in May, converter 7 was upgraded in July,
the two desalination plants of 55 m3/h, each
one, started operation in August, the oxy-
gen plant no. 2 started operation in October,
the new converter 4 started its operation in
ANNUAL REPORT ’06
11
exploration
|
Exploration
n o u n
{ ex •plo •ra•tion }
[1] An act or instance of investigating; a careful systematic search.
[2] The investigation of unknown regions; to travel for the purpose of discovery.
SOUTHERN COPPER CORPORATION continues with an intensive program
of exploration in order to locate new deposits and to increase the
reserves of the mines in Mexico, Peru and Chile.
In Mexico, Southern Copper Corporation controls 513,928 Hectares of mining
concessions. In Peru, we have direct control of 114,133 Hectares, and in Chile, 32,258
Hectares are controlled through exploration mining concessions.
MEXICo ProjECtS
PEru ProjECtS
ChIlE ProjECtS
• Cananea
•
•
La Caridad
El Arco
• Angangueo
• Buenavista
• Carbon Coahuila
•
•
•
•
Los Chancas
Tantahuatay
Tia Maria
El Fiscal
•
•
•
El Salado
Sierra Aspera
Esperanza
• Catanave
Panoramic view Toquepala mine - Peru
Overland conveyors for leaching dumps
In 2006, uS$26.9 million were invested in exploration
programs, compared to uS$24.4 million in 2005, and
uS$15.6 million in 2004.
Southern Copper Corporation continues
with an intensive exploration program to
find new mineral deposits and to increase
reserves at our operating mines in Mexico
and Peru, as well as at exploration projects
in Chile. In 2006, $22.7 million were invested
in exploration programs, compared to $24.4
million in 2005, and $15.6 million in 2004.
In Mexico, we control 513,936 hectares of
mining concessions for exploration and ex-
ploitation. In Peru, we have direct control
of 114,133 hectares for exploration, and in
Chile, 35,258 hectares are controlled through
exploration mining concessions.
MEXICo
In addition to exploratory drilling programs
at existing mines, we are currently conduct-
ing exploration to locate mineral deposits at
various other sites in Mexico. In particular,
we have identified significant copper and
gold deposits at El Arco site.
El Arco
The El Arco site is located in the state of Baja
California in Mexico. Preliminary investiga-
tions of the El Arco site indicate a mineral
deposit of 846 million tons of sulfide with
average copper grades of 0.51% and 0.14
grams of gold per ton, and 170 million tons
of leach materials with average copper
grades of 0.56% . Currently we are in the
process of identifying water sources for a
leaching operation, and have finished the
first test hole that indicates good water po-
tential.
Angangueo
The Angangueo site is located in the state
of Michoacan in Mexico. A mineral deposit
of 13 million tons has been identified with
diamond drilling. Testing indicates that
the mineral deposit contains 0.16 grams of
gold and 262 grams of silver per ton, and is
comprised of 0.79% lead, 0.97% copper and
3.5% zinc. During 2005, we received the ap-
proval for our environmental impact study
and we are in the process of obtaining land
use approval. During 2006, we have been
negotiating with the state of Michoacan to
purchase various properties essential to the
operation.
Buenavista
The Buenavista project site is located in the
state of Sonora in Mexico, adjacent to the
Cananea ore body. Drilling and metallurgical
studies have shown that the site contains a
mineral deposit of 36 million tons contain-
ing 29 grams of silver, 0.69% of copper and
3.3% of zinc per ton. A new “scoping level”
study indicates that Buenavista may be an
economical deposit, but further diamond
drilling is needed to upgrade resources and
further metallurgical testing to firm up the
flotation process.
Carbon Coahuila
In Coahuila, an intensive exploration pro-
gram of diamond drilling has identified two
additional areas, Esperanza with a potential
for plus 30 million tons of “in place” coal
and Guayacan with a potential for 15 million
tons of “in place” coal, that could be used for
a future coal-fired power plant.
The Chalchihuites
The Chalchihuites project is located in the
state of zacatecas. It is a contact deposit
with mixed oxides and sulfides of lead, cop-
per, zinc and silver. A drilling program, in
the late nineties, defined 16 million tons
containing 95 grams of silver, 0.36% lead,
0.69% copper and 3.08% zinc per ton. Pre-
liminary metallurgical testing indicates a
exploration
Toquepala mine - Peru
Loading operations
14
SOUTHERN COPPER CORPORATION
leaching precipitating-flotation (LPF) recov-
ery process that can be applied to this ore.
Due to favorable metal prices, an evaluation
of this ore body was started.
PEru
Los Chancas.
The Los Chancas project, located in the de-
partment of Apurimac in southern Peru, is a
copper and molybdenum porphyry deposit.
The exploration program and the final phase
of the metallurgical testing were completed
in early 2006. The pre-feasibility studies
started in mid 2006 and should be com-
pleted by early 2007, when commercially ex-
ploitable reserves will be better defined. To
date there are 200 million tons with a copper
grade of 1.0%, 0.07% molybdenum and 0.12
grams of gold per ton.
Tantahuatay.
The Tantahuatay project is located in the
department of Cajamarca in northern Peru.
The exploration work is intended to evaluate
the upper part of the deposit mainly for gold
recovery. Work to date indicates mineral-
ization of 27.1 million tons, with an average
gold content of 0.89 grams per ton and 13.0
grams of silver per ton. We have a 44.25%
share in this project. During the last years
we have concentrated our efforts on dealing
with social and environmental concerns of
communities near the project.
Tia Maria.
The Tia Maria project, located in the depart-
ment of Arequipa on the southern coast of
Peru, is part of a copper porphyritic sys-
tem. In 2006 the diamond drilling program
was completed and the project’s feasibility
studies were initiated considering the new
porphyritic copper-gold deposit recently
discovered of La Tapada, as part of the Tia
Maria project. During 2006 a total of 41,195
meters of diamond drilling was performed
and we expect to conclude the infill drilling
in the first months of 2007.
The feasibility study of the Tia Maria proj-
ect is expected to be concluded by the third
quarter of 2007.
Other Peruvian Prospects.
As part of our 2006 exploration and devel-
opment program, we drilled 2,410 meters in
the prospect named El Fiscal, which is un-
Toquepala - Peru - Spreader at the end of overland
conveyors for leaching dumps
der exploration for copper. The intention is
to intensify exploration during 2007. The
Portuguesa prospect has been explored for
gold in the Department of Ayacucho in the
central Peruvian sierra, with a total of 2,580
meters of diamond drilling.
ChIlE
In Chile we have control of 35,258 hectares
of mining rights, and are currently develop-
ing different exploration programs.
El Salado.
The El Salado prospect, located in the
Atacama Region,
is being explored for
copper-gold. Through 2006, 20,350 meters
of diamond drilling were completed, 8,326
meters was drilled in 2006. Likewise, in
the Sierra Aspera, a copper-gold prospect,
located in the north of Chile, 1,128 meters of
diamond drilling was performed.
Other Chilean Prospects.
There are other prospects such as Esperanza,
located in the Atacama region, where drill-
ing started at the end of 2006. We are also
continuing with the exploration of Catanave
in the Tarapaca region.
ANNUAL REPORT ’06
15
SCC miners in Mexico
community outreach |
Development
n o u n
{ de •vel •op •ment }
[1] A process in which something passes by degrees to a different stage.
[2] A process of economic, social, cultural or political growth of a human community.
SOUTHERN COPPER CORPORATION substantially stimulates the economy
growth in the south of Peru and is particularly interested in promoting
the sustainable development and wellbeing of the region’s population
by carrying out Social Investment actions in the neighboring
communities.
Our social performance in these communities sustains in the base of the
philosophy of co-responsibility and co-participation, involving various
institutions of the surroundings in the Agreed Plans of Development of the
diverse local governments. It is through this modality that we act as a facilitator
and are an actor else in a greater bet of the localities of our surroundings
towards their sustainable development.
our social performance in these communities sustains
the philosophy of co-responsibility and co-participation,
involving various institutions of the surroundings in
the agreed Plans of Development of the diverse local
governments.
community outreach
mexican operationS
IMMSa DIVISIoN
The IMMSA Division actively participates by
promoting environmental culture, working
with primary schools where we give talks,
workshops, courses, promote recycling, eco-
logic creativity, ecologic journeys and camps
aiming at educating environmental leaders
that may foster ecologic awareness.
The Division coordinates with different insti-
tutions of the health sector to carry out edu-
cational and training activities, such as talks,
courses, campaigns concerning hygiene, nu-
trition, drug addiction among others. It also
supports health sector institutions to carry
out vaccination campaigns.
The Company is concerned with the educa-
tion and development of the neighboring
communities and gratuitously gives cosmet-
ics, sewing, manual works, first aid, comput-
ing, bakery, yoga courses and workshops,
as well as informative sessions for health
and environmental self-care, among others
things.
MORALES, and participates in organizing,
disseminating and co-sponsoring several
athletics events.
IMMSA also participates in paving streets
and sidewalks, as well as city landscaping.
The Unit Santa Barbara unit, located in the
State of Chihuahua, constructed basketball
courts in the Benito Juarez primary school, in
coordination with the municipality. The Com-
pany donated waste containers to schools in
the region and the city councils of Santa Bar-
bara and Parral.
CaNaNEa aND la CarIDaD uNItS
Cananea and La Caridad participate in pro-
moting environmental culture and they are
present in different forums on this matter,
as well as in community non-governmental
organizations.
Additionally, these units support the her-
mosillo City Ecologic Center, located in the
state of Sonora, which contributes to the
conservation of the Mexican gray wolf, an
endangered species.
In addition, the IMMSA Division promotes
sports among the population, providing
them with facilities to access their fields and
facilities where more than 40 amateur soccer
teams and more than 50 baseball and soft-
ball teams participate. Several educational
institutions also hold their inter-institutional
matches at IMMSA facilities. In neighbor-
ing towns we hold national day and charity
activities. The Division also promotes the
IMMSA Children Soccer League – InFOnAVIT
The emergency brigades of both units sup-
port neighboring communities in case of fire,
natural disasters or environmental contin-
gencies. In addition, the Cananea unit coop-
erates with the Volunteer Firefighter Body by
doing the preventive maintenance on their 4
firefighting equipment.
The La Caridad unit organizes different so-
cio-cultural activities such as manual work
workshopw, bakery, pottery, guitar, carpen-
Reforestation Program - Mexico
18
SOUTHERN COPPER CORPORATION
try. It also organizes exhibits and talks on
pre-school education, children development,
and personal achievement, among others.
On January 6, the La Caridad unit distributed
toys among low income children of Esqueda,
in the state of Sonora.
its policy of social responsibility that is un-
dertaken, operatively, in the design and de-
velopment of projects and programs of social
investment. Our methodology of intervention
prioritizes economic, social and financially vi-
able projects that contribute to the sustain-
able development of these communities.
The Cananea unit maintains the Cananea city
public library, which is rated as the sixth in
the state of Sonora. This library provides free
Internet service and workshops for children.
Similarly, the city Museum is maintained
by Cananea. The museum exhibits objects,
documents, historical documents and photo-
graphs, as well as temporary exhibits.
Both units frequently support different edu-
cational and social institutions of their com-
munity, facilitating transport for students
and senior citizens to special events and ac-
tivities.
These units develop sports programs for their
workers where the community at large can
also participate.
The La Caridad unit supports water supply
organizations, providing tankers for distribu-
tion to the community during drought times.
Similarly, when there are water supply prob-
lems, the Cananea unit supports the commu-
nity with potable water pumping to the city’s
supply system.
peruvian operationS
Southern Copper is identified with the socio-
economic reality of the communities of the
highlands of Moquegua and Tacna through
Our social performance in these communities
is sustained on the philosophy of co-respon-
sibility and co-participation, involving vari-
ous institutions of the surroundings in the
Agreed Plans of Development of the diverse
local governments. It is through this modal-
ity that we act as a facilitator and partici-
pate in the greater bet of the localities of our
surroundings localities for their sustainable
development.
In 2006, SCC developed the following proj-
ects among others:
• Water resource management: In the
valley of Torata (Moquegua), the study of
the Torata Valley is being completed, it will
determine the supply and real demand of
water to prioritize and orient futures so-
cial projects. In addition, 50 gates were
installed to optimize irrigation in the val-
ley. We continue supporting the Torata
User Board, logistically and technically so
they can participate in local budgeting in
Candarave (Tacna). This will benefit the
districts of Cairani, huanuara, Candarave
and Quilahuani. We are also building and
rehabilitating minor irrigation infrastruc-
ture in ten irrigation committees. In the
valleys of Locumba and Ite, we are work-
ing on infrastructure of smaller irrigation
projects.
ANNUAL REPORT ’06
19
the Company is concerned with the education and
development of the community and gratuitously give
sewing, manual works, first aid, computing, bakery and
workshops, as well as informative sessions for health and
environmental self-care, among others.
• Agriculture: In Candarave, potato and
oregano seed areas were strengthened.
There was built a storage facility for the
production and commercialization of
oregano sprouts, adding value to this
product, in addition to other actions that
promote their export. In Torata, we are
supporting, in co-management with the
municipality, the production and com-
mercialization of products like avocado,
oregano and apricot.
• Cattle raising: In Candarave, we con-
tinue supporting genetic
improvement
of sheep, and promoting cattle raising
through an artificial insemination pro-
gram. In Torata, we provide technical and
animal health assistance. We created the
Torata Alta Farming Producer Association
and facilitated its entrance to the market
of Moquegua, through their family farm
programs for guinea pig raising. We also
provide farming technical assistance in the
Ilubaya Sector. In Suches, huaytire, Santa
Cruz, Quebrada honda and Tacalaya, we
are restarting the genetic research pro-
gram with South American camelids in an
integrated way. At the same time, we con-
tinue working in controlling sarcosistiosis
and promoting sale of camelid meat. To do
so, we have completed the construction of
a slaughter area in huaytire. In higuerani,
(Ilabaya-Tacna), the reproducing guinea
pig raising project was strengthen and we
provide permanent technical assistance
on animal health and cattle management
through the different communities de-
voted to this field. In Arondaya (Cuajone),
we are continuing a program to develop
the existing subsistence cattle raising so
as to improve raising of camelids, sheep
and goats, by training area youths in vet-
erinary management.
• Commercial development: In Candarave,
we continue strengthening the sale of
meat through the Farming Producer Asso-
ciation made up by the same cattle raisers
who are trained and advised by SCC tech-
nicians. In higuerani, we strengthened the
guinea pig sale channel, and additionally,
we have started an integral program with
all our communities, developing a market
study for farming products in Moquegua,
Ilo and Tacna and a training program for
rural enterprise management.
• Basic infrastructure: In the district of
huanuara (Candarave) the construction of
a highway of 12 kilometers began and it
will connect this district with its provincial
capital. In the huaytire alpaca producing
zone, we continued building shelters, re-
production modules (for controlled popu-
lation) and fences around paddocks, to
facilitate the maximum use of pasture.
• Capacity improvement: Under an ap-
proach of appropriation of new technolo-
gies and skills with productive activities,
plans of qualification for the formation
of promoters in genetic improvement
and animal health have been designed in
ovine, bovine and camelids; qualification
20
SOUTHERN COPPER CORPORATION
SCC participates in the national celebrations of our
neighboring towns as well as in social aid activities.
Mexico
of promoters in control of weeds, forage
production and storage; qualification in
production of potato seed and techniques
of oregano sowing, as well as enterprise
management.
By the end of 2006, mining companies
agreed to annual voluntary contributions for
the next five years, contingent upon metal
prices remaining high (in our case the price
of copper). As part of this program, known
as “Mining Solidarity “ (“Programa Minero de
Solidaridad con el Pueblo”), the Company will
contribute to improve equipment as well as
infrastructure, and to strengthen educational
and health services, which will be offered to
populations in extreme poverty of the re-
gions where we conduct our mining opera-
tions. Also, SCC will participate in nutrition
and development of capabilities programs.
In urban areas, the Company carries out
several programs for vocational training for
young people at social risk, such as the one
called “Sembrando Futuro”. In 2006, these
young people were qualified in handling and
operation of heavy equipment in Ilo; while in
Tacna, they were qualified in electricity, me-
chanics, and maintenance of various equip-
ments. Young people, who obtained high
qualifications, have a priority to be part of
SCC in future projects.
In 2006, the results reached in the Compa-
ny’s Social Program were highly satisfactory
and contributed to improve the social-pro-
ductive conditions of the communities of
our surroundings to elevate their living con-
ditions and efficiently manage the relation
between our Company and the neighboring
areas.
ANNUAL REPORT ’06
21
results of operations |
results
n o u n
{ re •sults }
[1] Something that happens as a consequence; outcome.
[2] A favorable or concrete outcome or effect; profit: a pecuniary gain resulting from the
employment of capital in any transaction.
2006 has been a remarkable year for SOUTHERN COPPER CORPORATION.
Sales reached $5.460 billion and net earnings were $2.038 billion, an
increase of 33.5% and 45.6% respectively, as compared with 2005.
SaLeS: $5,460 biLLion
earninGS: $2,038 biLLion
increaSe: 33.5% and 45,6%
results of operations for the years ended
december 31, 2006, 2005 and 2004
SCC reported 2006 net earnings of $2,037.6 million or diluted earnings of $6.92 per share, com-
pared with net earnings of $1,400.1 million or diluted earnings of $4.76 per share in 2005 and
$982.4 million or diluted earnings of $3.34 per share in 2004.
The increase in the Company’s results for 2006 is due mainly to increased metal prices, particularly
for copper, zinc and silver, the price for molybdenum, however, was lower in 2006. The lower mo-
lybdenum price as well as decreases in the volume of copper, molybdenum and zinc sales reduced
somewhat the increased 2006 earnings. Strikes at some of our Mexican operations were the prin-
cipal reason for the lower volumes.
During 2006, the price of copper on the London Metal Exchange (LME) and the new York Commod-
ity Exchange (COMEX) was $3.05 and $3.09 per pound of copper, respectively, compared to $1.67
and $1.68 in 2005.
The increase over the last three years in the price of molybdenum, has had a significant effect on
the Company’s traditional calculation of cash cost and its comparability between periods. Accord-
ingly, the Company presents cash costs with and without the inclusion of all by-products revenues.
SCC excludes from its calculation of operating cash cost, depreciation, amortization and depletion,
exploration, workers´ participation provisions and items of a non-recurring nature.
The Company’s operating cash cost, as defined, for the three years ended December 31, is as
follows:
2006
2005
(in cents per pound)
2004
Cash cost per pound of copper produced
Cash cost per pound of copper produced
0.152
0.030
(without by-products revenue)
1.276
1.009
0.182
0.852
24
SOUTHERN COPPER CORPORATION
Net sales: net sales in 2006 were $5,460.2 million, compared with $4,089.1 million in 2005 and
$3,096.7 million in 2004. Sales increased by $1,371.1 million in 2006, a 33.5% increase over the
previous year, mainly due to higher prices of copper, silver, and zinc, in spite of the lower volume
of copper and molybdenum sold.
Prices: Sale prices for the Company’s metals are established, mainly, by reference to the prices
quoted in the London Metal Exchage (LME), the new York Commodity Exchange (COMEX), or
published in the Platt´s Metals Week, for dealer oxide mean prices for molybdenum.
PRICE/VOLUME DATA
2006
2005
2004
Average Metal Prices
Copper (per pound – LME)
Copper (per pound – COMEX)
Molybdenum (per pound)
zinc (per pound – COMEX)
Silver (per ounce – COMEX)
3.05
$
3.09
$
$ 24.38
1.49
$
11.54
$
1.67
$
1.68
$
$ 31.05
0.63
$
7.32
$
1.30
$
1.29
$
$ 15.95
0.48
$
6.68
$
SALES VOLUME (In ThOUSAnDS)
2006
2005
2004
Copper (pounds)
Molybdenum (pounds) (1)
zinc (pounds)
Plata (onzas)
1,386,199
25,643
281,079
19,776
1,540,043
32,155
294,180
19,750
1,564,549
31,635
266,587
20,211
(1) The Company’s molybdenum production is sold in the form of concentrates.
Volume represents pounds of molybdenum contained in concentrates.
ANNUAL REPORT ’06
25
Cuajone Concentrator - Molybdenum Plant - Peru
Ilo Smelter Modernization -
Steam superheater - Peru
environmental matters |
Commitment
n o u n
{ com •mit •ment }
[1] The act of committing, pledging, or engaging oneself.
[2] The state of being bound emotionally or intellectually or legally to a course of action
or to another person or persons.
The Peruvian government annually performs environmental audits to
the mining and metallurgical operations of the company reviewing the
environmental commitments and the compliance of legal requirements.
This 2006, SOUTHERN COPPER CORPORATION fulfilled precisely the laws and
regulations.
Cuajone Concentrator - Flotation cells
Peru
the Company has instituted extensive environmental
conservation programs at its mining facilities in Mexico
and Peru.
environmental affairs
mexican operationS
The Company’s operations are subject to ap-
plicable Mexican federal, state and municipal
environmental laws, to Mexican official stan-
dards, and to regulations for the protection of
the environment, including regulations relat-
ing to water supply, water quality, air quality,
noise levels and hazardous and solid waste.
The main law applicable to the Company’s
Mexican operations is the federal Ley General
del Equilibrio Ecologico y la Proteccion al Am-
biente (the General Law of Ecological Balance
and Environmental Protection, or the Environ-
mental Law), which is enforced by the Procura-
duria Federal de Proteccion al Ambiente (Fed-
eral Bureau of Environmental Protection or the
PROFEPA). The PROFEPA monitors compliance
with environmental legislation and enforces
Mexican environmental laws, regulations and
official standards and, if warranted, the PRO-
FEPA may initiate administrative proceedings
against companies that violate environmental
laws, which in the most egregious 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 Codigo Penal Fed-
eral (Federal Criminal Code), the PROFEPA must
inform corresponding authorities regarding en-
vironmental non-compliance.
Mexican environmental regulations have be-
come increasingly stringent over the last de-
cade, 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 Feb-
ruary 1999. however, the Company’s manage-
ment does not believe that continued compli-
ance with the Environmental Law or Mexican
State environmental laws will have a material
adverse effect on the Company’s business,
properties, result of operations, financial con-
dition or prospects or will result in material
capital expenditures. Although the Company
believes that all of its facilities are in mate-
rial compliance with applicable environmental,
mining and other laws and regulations.
For the Company’s Mexican operations,
environmental capital expenditures were
$10.5 million and $7.5 million in 2006 and
2005,
respectively. Approximately $3.9
million has been budgeted for environmental
capital expenditures in 2007, to complete
the current environmental programs in the
Mexican operations.
The Company has instituted extensive en-
vironmental conservation programs at its
mining facilities in Mexico and Peru. The
Company’s environmental programs include
water recovery systems to conserve water and
minimize impact on nearby streams, refores-
tation programs to stabilize the surfaces of
the tailings dams and the implementation of
scrubbing technology in the mines to reduce
dust emissions.
IMMSa DIVISIoN
• At the zinc refinery located in the San Luis
Potosi state, we requested the Environment
and natural Resources Secretariat (SEMAR-
nAT), to start a procedure to declare the
areas around the refinery as an “Intermedi-
ate Safeguard zone” (zIS). zIS is defined as
a safety area located within a land stretch
that is a buffer between some establish-
ments and nearby population centers.
• Environmental
Improvement Plan was
concluded; it is a commitment established
by the Company with federal and state au-
thorities, which reduced emissions from
the San Luis Cobre Plant; as well as con-
struction, rehabilitation and improvement
of walking spaces, streets, gardens, drain-
28
SOUTHERN COPPER CORPORATION
age, paving and spaces for recreation of
the Morales Pirules, Infonavit, Green Rus-
tic and Stones colonies.
• In the state of San Luis Potosi, there is a
tree nursery, from which more than 40,000
trees were distributed for the IMMSA divi-
sion properties, as follows; employers and
laborers division; community support;
schools; the Environment and natural Re-
sources Secretariat and other governmen-
tal agencies.
• The Santa Barbara Unit, located in the
state of Chihuahaua, is in the process of
obtaining the “Clean Industry” certificate
under the Federal Environment Protection
Attorney’s Office (PROFEPA).
• The San Martin Unit, located in the state
of zacatecas, started the certification pro-
cess as a Clean Industry.
CaNaNEa aND la CarIDaD
• In 2006, we started the “Clean Industry”
certification process for the Cananea mine
and La Caridad mine and the concentrator
plants, as well as for hydrometallurgical and
molybdenum plant at La Caridad. We also
registered an Action Plan with the Federal
Environment Protection Attorney’s Office
after having performed the correspond-
ing environmental audits. Additionally, we
started a Voluntary Environmental Audit
process atthe Cananea concentration plant.
• We concluded Cananea’s unit internal refor-
estation by planting 694,000 trees. The refor-
estation program is promoted by the national
Forestry Commission (COnAFOR) and SCC is
the largest contributors in the country.
• In the reforestation program, we continue
linking municipalities within the mining
area of influence, around our units and
plants. During 2006, 13 municipalities in
the highlands of Sonora were reforested
with 1,374,000 trees. To achieve this, we
were aided by the national Defense Secre-
tariat and the national Forestry Commis-
sion. Currently, 1,100,000 trees are devel-
oping in the nursery.
• We got the “Clean Industry” certifica-
tion from the natural Gas Transportation
System (Gasoducto Douglas – nacozari)
facilities, within the Environmental Au-
dit Program of the Federal Environment
Protection Attorney’s Office. Likewise,
audits are being made at our facilities at
La Caridad (hydrometalurgy plant, wire
rod plant, precious metals plant, con-
centrator plant, molybdenum plant and
lime plant) all of these in the state of So-
nora.
• We took part in the “Clean Community”
programs by participating in talks given
at primary and secondary schools and by
handing out garbage collecting contain-
ers. These activities took place in 12 cities
in the state of Sonora.
• Currently, we actively participate in the
Technical Advisor Council and the Task
Force for protecting and preserving the
Valle de los Cirios flora and fauna in Baja
California. The Reserve Management Plan
was concluded for “El Arco”, the Company
received the authorization that permits
mining activities.
• The recycling program of paper and card-
board (refreshments, water, milk, juice
packages, etc.) promoted PET is going on.
Receipts obtained are donated for social
and assistant institutions that participate
in this program.
Cuajone concentrator - Mills control room - Peru
Tree nursery at Mexicana de Cobre - Mexico
ANNUAL REPORT ’06
29
IMMSa DIVISIoN
CAnAnEA AnD LA CARIDAD
the Company’s environmental programs include water
recovery systems to conserve water and minimize impact
on nearby streams, reforestation programs to stabilize
the surfaces of the tailings dams and the implementation
of scrubbing technology in the mines to reduce dust
emissions.
• The Company participates in the Advisory Technical Council for protecting natural areas in
Ajos Bavispe, in the north of the State of Sonora.
• The Company participates in a commission which promotes new environmental regulations,
supervised by SEMARnAT.
• In november 2006, the Company signed an environmental commitment with CAMIMEX and
the national Forest Commission for planting trees. SCC has a significant participation (85%)
in this agreement.
peruvian operationS
The Company’s operations are subject to applicable Peruvian environmental laws and regulations.
The Peruvian government, through its Ministerio de Energia y Minas (the Ministry of Energy and
Mines, or “MEM”) conducts annual audits of the Company’s Peruvian mining and metallurgi-
cal operations. Through these environmental audits, matters related to environmental com-
mitments, 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 accordance with Peruvian regulations, in 1996 SCC submitted its Programa de Adecuacion
y Manejo Ambiental (the Environmental Compliance and Management Program, known by its
Spanish acronym, PAMA) to the MEM. A third-party environmental audit was conducted in order
to elaborate the PAMA. The PAMA applied to all current operations that did not have an approved
environmental impact study at the time.
SCC’s PAMA was approved in January 1997 and contained 34 mitigation measures and projects
necessary to (1) bring the existing operations into compliance with the environmental standards
established by the MEM and (2) identify areas impacted by operations that were no longer active
and needed to be reclaimed.
By the end of 2006, 32 of these projects were completed, including all PAMA commitments re-
lated to the Company’s operations in Cuajone and Toquepala. The two pending PAMA projects
were related to the Ilo smelter operations. The primary areas of environmental concern were the
smelter reverberatory slag eroded from slag deposits up until 1994, and atmospheric emissions
from the Ilo smelter.
PAMA commitments related to the slag remediation program and the smelter modernization proj-
ect were both completed by January 31, 2007. With the completion of these projects SCC fulfilled
its environmental commitments under the PAMA. With the smelter modernization project, the
Company increased sulfur recapture over the 92% requirement established by the PAMA. The new
smelter will maintain production at current levels and will use advanced technology to drastically
reduce sulfur emissions, in order to achieve the main goal of the project.
Reforestation program in our mining operations - Mexico
30
SOUTHERN COPPER CORPORATION
A new stationary 17 meter high smelting fur-
nace (IsaSmelt), with a nominal capacity to
treat 165 tons of copper concentrate per hour
has been installed as part of the modernization
project. The furnace uses Isa technology which
is successfully used throughout the world. Ad-
ditionally, two rotary holding furnaces (RhF)
have been installed to separate the slag. The
matte (62% copper) from the RhF is then sent
to Peirce-Smith converters to produce 99.3%
pure copper. Two 400 ton anode furnaces re-
ceive the copper from the converters and with
the use of two casting wheels 99.7% pure cop-
per anodes are produced. Since January 2006,
when the anode furnaces entered operation,
blister copper production has been basically
replaced by anode copper.
As part of the smelter modernization project
a new 1000 ton per day oxygen plant as well
as a new 800,000 tons per year sulfuric acid
plant, two desalination plants, and two efflu-
ent treatment plants have been constructed.
Spending on this project through December
31, 2006 was $549.4 million (which includes
$56.1 million of capitalized interest).
In 2003, the Peruvian Congress published a
new law announcing future closure and re-
mediation obligations for the mining indus-
try. The law was amended in May 2004 and
again in May 2005. The current modification
establishes that mining companies submit their
mine closure plans within one year of publica-
tion of final regulations. On August 16, 2005
final regulations were published and the Com-
pany initiated the preparation of the required
mine closure plan. This plan, in its final form,
will include the estimated cost required for the
Peruvian operations, including cost at the Ilo
smelter and refinery, tailings disposal, and the
dismantling of the Toquepala and Cuajone con-
centrators, shops and auxiliary services.
As the law requires that the mine closure plan
be prepared by an independent consulting en-
tity, the Company engaged Walsh Peru S.A., a
Peruvian subsidiary of Walsh Environmental
Scientists and Engineers, Inc. (Boulder, Colo-
rado), and the Mines Group Inc (Reno, nevada)
independent consulting entities to prepare the
mine closure plan. The conceptual plan, with-
out costs, was submitted to MEM in August
2006 and is subject to review by MEM for 45
days. After the MEM review (as of the end of
February, 2007 this review is pending) the Com-
pany will have 90 days to prepare and resubmit
the mine closure plan, including costs, which
is then subject to approval by MEM and open
to public discussion and comment in the area
of Company operations. Additionally, the law
requires companies to provide financial guar-
antees to insure that remediation programs are
completed. The Company believes the liability
for these asset retirement obligations cannot
currently be precisely measured, or estimated,
until the Company has completed its final mine
closure plan and is reasonably confident that
it will be approved by MEM in most material
respects. however, the Company has made a
preliminary estimate of this liability and has
recorded such amount in its financial state-
ments. As of December 31, 2006, the Company
has recorded $5.8 million for this liability. The
Company believes that this estimate should be
viewed with caution, pending final approval of
its mine closure plan, expected in 2007.
For the Company’s Peruvian operations, envi-
ronmental capital expenditures were $169.9
million, $234.6 million and $65.6 million in
2006, 2005 and 2004, respectively. The Com-
pany expects to spend approximately $40.5
million for environmental capital expenditures
in 2007, for the completion of the Ilo smelter
modernization project and thus completion of
the Environmental Compliance and Manage-
ment Program (PAMA).
ANNUAL REPORT ’06
31
General Information
Description of Operations
and Development
reGardinG the iSSuinG entity
memberS of the board of directorS
General information, description of operations and development
information reLated to itS conStitution and their inScription in the pubLic reGiStry
See: “Brief historical review from the constitu-
tion of the Company” on page 39.
Brief Description: Southern Copper Corporation
(SCC) is a copper, molybdenum, zinc and silver
integrated producer. All our mining, smelting
and refining facilities are located in Peru and
Mexico, and we carry out exploration in said
countries and in Chile. Our activities make us
the largest mining company in Mexico and
Peru. We are the fourth mining company that
trades on stock market in the world, based
on our mining production of 2005. This is
in agreement with the publication “Copper
Industry and Markets Quarterly Information
- October 2006 of CRU International.”
Our operations in Mexico are carried out by
Minera Mexico S.A. de C.V., a subsidiary we
bought on April 1, 2005. Minera Mexico main-
ly develops mining and processing of cop-
per, zinc, silver, gold, lead and molybdenum.
Minera Mexico operates through subsidiar-
ies that are grouped in three separate units.
Mexicana de Cobre S.A. de C.V. (together with
its subsidiaries, “Mexcobre Unit”), operates a
copper open pit mine, a copper concentrator,
a SX/EW plant, a smelter, two refineries and a
wire rod plant. Mexicana de Cananea S.A. de
C.V. (together with its subsidiaries, “Cananea
Unit”) operates a copper open pit mine locat-
ed in one of the areas with more copper re-
serves in the world, a copper concentrator and
two SX/EW plants. Industrial Minera Mexico
S.A. de C.V. (“Immsa”) and Minerales Metalicos
del norte S.A. (together with Immsa and its
subsidiaries, “Immsa Unit”) operates five un-
derground mines producing zinc, lead, copper,
silver and gold, and a coal and coke mine and
several industrial processing facilities for zinc
and copper.
Our operations in Peru comprise mining, mill-
ing and flotation of minerals to produce cop-
per and molybdenum concentrates. The smelt-
ing of copper concentrates produces copper
anodes which are treated in the refinery to
produce cathodes. As part of this production,
we also produce significant amounts of mo-
lybdenum and silver. SCC also produces cop-
per cathodes by using SX/EW technology. We
operate the Cuajone and Toquepala mines in
the heights of the Andes, approximately 984
kilometers southeast of the city of Lima, Peru.
We also operate a smelter and refinery west
of the mines at Toquepala and Cuajone, in the
city of Ilo, Peru.
We use advanced mining and processing
methods, including global positioning systems
(GPS) and computing mining system. Our op-
erations are highly integrated vertically, which
permits us to manage the whole production
process, from mining to refined copper and
other production, as well as transportation
and logistics, by using our own facilities, em-
ployees and equipments.
34
SOUTHERN COPPER CORPORATION
ECoNoMIC GrouP
SCC, indirectly, makes part of “Grupo Mexico S.A.B. de C.V.” which owns 75.1% of its shares.
nAME OF ThE COMPAnY
LOCATIOn InSCRIPTIOn %
In ThE RPMV
SeveraL activitieS
1 Grupo Mexico, S.A. de C. V.
2
3
4
Grupo Mexico Servicios, S.A. de C.V.
Mexico Proyectos y Desarrollo, S.A. de C.V.
Mexico Constructora Industrial
raiLroad activitieS
5
6
7
8
9
10
Infraestructura y Transportes Mexico, S.A. de C. V.
Grupo Ferroviario Mexicano, S.A. de C.V.
Ferrocarril Mexicano S.A. de C.V.
Ferro Sur S.A. de C.V.
Texas-Pacífico
Intermodal Mexico, S.A. de C.V.
mininG activitieS
Americas Mining Corporation (“AMC”)
ASARCO USA Inc.
Southern copper corporation (Scc)
Americas Sales Company, Inc.
Minera Mexico, S. A. de C. V.
SDG Mexico Apoyo Administrativo, S.A. de C.V.
Industrial Minera Mexico, S.A. de C. V.
Mexicana de Cananea, S.A. de C. V.
Mexicana de Cobre, S.A. de C. V.
Mexicana del Arco, S.A. de C.V.
Mexico Compañia Inmobiliaria, S.A.
Minerales Metalicos del norte, S.A.
Minera Mexico Internacional, Incorporated
Servicios de Apoyo Administrativo, S.A. de C.V.
Western Copper Supplies
Global natural Resources, Inc.
Logistics Services Incorporated (LSI)
Multimines Corporation
Southern Peru Limited
Southern Peru Copper Corporation, Chile Agency
Southern Peru Copper Corporation, Sucursal del Peru
Compañia Minera Los Tolmos, S.A.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
nOTE:
1.- Includes 82.69% of patrimony and 16.60% of investment shares.
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
México
E.E.U.U.
Mexico
EE.UU.
EE.UU.
EE.UU.
EE.UU.
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
EE.UU.
Mexico
EE.UU.
EE.UU.
EE.UU.
EE.UU.
EE.UU.
Chile
Peru
Peru
100.0
99.9
99.98
75.0
74.0
100.0
100.0
100.0
100.0
99.99
100.0
75.1
100.0
99.95
100.0
99.99
99.99
99.97
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.291
97.31
ANNUAL REPORT ’06
35
CORPORATE CAPITAL AnD COMMOn STOCK
The authorized number of shares are
Issues an Paid Capital: Common Shares
nominal Value of Common Shares
ShARES
320,000,000
294,461,250
$0.01
TOTAL nUMBER AnD PERCEnT OF ShARES
ShARES
InTEREST
Americas Mining Corporation
Common Shares
total
221,113,178
73,348,072
294,461,250
75.1%
24.9%
100.0%
authorIzatIoNS obtaINED for thE DEVEloPMENt of thE buSINESS
mexican operationS
la CarIDaD MINE
“La Caridad Concentrator” started operating in June 1979, with a milling capacity of 72,000 tons per
day.
“La Caridad Concentrator” expanded its capacity in 1986, to 90,000 tons per day.
“Molybdenum Plant” started operating in June 1982, with a capacity to produce 2000 tons of Copper-
Molybdenum Concentrate per day.
“La Caridad SX/EW Plant” started operating in May 1995, with a capacity of 60 tons per day.
la CarIDaD MEtallurGIC CoMPlEX
La Caridad Smelter started operating in July 1986, with a production capacity of 493 anode tons per
day.
La Caridad Smelter expanded its capacity in March 1997, to 932 tons of anodes per day.
“La Caridad Refinery” started operating in July 1997, with a production capacity of 493 tons of cath-
ode copper per day.
“La Caridad Refinery” expanded its capacity in January 1998, to 822 tons of cathode copper per day.
“La Caridad Precious Metals Plant” started operating in May 1999, with a production capacity of
43,836 silver ounces per day, 247 gold ounces per day, and 342 selenium kg per day.
“La Caridad Wire Rod Plant” started operating in April 1998, with a production capacity of 300 tons
of wire rod per day.
“La Caridad Wire Rod Plant” expanded its capacity in March 2000 to 411 tons of wire rods per day.
36
SOUTHERN COPPER CORPORATION
Ilo Smelter - Anodes plant, control panel - Peru
CaNaNEa MINE
“Cananea Concentrator” started operating in
September 1986, with a capacity of 62,500
tons per day.
4,000 tons of ore per day.
5- The Taxco Unit has a milling capacity of
3,300 tons per day.
“Cananea Concentrator” expanded its capacity
6- The Coahuila Unit has a flushing capacity of
in 1988, to 70,000 tons per day.
3,600 tons per day.
“Cananea Concentrator” expanded its capacity
7- The zinc Refinery has capacity to produce
in 1998, to 76,700 tons per day.
285 refined zinc tons per day.
“Cananea SX/EW I Plant” started operating in
1980, with a capacity of 30 tons per day.
8- The San Luis Potosi Copper Smelter has a
production capacity of 66 blister copper
tons per day.
“Cananea SX/EW II Plant” started operating in
1989, with a capacity of 60 tons per day.
“Cananea SX/EW II Plant” expanded its capac-
ity in 2001, to 120 tons per day.
uNDErGrouND MINES
1- The Santa Barbara Unit has milling capacity
of 6,000 tons of ore per day.
2- The Santa Eulalia Unit has a milling capacity
of 1,500 tons of ore per day.
3- The San Martin Unit has a milling capacity
of 4,400 tons of ore per day.
4- The Charcas Unit has a milling capacity of
peruvian operationS
toQuEPala MINE
Toquepala Concentrator: Authorized by Direc-
torial Resolution no.455-91-EM/DGM/DCM
dated July 5, 1991 approved the operation of the
Toquepala Concentrator. The resolution granted
240 hectares of surface land and authorized a
throughput of 39,000 Metric Tons/Day.
Based on Report no. 413-97-EM/DGM/DPDM
dated July 7, 1997 the “Director General de
Mineria” authorized the expansion of the To-
quepala Concentrator to a 43,000 Metric Tons/
Day throughput.
ANNUAL REPORT ’06
37
Based on Report n° 547-2002-EM/DGM/
DPDM, dated november 6, 2002, the “Direc-
tor General de Mineria” authorized the ex-
pansion of the Toquepala Concentrator to a
capacity of 60,000 TM/Day.
Toquepala Leaching Plant (SX/EW): Autho-
rized by Directorial Resolution no. 166-96-
EM/DGM dated May 7, 1996 approved the
operation of the Toquepala SX/EW Plant. The
resolution granted 60 hectares of surface
land and authorized a throughput of 11,850
Tons/Day, equivalent to 35,629 Tons/year of
cathodes.
Based on Report no. 663-98-EM/DGM/
DPDM dated november 10, 1998 the “Direc-
tor General de Mineria” authorized the ex-
pansion of the Toquepala SX/EW Plant to a
18,737 Metric Tons/Day throughput equiva-
lent to 56,336 Tons/year of cathodes.
CuajoNE MINE
Botiflaca Concentrator in Cuajone: Autho-
rized by Directorial Resolution no. 150-81-
EM/DCM dated August 14, 1981 approved
the operation of the Cuajone Concentrator.
The resolution granted 56 hectares of sur-
face land.
Based on Report no. 266-99-EM/DGM/
DPDM dated July 20, 1999 the “Director Gen-
eral de Mineria” authorized the expansion of
the Cuajone Concentrator to a 87,000 Metric
Tons/Day throughput.
Cuajone Leaching Plant (SX): Authorized by
Directorial Resolution no.155-96-EM/DGM
dated May 6, 1996 approved the operation
of the Cuajone Leaching Plant. The resolution
granted 400 hectares of surface land and
authorized a throughput of 2,100 Tons/Day,
which feeds the Toquepala SX/EW plant.
Ilo MEtallurGIC CoMPlEX
Ilo Smelter: Authorized (definitely) by Direc-
torial Resolution no. 0078-69-EM/DGM dat-
ed August 21, 1969 approved the operation
of the Ilo Smelter. The resolution authorized
a production of 400 Short Tons/Day of blister
copper.
Based on Report no.204-2000-EM-DGM-
DPDM dated June 20, 2000 the “Director
General de Mineria” authorized the expansion
of the Ilo Smelter to a 3,100 Metric Tons/Day
throughput of copper concentrates.
Ilo Refinery: Authorized by Report no. 056-
94-EM/DGM/DRDM dated May 27, 1994 the
“Director General de Mineria” authorized
the operation of the Ilo Copper Refinery at
190,000 Metric Tons/Day throughput of blis-
ter copper.
Based on Report no. 506-98-EM/DGM/
DPDM dated September 2, 1998 the “Director
General de Mineria” authorized the expan-
sion of the Ilo Copper Refinery to a capacity
of 658 Metric Tons/Day throughput of blister
copper.
Based on Report n° 080-2002-EM-DGM/
DPDM, dated March 13, 2002, the “Director
General de Mineria” authorized the expan-
sion of the Ilo Copper Refinery to a capacity
of 800 TM/Day.
Sulfuric Acid Plant: Authorized by Directorial
Resolution no. 024-96-EM/DGM dated Janu-
ary 19, 1996 the “Director General de Mineria”
authorized the operation of the Sulfuric Acid
Plant at a production rate of 472 Metric Tons/
Day. Based on Report no. 313-98-EM/DGM/
DPDM dated May 18, 1998 the “Director Gen-
eral de Mineria” authorized the expansion of
the Ilo Sulfuric Acid Plant to a capacity of
300,000 Metric Tons/Year production.
“Coquina Wash Plant and Sea shell Concen-
trates” authorized to operate by Directorial
Resolution nº 110-93-EM/DGM of August
3, 1993. The plant processes 2068MT/day of
raw material (coquina) recovered from near-
by mines. Seashell is produced separating
sand and other materials from the coquina
using sea water washing screens.
38
SOUTHERN COPPER CORPORATION
DESCrIPtIoN of oPEratIoNS aND
DEVEloPMENt rEGarDING thE
ISSuING ENtIty
purpoSe
The purpose of Southern Copper Corporation
(SCC) is to engage in activities allowed by the
laws of the State of Delaware. Its main ac-
tivity is to extract, mill, concentrate, smelt,
treat, prepare for market, manufacture, sell,
exchange and, in general, to produce and
negotiate for sales of copper, gold, silver,
lead, zinc and any other class of minerals
and materials or other materials, effects and
goods of any nature or description; as well as
to explore, exploit, sample, examine, inves-
tigate, recognize, locate, appraise, buy, sell,
exchange, etc., mining concessions and min-
ing deposits. SCC belongs to the CIUU 1320
group.
The term of duration of the Company is indefinite.
brief hiStoricaL review of the
conStitution of the company
The Company was organized on December
12, 1952, according to the Laws of the State
of Delaware of the United States of America,
under the original denomination of Southern
Peru Copper Corporation (“SPCC”), which
was renamed on October 11, 2005, to South-
ern Copper Corporation (“SCC”).
In 1954, SCC established a Branch in Peru
to carry out mining activities in this coun-
try. The Branch was established under public
instrument certified by Public notary from
Lima, Dr. Ricardo Fernandini Arana, on no-
vember 6, 1954.
The Branch is registered in the Electronic Re-
cord nº 03025091 of the Juridical People of
the Registry Office of Lima and Callao.
actionS foLLowinG the compa-
ny’S incorporation:
Capital increase:
By Public Deed dated May 31, 1995, signed
before notary public of Lima, Dr. Carlos A.
Sotomayor Bernos, the Branch capital in-
crease was formalized. It was made through
money contribution by the Company in fa-
vor of its Peru Branch and by the owners of
labor shares, pursuant to Legislative Decree
no. 677. The capital contribution made by the
Company was aimed at increasing the capital
allotted to the Branch by the headquarters
and registered in Peru. The capital contribu-
tion made by the Labor Shares (today Invest-
ment Shares) owners was assigned to the La-
bor Shares account of the Branch for issuing
new Labor Shares.
Part of the money contribution made by the
Company in favor of its Branch and by the
Labor Shares owners was applied as a capital
premium to the Resident account as Addi-
tional Capital.
Exchange of Labor Shares for Common Shares:
On September 7, 1995, “Southern Peru Cop-
per holding Company” was also incorporated
pursuant to the Laws of the State of Dela-
ware, for the purpose of acting as a holding
company that owns all of Southern Peru Cop-
per Corporation’s shares, and performing an
exchange of the shares that were then called
“Labor Shares” (today Investment Shares)
issued by the Branch in Peru, and deliver-
ing to the owners of labor shares a certain
number of Common Shares issued by SPCC in
the United States. As a consequence of this
share exchange, ex-owners of Labor Shares
acquired 17.31% of SPCC’s Capital, and this
company acquired ownership of 80.77% of
the Labor Shares (today Investment Shares).
On December 31, 1995, Southern Peru Cop-
per Corporation changed its corporate name
for “Southern Peru Limited”, and “Southern
Peru Copper holding Company” changed its
corporate name to Southern Peru Copper
Corporation.
As a consequence of this corporate name
change, the mining activities of the company
in Peru started being performed under the
name of Southern Peru Limited, Peru Branch
(SPL).
On December 31, 1998, the merger between
Southern Peru Copper Corporation and
Southern Peru Limited was agreed. The first
company absorbed the second one and as-
sumed all its assets and liabilities, including
the Branch in Peru. This merger did not imply
any change to the share percentage in the
corporate capital or in the net Worth Share
Account (investment shares), which were
kept unchanged.
As a consequence of the merger, the min-
ing activities of the corporation in Peru were
again carried out under the name of South-
ern Peru Copper Corporation, Peru Branch,
or the abbreviated name of “Southern Peru”
and/or the acronym SPCC.
Change of Economic Group:
In november 1999, Grupo Mexico S.A.B. de
C. V., a firm incorporated pursuant to the
Laws of the Republic of Mexico, acquired in
the United Stated 100% of ASARCO Incorpo-
rated, the main shareholder of Southern Peru
Copper Corporation at that time. In this way,
SPCC became a subsidiary of Grupo Mexico,
which keeps its shareholding through Ameri-
can Mining Company (AMC).
Acquisition of Minera Mexico, S.A. de C.V.
(“MM”) and other Corporate Changes:
SCC shareholders, in a shareholder extraor-
dinary meeting dated March 28, 2005, ap-
ANNUAL REPORT ’06
39
proved the issuance of Common Shares and required actions related to the acquisition of MM,
a company incorporated pursuant to the Laws of the Republic of Mexico. This transaction was
approved by more than 90% of the stock outstanding and circulating capital of SCC. To acquire
MM, SCC issued 67,207,640 shares in exchange for MM shares. Once the shares related to the
acquisition were issued, Americas Mining Corporation increased its share in SCC from 54.2%
to approximately 75.1%.
Change in the Certificate of Incorporation:
On March 28, 2005, following the Board of Director’s recommendations, SCC shareholders ap-
proved in an extraordinary meeting the amendments to the Deed of Incorporation, changing the
composition and obligations of some Board committees.
Special Independent Director:
The changes to the Certificate of Incorporation require the Board to include a certain number of
special independent directors. A special independent director is a person who (i) complies with
the independence standards of the new York Stock Exchange (or any other stock exchange or
association in which Common Shares are listed) and (ii) is appointed by the Special Appointment
Committee of the Board. A special independent director may only be removed from the Board
upon a justified cause.
The number of special independent directors in the Board at any time shall equal (a) the total
number of directors in the Board multiplied by (b) the percentage of Common Shares all the
shareholders (that are not Grupo Mexico and its affiliates) have, rounding up to the nearest
whole number. notwithstanding the abovementioned, the total number of people appointed as
special independent directors (not belonging to Grupo Mexico) cannot be less than two or more
than six.
Special Appointment Committee:
To appoint persons as candidates for the election of special independent directors and to cover
special independent directors vacancies, the amendment requires the Company to appoint a
Special Appointment Committee. The Special Appointment Committee must be made up by three
SCC directors, two (2) of which are currently Mr. Luis Miguel Palomino and Mr. Carlos Ruiz Sacris-
tan (each one an “Initial Director” and, together with their successors, the “Special Appointees”)
and any other director, who was initially Mr. Oscar Gonzalez Rocha and is now Mr.Xavier Garcia
de Quevedo Topete, as appointed by the Board or (the “Person Appointed by the Board”). The
Person Appointed by the Board will be annually selected by the Board. The Special Appointees will
be annually selected by the members of the Board who are special independent directors or Initial
Directors. Only the special independent directors can cover vacancies in the Special Appointment
Committee. Any member of the Special Appointment Committee can be removed at any time by
the Board with justified cause. The unanimous vote of all the members in the Special Appoint-
ment Committee will be necessary to adopt any agreement or to take any action.
notwithstanding the abovementioned, the power of the Special Appointment Committee to
name special independent directors is subject to the shareholders right to appoint pursuant to
the by-laws.
The amendment provisions referring to the special independent directors may be modified only
with the favorable vote of a majority most of the Common Shareholders (calculated without ap-
Toquepala - LSXEW cathodes ready for shipment
Peru
40
SOUTHERN COPPER CORPORATION
plying qualified majority voting right) that are
not Grupo Mexico and its affiliates.
Transactions with affiliates:
Amendments to the Certificate also prohibit
the Company to engage in material transac-
tions with affiliates, except if the transaction
has been reviewed by a committee of at least
three Board members, each one of which will
comply with the new York Stock Exchange
(or any other stock exchange or association
in which Common Shares are listed) inde-
pendence regulations. A material transaction
of the affiliate is defined as a material trans-
action, commercial negotiation or financial
share in any transaction, any series of trans-
actions between Grupo Mexico or one of its
affiliates (different from the Company or any
of the subsidiaries), on the one hand, and to
the Company or one of the subsidiaries, on the
other hand, comprising a total consideration
of more than $10,000,000.00.
The Company submitted the Amendment of
its Articles of Incorporation Deed to the Sec-
retary of State in the State of Delaware, and
it came into effect as from March 31, 2005 at
11:59 P.M.
Change of Corporate Name and other Corpo-
rate Changes:
On September 20, 2005, by written consent
instead of an extraordinary shareholder meet-
ing, the majority shareholder approved the
corporate name change of Southern Peru
Copper Corporation to Southern Copper Cor-
poration or SCC. The change was adopted be-
cause the new corporate name reflects more
precisely the Company’s operations outside
the Republic of Peru after its acquisition by
Minera Mexico and the latter’s presence in the
Republic of Chile through the acquisition of
some mining exploration concessions.
Additionally, on the same date, the majority
shareholder approved an amendment of our
Certificate of Incorporation to remove extra-
neous provisions in our Certificate related to
our Class A Common Shares that were for-
merly in circulation, which were converted
to Common Shares on May 19, 2005, and to
change the number of Corporate directors
from fifteen to a number that will be estab-
lished from time to time following agreement
of a majority of Board members, provided the
number of directors will not be less than six or
more than fifteen.
The amendment was submitted to the Sec-
retary of State of the State of Delaware, and
came into effect on October 11, 2005.
Peru Branch Name:
Generally, the change of the headquarters
corporate name should comprise the corre-
sponding name of the ancillary organizations
linked to it, as is the case of the Peru Branch
through which the Corporation develops its
mining activities in Peru.
After consulting with Peruvian lawyers, the
Board of Directors, taking into consideration
the net worth and assets importance of the
Branch, the need to continue acknowledg-
ing the position of the Peruvian Branch with
its local and international copper clients, the
need to preserve its proceeds and its position
and good name in the copper market, and
the need to prevent any possible client loss,
as well as to guarantee the revenue flow from
sales, its financial and economic revenues and
its solvency, the Board of Directors agreed to
maintain the original corporate name of the
Peru Branch, that is, Southern Peru Copper
Corporation, Peru Branch, or the abbreviated
name “Southern Peru” and/or the acronym
SPCC.
Changes in the Certificate of Articles of Incor-
poration and Bylaws:
On January 26, 2006, the Board approved
amendment to Southern Copper Corporation’s
bylaws (i) aiming at removing the provisions
related to the Class A Common Shares.(ii)
adding a new provision for advance notice to
shareholders seeking to nominate directors or
to propose other business at annual or spe-
cial meetings of the Common Stockholders (as
applicable) (iii) substitute Grupo Mexico for
ASARCO Incorporated in the “Change in con-
trol” definition in the Corporation’s by-laws
and (iv) eliminate the 80% supermajority vote
requirement for certain corporate actions.
The modification of the Modified Certificate of
Incorporation increased the capital stock from
167,207,640 shares to 320,000,000 shares.
These modifications were submitted for ap-
proval of the shareholders at the shareholders
annual meeting held on April 27, 2006 which
was adjourned and reconvened for May 4,
2006, and later on adjourned and reconvened
for May 11, 2006.
At the annual meeting, on April 27, 2006, the
proposal to amend the by-laws to eliminate
certain extraneous provisions relating to the
retired series of Class A Common Stock had
an affirmative vote of 79.85% of the required
votes. Because the required vote for the ap-
proval of this proposal was 80% and because
there were still votes that needed to be tabu-
lated, the annual meeting for this proposal
was adjourned until May 4, 2006. On May 4,
2006, at the adjourned and reconvened meet-
ing the stockholders approved the proposal
with an affirmative vote of 80.61% of the re-
quired votes.
On April 27, 2006, stockholders approved (i)
the amendment to the by-laws to introduce
a new provision for advance notice to share-
holders seeking to nominate directors or to
propose other business at annual or special
meetings of the Common Stockholders (as
applicable); (ii) the amendment to the by-
laws to substitute Grupo Mexico for ASARCO
Incorporated in the “Change in control” defi-
nition in the Corporation’s by-laws; (iii) the
amendments to the Amended and Restated
Certificate of Incorporation to increase the
number of shares of Common Stock, which
the Corporation is authorized to issue from
167,207,640 shares to 320,000,000 shares;
ANNUAL REPORT ’06
41
and (iv) the selection of the independent ac-
countants.
On April 27, 2006, the proposal to amend the
by-laws to eliminate the 80% supermajority
vote requirement for certain corporate actions
had received preliminary votes, representing
an affirmative vote of 78.35% of the required
votes. Because the required vote for the ap-
proval of this proposal was 80% and because
there were still votes that needed to be tabu-
lated, the annual meeting for this proposal
was adjourned first until May 4, 2006, and
subsequently until May 11, 2006. On May 11,
2006, at the adjourned and reconvened meet-
ing stockholders did not approve the proposal
having received an affirmative vote of 79.61%
of the required votes.
SCC is indirectly, part of Grupo Mexico S.A.B.
de C.V. which owns 100% of Americas Min-
ing Corporation (AMC) shareholding, owner of
75.1% of SCC shares.
Information about plans and investment
policies
See Expansion and Modernization Program on page
10.
Issuer and the
Relationship between the
Government
On november 20th, 1996, SCC and the Pe-
ruvian Government (Ministry of Energy and
Mines) signed a contract that will remain ef-
fective until the year 2010 and guarantees the
tax stability and the availability of exchange
to foreign currency of the Branch’s earnings
related to the operation of the SX/EW plant at
Toquepala and the Solvent Extraction (SX) op-
eration in Cuajone. Also, on April 18th, 1995,
SCC and the Peruvian Government (COnITE)
signed a contract that guarantees the avail-
ability of foreign currencies, free remittance
of dividends to the exterior, among other
guarantees related to the acid plant of the Ilo
Smelter.
SCC obtains revenues for tax credits in Peru
for the general sales tax (IGV) paid in connec-
tion with the acquisition of capital goods and
other goods and services used in its operations,
counting these credits as a paid expense in ad-
vance. By virtue of this refund, SCC is entitled
to credit the amount of the IGV against its Pe-
ruvian tax obligations or to receive a refund.
MINING SafEty:
mexicanS operationS
On February 19, 2006, a gas explosion took
place at the Pasta de Conchos coal mine, a
subsidiary of Industrial Minera Mexico, in the
San Juan Sabinas municipality in the state of
Coahuila. Regrettably, the explosion caused
the death of 65 miners. The Company reiter-
ates its commitment to continue its support
for the families of the dead miners.
peruvian operationS
In 2006, the open pit operations at the mines
of Toquepala and Cuajone, as well as opera-
tions at the Ilo metallurgical complex that in-
cludes our smelter and refinery, performed
as expected, and maintained good statistical
results of safety, very similar to the previous
year.
GENErIC DESCrIPtIoN of MaIN aSSEtS
mexican operationS
CaNaNEa
1. The Cananea production unit has 46 min-
ing concession titles with a total area of
13,282 hectares.
2. The Cananea concentrator plant, with a
milling capacity of 76,700 tons per day,
consists of 2 primary crushers, 4 second-
ary crushers, 10 tertiary crushers, 10 pri-
mary mills, distributed control system, 5
mills for re-grainding, 103 primary flota-
tion cells, 10 column cells, 70 exhaustion
flotation cells, 7 thickener, 1 drum filter
and, 3 ceramic filters.
3. There are 45 trucks for ore hauling with
individual capacities that go from 240 to
360 tons.
4. For ore loading there are 9 shovels with
individual capacities that go from 39 to
70 cubic yards.
5. The mine auxiliary equipment has 8 drill-
ers, 5 front loaders, 5 motor graders and
25 tractors.
6. In the Solvents Extraction and Electro-
winning (SX/EW) I and II plants of Cana-
nea, breaker system no.1 with a capacity
42
SOUTHERN COPPER CORPORATION
of 32,000 tons per day and a 120” plate
feeder, a 54” x 79” breaker, belt feeder, a 7
conveyor belt system and a distributor car.
system no.2 with a capacity of 48,000 tons
per day and a 60”x89” breaker, a 78” belt
feeder, 3 conveyor belt systems and dis-
tributing car. There are 4 irrigation systems
for the dumps, and 6 dams for Pregnant
Leach Solution (PLS). Plant I has 3 solvent
extraction tanks with a nominal capacity
of 960 m3/hr of PLS, and 52 electrowin-
ning cells. Plant I has a daily production
capacity of 30 tons of copper cathodes
with 99.999% purity. Plant II has 5 trains
of solvent extraction with a nominal ca-
pacity of 3,300 m3/hr of PLS and 216 cells
distributed in two bays. Plant II has a daily
production capacity of 120 tons of copper
cathodes with 99.999% purity.
la CarIDaD
1. La Caridad production unit has 71 min-
ing concession titles with a total area of
112,369 hectares.
2. La Caridad concentrator plant with a
milling capacity of 90,000 tons per day
consists of 2 primary crushers, 6 second-
ary crushers, 12 tertiary crushers, 12 ball
mills, a master milling control system,
140 primary flotation cells, 4 re-milling
mills, 96 flushing flotation cells, 6 thick-
ener and 6 drum filters.
3. There are 32 trucks for ore hauling with
individual capacity that go from 17 to 40
cubic yards.
4. For salvage ore and ore loading there are
8 Shovels with individual capacities that
go from 22 to 52 tons.
5. As for mine ancillary equipment there are
8 drillers, 2 front loaders, 4 motor grader
and 21 tractors.
6. La Caridad Solvent Extraction and Elec-
trowinning (SX/EW) plant has 9 irrigation
systems for the dumps and 2 dams of PLS
– pregnant rich solution, a pile of heads
that permits to combine the solutions
of both dam and feed the solvent ex-
traction plant with a more homogenous
concentration. The plant has 3 trains of
solvent extraction with a nominal capac-
ity of 2,070 m3/h, and 94 electrowinning
cells distributed in one single electrolytic
bay. The plant has a daily production ca-
pacity of 62 copper cathodes tons with
99.999% purity.
7. Lime plant, located in the Aguaprieta city
in the State of Sonora, with a production
capacity of 132,000 tons per year.
la CarIDaD MEtallurGIC CoMPlEX
1. La Caridad copper smelter work plant,
with a fusion capacity of 1,000,000 tons
of concentrate per year, it has a flash
type concentrates drier, a steam drier , an
outokumpu flash kiln, and “El Teniente”
modified converted kiln, 2 electric kilns
for the cleaning of slag, 3 peirce smith
type converters, 3 raffinate kilns and 2
molding systems.
2. La Caridad copper refinery working plant,
is an electrolytic plant with a produc-
tion capacity of 300,000 annual tons of
copper cathodes with 99.999% percent
of purity. It has an anode preparation
machine, an electrolytic cell house with
1,115 cells and 32 releaser cells, 2 cathode
stripping machines, and a worn anode
flushing machine.
3. La Caridad precious metal refinery work
plant has a hydrometallurgic stage and
a pyrometallurgic stage, besides a steam
drier, Dore molding system, Kaldo kiln, 20
electrolytic cells in silver refinery, induc-
tion kiln for silver, silver ingot molding
system, and 2 reactors for obtaining fine
gold.
4. La Caridad wire rod transformation plant
has a production capacity of 150,000
annual tons of copper wire rod, an it
consists in an ASARCO vertical furnace,
retention furnace, a molding machine, a
laminating machine, a coiling machine
and a coil compacter.
5. Two sulfuric acid plants, the first with an
annual capacity of 2,625 tons sulfuric
acid production at 100%, and the second
one with a 2,135 tons sulfuric acid pro-
duction capacity at 100% .
6. Three oxygen plants, two with a capac-
ity of 200,000 tons per year and the third
one with a capacity of 100,000 tons per
year.
ANNUAL REPORT ’06
43
7. Two power turbogenerators that profit
from the kiln residual heat, the first with
an 11.5 Mw capacity and the second with
a 25 Mw capacity.
3. The Charcas unit works with 9 Jumbo types drilling equipments, 16 Scoop tram type equip-
ments for mucking and loading, 5 trucks and 4 locomotive for ore internal haulage and 3
winches. for treating the ore, there are 2 primary breakers, one secondary, one tertiary, 4
mills and 3 flotation circuits. the unit’s concentrator plant has a milling capacity of 4,100
daily ore tons.
uNDErGrouND MINES (IMMSa)
1. The Underground Mines (IMMSA) produc-
tion unit consists of 6 mining economic
units: Santa Barbara, Santa Eulalia, San
Martin, Charcas, Taxco and Pasta de Con-
chos. In total, the Underground Mines
(IMMSA) production unit has 367 min-
ing concession titles with a total area of
77,633 hectares.
2. The Santa Barbara mining unit has 13
jumbo drilling equipments, and 2 Simba
drilling equipments, 34 Scoop Tram types
equipment for mucking and loading, 9
trucks and 6 locomotives for ore internal
haulage, 5 907 tons trucks for external
haulage and 7 winches. for treating the
ore, there are 4 primary jaw crushers, one
secondary and 2 tertiary, 3 mills and 3
flotation circuits. the unit’s concentrator
plant has a milling capacity of 6,000 tons
of ore per day.
4. In the San Martin mining unit, there are 9 Jumbo type drilling equipments, and one Simba
type drilling equipment, 14 Scoop Tram type equipments for mucking and loading, 13
trucks for ore internal haulage and 3 malacates. for treating the ore, there are 3 primary
jaw crushers, 1 secondary and 2 tertiary, 2 mills and 3 flotation circuits. the unit’s con-
centrator plant has a milling capacity of 4,400 tons of ore per day.
5. The Taxco Unit has 5 jumbo type drilling equipments, 12 scoop tram type equipment for
mucking and loading, 6 trucks and 4 locomotives for ore internal haulage and 3 winches.
For treating the ore, there are 2 primary breakers, 3 secondary, 3 mills and 2 flotation cir-
cuits. The unit’s concentrator plant has a milling capacity of 2,000 tons of ore per day.
6. In the Santa Eulalia unit, there are 5 jumbo type drilling equipment, 9 scoop tram type
equipment for mucking and loading, 2 trucks and, 4 winches, 2 primary breakers, 2 mill
breakers, 1 mill and 2 flotation circuits. the unit’s concentrator plant has a milling capac-
ity of 1,450 tons of ore per day.
7. In the Pasta de Conchos mining unit within the mine there are 5 continuous miners, 6
transporting cars, 2 locomotives, 1 long front equipment and a cutting machine. there is
also a winch to transport materials inside the unit. there is a breaker on surface to feed
the flushing plant. there is a set of 21 kilns for coking, with a capacity of 100,000 coke
tons per year. There is a byproduct plant to clean the coke gas in which tar, ammonium
sulfate and light crude oil are recovered. There are also two boilers to produce 80,000
steam pounds that are used in the byproducts plant.
8. The electrolytic zinc refinery carries out its activities with a roaster with a capacity of 85
m2 of roasting area, a steam recovery boiler and acid plant. There is a calcines process-
ing area with 5 leaching stages: neutral, hot acid, intermediate acid, acid, purified fourth
and jarosite, as well as two stages for solution purifying. There is a cell house, with two
electrowinning circuits, to finally obtain metallic zinc. There is an alloy and molding area
with 2 induction furnaces and four molding systems, two of them with chains to produce
25 kilograms ingots and two casting wheels to manufacture one ton jumbo pieces. This
refinery has a production capacity of 104,000 tons of refined zinc per year.
9. San Luis Potosi copper smelter works with 2 yard locomotives, 2 traxcavos, 30 dump
cars, and 6 mechanic front loaders. for smelting and conversion it has 3 bucket kilns, 2
converter kilns, 2 molding kilns, 6 electric front loaders, 6 towing units, 3 narrow way
locomotives, 2 bridge cranes, 2 7-tons cranes and 3 hoists. For the venting system it
has 9 fans with different capacities and 2 filtering bag houses. This plant has a smelting
capacity of 24,000 tons of blister copper per year.
44
SOUTHERN COPPER CORPORATION
3. 6 trucks KOMATSU 930E each one with a
capacity of 290 tm, 20 trucks DRESSER
830E each one with a capacity of 218 ton
and 8 trucks CAT 793C trucks each one
with a capacity of 231 ton.
4. 2 P&h 4100A shovels with a capacity
of 73 tons (42.8 m3), 1 BUCYRUS elec-
tric shovels 495BII with a capacity of 73
tons (42.8 m3), 1 P&h 2800XPB shovel
with a capacity of 54 tons, 1 P&h 2100BL
shovel with a capacity of 23 ton (11.4 m3),
1 front-end loader LE TOURnEAU 1800, 2
electric drills P&h 120A, 1 P&h 100XP
electric drill, 1 BUCYRUS 49R electric drill,
6 front end loaders CAT 966 of 3.8 m3 of
capacity, 1 front end loaders CAT 950 of
3.1 m3 of capacity, 2 front end loaders
CAT 988 of 6.1 m3 of capacity, 4 wheel
tractor CAT-824, 1 wheel tractor CAT-834,
1 wheel tractor CAT 844, 1 wheel tractor
KOMATSU WD600, 7 dozers CAT-D10, 1
dozer CAT-D9, 3 motograders CAT-16h, 1
motograders CAT-24h.
othErS
One SX/EW plant in Toquepala and one SX
plant in Cuajone.
peruvian operationS
toQuEPala
1. The Toquepala production unit comprises three Economic Administrative Units: TOQUE-
PALA 1 comprising 24 mining claims over a 6,012 hectare surface. SIMARROnA including
14 mining claims over 5,516 hectares, and TOTORAL with 21 mining claims distributed over
4,926 hectares. In addition, the Toquepala production unit owns 41 mining claims over
26,245 hectares outside the above economic administrative units.
Overall the Toquepala production unit holds 100 mining claims over 42,699 hectares.
2. Toquepala concentrator beneficiation plant, with milling capacity of 60,000 tons per day,
consists of 1 primary crusher, 3 secondary crushers, 6 tertiary crushers, 8 bar mills, 24
ball mills, 8 ball mills for re-crushing, 1 ball mills 9500 hp, 1 distribute control system
(dcs), 1 optimizing control system (ocs), as well as, 6 WEMCO-130 flotation cells, 4 ok-100
flotation cells, 3 ok-50 flotation cells, 5 WEMCO-60 flotation cells, 15 column cells and 24
WEMCO 42.5m3 flotation cells, 72 AGITAIR 1.13 m3 cells, 2 LAROX filter presses (pf60 &
pf96), 5 middling thickeners, 2 tailings thickeners, 3 high-rate tailings, 1 “tripper car”, 1
track tractor CAT D10-R and a recycled water pipe line. in the molybdenum plant, equip-
ments are as follow: 35 InERTGAS MOD. 66-D, EInCO (100 p3), 42 cells AGITAIR de 1.13
m3, 4 column cells y 1 LAROX filter presses (PF6).
3. 13 trucks KOMATSU 930E, each one with a capacity of 290 tm, 5 trucks CAT 793C each one
with a capacity of 231 tm, 18 trucks KOMATSU 830E each one with a capacity of 218 tm,
6 trucks TITAn 2200 each one with a capacity of 181 tm.
4. 3 P&h 4100A shovels with a capacity of 73 tm (42.8 m3), 1 P&h 4100A shovels with a
capacity of 78 tm (45.9 m3), 3 P&h 2100BL shovels with a capacity of 20 tons (11.5 m3),
1 BUCYRUS 495BI shovel with a capacity of 73 tons (42.8 m3), 1 P&h 120A electric drill, 2
P&h 100XP electric drills, 2 BUCYRUS 49RIII rotary drill. 1 LE TOURnEAU 1400 front-end
loader of 37 tm (21.4 m3) capacity.
CuajoNE
1. The Cuajone production unit comprises two Economic Administrative Units: CUAJOnE 1,
comprising 22 mining claims over 7,249 hectares; and COCOTEA with 17 mining claims
over 7,080 hectares. Additionally the Cuajone production unit with 21 mining claims over
8,834 hectares outside the above two economic administrative units. Overall, the Cuajone
production unit comprises 60 mining claims over a total 23,163 hectare surface.
2. Cuajone concentrator beneficiation plant with milling capacity of 87,000 tons per day,
consisting of 1 primary crushers, 3 secondary crushers, 7 tertiary crushers, 10 primary ball
mills, 4 ball mills for re-crushing, 1 vertical mill, as well as 4 flotation cells OK-160, 30 OK-
100 flotation cells, 8 column cells, 28 WEMCO flotation cells, 48 DEnVER flotation cells, 1
LAROX filter press pf96, 2 middling thickeners, 3 tailings thickeners, 1 high-rate tailings,
1 truck VOLVO FM12, recycled water pipe line.
ANNUAL REPORT ’06
45
The SX Cuajone Plant has 1 primary jaw
crusher and 1 secondary cone crusher
hP-500 (390 tm/h), to process Cuajone’s
oxides. In addition, 1 agglomeration mill,
2 front end loaders, 3 trucks each with a
capacity of 109 tons for agglomerated ore
hauling to the leach dumps. Copper in solu-
tion produces in Cuajone is sent to Toque-
pala through an 8” pipe laid alongside the Cuajone - Toquepala railroad track.
The Toquepala plant has 2 spray systems, 1 for the south dump and 1 for the northwest
dump, 4 pregnant solution ponds, each with its own pumping system to send the solution to
the SX/EW Plant. The plant has 3 lines of SX, each with a nominal capacity of 1,068 m3 / h
of pregnant solution an 162 electrowinning cells arranged in two lines, one with 122 cell and
the other with 40. Electrowon (EW) has four (4) rectifiers with a capacity of 23,000 Amps
each one, those rectifiers give enough current to transform ionic copper from the electrolyte
to placed solid copper.
Ilo MEtallurGIC CoMPlEX
1 Ilo Smelter with a smelting capacity of 1,120,000 tons of concentrate per year, has two
reverberatory furnaces, 7 Peirce-Smith converters, 1 “El Teniente” modified converter and
2 casting wheels.
2 Ilo refinery – anode plant: 2 basculant Maerz ovens each with a 400 MT capacity, 1 cast-
ing wheel (70 MT / hour) – electrolitic plant: with a 280,000 mt / year capacity (cathodes),
926 commercial cells and 52 starting cells. – Precious metals plant: with 1 Wenmec sele-
nium reactor, 2 cupel furnace, 22 silver refining cells and 1 hydrometallurgical system for
gold recovery.
3 Sulfuric acid plant with production capacity of 300,000 tons per year. (average 1,000 x day).
4 Oxygen plant with a production capacity of 100,000 tons per year (average 272 x day).
5 Coquina plant with a production capacity of 200,000 tons per year of seashells.
6 Burnt Lime plant with a capacity of 80,000 tons per year.
othErS
Industrial railroad to haul concentrates and supplies between Toquepala, Cuajone and Ilo
with 30 locomotives, 264 dump cars, 91 flat cars, 254 boxcars, 8 closed boxcars, 11 closed
hopper-type cars, 34 open hopper-type cars, 36 various tank wagons, 24 sulfuric acid tanks
and 5 patrol cars.
46
SOUTHERN COPPER CORPORATION
EMPloyEES:
MEXICAn OPERATIOnS
At December 31
2006
2005
2004
2003
2002
Employees
Workers
Total
2,146
6,444
8,590
2,264
7,049
9,313
2,255
6,985
9,240
2,328
6,819
9,147
2,353
6,786
9,139
PERUVIAn OPERATIOnS
At December 31
2006
2005
2004
2003
2002
Staff
Employees
Workers
Total
764
1,075
1,715
3,554
756
1,079
1,730
3,565
723
1,081
1,740
3,544
726
1,089
1,751
3,566
724
1,075
1,776
3,575
ChILEAn OPERATIOnS
At December 31
2006
2005
2004
2003
2002
Total
10
10
10
0
0
TOTAL EMPLOYEES In SCC:
At December 31
2006
2005
2004
2003
2002
Total Mexico
Total Peru
Total Chile
Total
8,654
3,554
10
12,218
9,313
3,565
10
12,888
9,240
3,544
10
12,794
9,147
3,566
0
12,713
9,139
3,575
0
12,714
ANNUAL REPORT ’06
47
PrINCIPlES of CorPoratE GoVErNaNCE
i. GeneraL manaGement
reSoLutionS conaSev
nº 096-2003-ef/94.11 y
nº 140-2005-ef/94.11
The information referred to both resolutions will be submitted to the national Commission
for Corporate and Securities Supervision (COnASEV) of the Republic of Peru, together with
the Annual Report.
Economic Relations with Other Companies Due to Loans that Commit More than 10% of the
Stockholder’s Equity of the Issuing Entity.
To date, there are no loans with other companies that compromise more than 10% of SPCC’s
property.
aDMINIStratIVE juDICIal or arbItratIoN ProCESSES
Litigation: See note to Consolidated Financial Statements.
ChaNGES of thoSE rESPoNSIblE for thE PrEParatIoN aND rEVISIoN of thE
fINaNCIal INforMatIoN
Jose n. Chirinos acts as Director of Comptroller and Finance and Marco A. Garcia acts as
Finance Manager.
INforMatIoN rElatED to thE StoCk traDED oN thE PublIC StoCk MarkEt
common Stock
On november 29, 1995 the Company offered to exchange the recently issued common shares
for all and any labor shares of the Peruvian Branch of the Company, at a ratio of one com-
mon share per four S-1 shares and one common share per five S-2 shares. The exchange
expired on December 29, 1995, with 80.8% of the total labor shares outstanding exchanged
for 22,959,334 common shares. These common shares are quoted on the new York Stock
Exchange and the Lima Stock Exchange and are entitled to one vote per share.
Along with the exchange of labor shares the holders of common shares of the Company ex-
changed their shares for class A common shares, with the right to five votes per share.
In connection with the Minera Mexico acquisition (April 1, 2005), 134,415,280 new common
shares were issued and class A common shares of the company were converted to common
shares, and preferential votes were eliminated. On June 9, 2005, Cerro Trading Company, Inc.,
SPC Investors L.L.C., Phelps Dodge Overseas Capital Corporation and Climax Molybdenum B.V.,
subsidiaries of two of SCC’s founding shareholders and affiliates, sold their share in SCC.
On August 30, 2006 the Executive Committee of the Board of Directors declared a two-
for-one split of the Company’s outstanding common stock. On October 2, 2006 common
Cuajone mine - Drilling operations - Peru
48
SOUTHERN COPPER CORPORATION
shareholders of record at the close of busi-
ness on September 15, 2006, received one
additional share of common stock for every
share owned. The Company’s common stock
began trading at its post-split price on Oc-
tober 3, 2006. The split increased the num-
ber of shares outstanding to 294,460,850
from 147,230,425. All share and per share
amounts have been retroactively adjusted
to reflect the stock split.
Consequently, as from December 31, 2006,
294,461,250 common shares of the Com-
pany were under circulation with a nominal
value of $0.01 per share.
corporate bondS
On May 9, 2006, SCC issued $400 million
7.5% notes due 2035. On July 27, 2005, SCC
issued $200 million 6,375% notes due 2015
and $600 million 7,5% notes due 2035. The
notes are senior unsecured obligations of
the Company. The net proceeds from the
issuance and sale of the notes were used
to repay outstanding indebtedness of our
Peruvian and Mexican operations, under its
$200 million and $600 million ($480 million
outstanding) credit facilities, respectively,
and the balance will be used for general
corporate purposes. SCC filed a Registra-
tion Statement on Form S-4 with respect to
these notes on October 28, 2005.
On Janu-ary 3, 2006 the Company com-
pleted an exchange offer for $200 million,
6.375% notes due 2015 and $600 million,
7.5% notes due 2035. In the exchange of-
fer, $197.4 million of the 6.375% old notes
due 2015 were tendered in exchange for an
equivalent amount of new notes and an ag-
gregate of $590.5 million of the 7.5% old
notes due 2035 were tendered in exchange
for an equivalent amount of new notes. The
new notes have been registered under the
U.S. securities law. The indentures relat-
ing to the notes contain certain covenants,
including limitations on liens, limitations
on sale and leaseback transactions, rights
of the holders of the notes upon the oc-
currence of a change of control triggering
event, limitations on subsidiary indebted-
limitations on consolidations,
ness and
mergers, sales or conveyances. All of these
limitations and restrictions are subject to a
number of significant exceptions, and some
of these covenants will cease to be appli-
cable before the notes mature if the notes
attain an investment grade rating. At De-
cember 31, 2005, we are in compliance with
these covenants.
In January 2005, the Company signed a
$200 million credit facility with a group of
banks led by Citibank, n.A. Proceeds of this
credit facility were used to prepay $199 mil-
lion the outstanding bonds of the Compa-
ny’s Pe-ruvian bond program. On July 28,
2005, a portion of the proceeds from the
financing, noted above, were used to repay
this facility.
In 1998, Minera Mexico issued $500 million
of unsecured debt, which we refer to as its
Yankee bonds. The Yankee bonds were of-
fered in two series: Series A for $375 mil-
lion, with an interest rate of 8.25% and a
2008 maturity date, and Series B for $125
million, with an interest rate of 9.25% and a
2028 maturity date. During 2006 and 2005,
the Company repurchased $23.3 million
and $143.0 million of the Series A bonds,
respectively. 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 bonds. At December 31, 2005, Minera
Mexico is in compliance with this covenant.
In 1999, the Company established a $100
million credit facility with Mitsui & Co. The
facility has a 15-year term with an interest
rate of Japanese LIBO plus 1.25% (Japanese
LIBO for this loan was 5.35% at December
31, 2006). The facility is collateralized by
the assignment of copper sales receivables
of 31,000 tons of copper per year and re-
quires an escrow account to fund sched-
uled payments. The facility requires that we
maintain a minimum stockholders’ equity of
$750 million and a ratio of debt to equity no
greater than 0.5 to 1.0, all as such terms are
defined by the facility. Reduction of Grupo
Mexico’s direct or indirect voting interest in
our Company to less than a majority would
constitute an event of default under the fa-
cility. At December 31, 2006, we are in com-
pliance with these covenants.
On October 29, 2004, Minera Mexico bor-
rowed $600 million pursuant to a facility
with a final maturity date in 2009. The credit
facility bore interest at LIBOR plus 200 basis
points. The proceeds from the credit facility
were used to repay in full the amounts out-
standing under a common agreement with
holders of Minera Mexico’s secured export
notes and other financial institutions. The
loan was secured by a pledge of Minera
Mexico’s principal properties and was guar-
anteed by its principal subsidiaries. In 2005,
the Company prepaid the total amount of
this financing, using in part pro-ceeds from
the July 27, 2005 note issuance.
While we recently prepaid all amounts out-
standing under our Peruvian bond program,
we are authorized by Peru’s Comision na-
cional Supervisora de Empresas y Valores
(COnASEV) to issue additional bonds.
We expect that we will meet our cash re-
quirements for 2007 and beyond from in-
ternally generated funds, cash on hand
and from additional external financing if
required.
ANNUAL REPORT ’06
49
members of the board of directors
at december 31, 2006
GErMaN l arrEa Mota-V El aSCo
Director. Mr. Larrea has been Chairman of
the Board since December 1999. he has been
Chairman of the Board of Directors, Presi-
dent and Chief Executive Officer of Grupo
Mexico S. A. B. de C. V. (holding) since 1994.
Mr. Larrea has been Chairman of the Board
of Directors and Chief Executive Officer of
Grupo Ferroviario Mexicano (railroad divi-
sion) since 1997. Mr. Larrea was previously
Executive Vice Chairman of Grupo Mexico S.
A. B. de C. V., and has been member of the
Board of Directors since 1981. Perforadora
Mexico (drilling company), Mexico Compa_ia
Constructora (construction company), Fon-
do Inmobiliario (real estate company), since
1992. he founded Grupo Impresa, a printing
and publishing company in 1978, remaining
as the Chairman and Chief Executive Officer
until 1989 when the company was sold. he is
also a director of Grupo Financiero Banamex,
(Citigroup) S.A. de C.V., Banco nacional de
Mexico, S.A., Consejo Mexicano de hombres
de negocios, and Grupo Televisa, S.A. de C.V.
oSCar GoNzalEz roCha
Director. Mr. Oscar Gonzalez Rocha has been
our Chief Executive Officer since October
21, 2004 and its President since December
1999. he has been a director of the Company
since november 1999. Previously, he was our
General Director and Chief Operating Officer
from December 1999 to October 20, 2004.
Mr. Gonzalez has been a director of Grupo
Mexico S. A. B. de C. V. from 2002 to pres-
ent and Managing Director of Mexicana de
Cobre, S.A. de C.V. from 1986 to 1999 and of
Mexicana de Cananea, S.A. de C.V. from 1990
to 1999. he has been an alternate director of
Grupo Mexico S. A. B. de C. V. from 1988 to
April 2002.
EMIlIo CarrIllo GaMboa
Director. Mr. Emilio Carrillo Gamboa has
been a director of the Company since May
30, 2003 and is our fifth independent di-
rector nominee. Mr. Carrillo Gamboa is a
prominent lawyer in Mexico and has been
a partner of the law firm Bufete Carrillo
Gamboa, S. C., a law firm specializing in
corporate, financial, commercial, and public
utility issues, for the last five years. Mr. Car-
rillo Gamboa has extensive business experi-
ence and currently serves on the boards of
many prestigious international and Mexican
corporations as well as charitable organiza-
tions. Since March 9, 2005 he is Chairman of
the Board of the Mexico Fund, Inc. (nYSE—
msxf), a nondiversified closed-end man-
agement investment company. he is also
Chairman of the Board of holcim-Apasco,
S.A. de C.V. (cement company). Mr. Carrillo
was Director General of Telefonos de Mexico
S.A. de C.V. (“TELMEX”) and from July 1987
to February 1989, he was Mexico’s Ambas-
sador to Canada. Mr. Carrillo is a director
of the following companies: Grupo Modelo,
S.A. de C.V. (beer brewing), Kimberly-Clark
de Mexico, S.A. de C.V. (consumer products),
San Luis Corporacion, S.A. de C.V. (automo-
tive parts), Empresas ICA Sociedad Contro-
ladora, S.A. de C.V. (construction), holcim
Apasco, S.A. de C.V., The Mexico Fund, Inc.,
Bank of Tokyo—Mitsubishi (Mexico), S.A.,
Gasoductos de Chihuahua, S. de R.L. de C.V.
and subsidiaries, Grupo Posadas, S.A. de
C.V., and Grupo Mexico S. A. B. de C. V. and
subsidiaries. he is a member of the Valua-
tion, Contract Review and nominating and
Corporate Governance Committees of the
Mexico Fund and a member of the Audit
Committee of the following companies: Em-
presas ICA Sociedad Controladora, S.A. de
C.V. since 2002, holcim-Apasco S. A. de C. V.
since 2002, Grupo Modelo, S.A. de C.V. since
2002, Kimberly-Clark de Mexico, S.A. de C.V.
since 2002, San Luis Corporacion, S.A. de
C.V. since 2002, The Mexico Fund, Inc. since
2002, Grupo Mexico S. A. B. de C. V. since
2003, and Grupo Posadas since 2006. Except
50
SOUTHERN COPPER CORPORATION
for Bank of Tokyo—Mitsubishi (Mexico), S.A.,
and Gasoductos de Chihuahua, S. de R.L. de
C.V., which are private companies, the rest
are public companies listed on the Mexican
Stock Exchange, and two are listed on the
nYSE: The Mexico Fund, Inc., and Empresas
ICA Sociedad Controladora, S.A. de C.V. Mr.
Carrillo Gamboa has a law degree from the
Autonomous national University of Mexico,
attended a continuous legal education pro-
gram at Georgetown University Law School,
and practiced at the World Bank.
alf rEDo C aSar PErEz
Director. Mr. Casar Perez has been a direc-
tor since October 26, 2006. he has been a
member of the Board of Directors of Grupo
Mexico S. A. B. de C. V. since 1997. he is
also member of the Board of Directors of
Ferrocarril Mexicano, S.A. de C.V., an affili-
ated company of Grupo Mexico S. A. B. de
C. V., since 1998 and its Chief Executive Of-
ficer since 1999. From 1992 to 1999, Mr.
Casar served as Chief Executive Officer and
Member of the Board of Directors of Cia.
Perforadora Mexico and Mexico Compañia
Constructora, two affiliated companies of
Grupo Mexico S. A. B. de C. V.
Mr. Casar served as Project Director of ISEFI,
a subsidiary of Banco Internacional in 1991
and Executive Vice President of Grupo Cos-
tamex in 1985. Mr. Casar also worked for
Bufete Inmobiliario, Secretaria de Agricultura
and El Colegio de Mexico. Mr. Casar holds a
degree in Economics from the Autonomous
Technological Institute of Mexico, ITAM, and
one in Industrial Engineering from the Ana-
huac University. he also holds a Master in
Economics from the University of Chicago.
jaIME f. Coll azo GoNz alEz
Director. Mr. Collazo Gonzalez has been
a director of the Company since April 28,
2004 and our Vice President, Finance and
Chief Financial Officer from April 28, 2004
to March 10, 2005. he has been Director of
Administration, Auditing and Information
Technology of Grupo Mexico S. A. B. de C. V.
since March 2004. From 1998 to 2003, Mr.
Collazo Gonzalez held the position of Man-
aging Partner of Administration and Busi-
ness Consulting, SC (a business consulting
firm). Previously, he held several positions
with IBM de Mexico, S.A., the last one be-
ing Vice President and Chief Financial Offi-
cer, prior to his retirement in 1998. he holds
a Bachelor’s degree in Administration from
Universidad Tecnologica de Mexico and a
Master degree in Business Administration
from Instituto Tecnologico y de Estudios Su-
periores de Monterrey.
XaVIEr GarCIa DE QuEVEDo toPEtE
Director. Mr. Garcia de Quevedo has been
a director of the Company since november
1999 and our Executive Vice President and
Chief Operating Officer since April 12, 2005.
he has been the President and Chief Execu-
tive Officer of Minera Mexico, S. A. de C. V.
since September 2001 to date. he was Presi-
dent of Grupo Ferroviario Mexicano, S.A. de
C.V. and of Ferrocarril Mexicano, S.A. de C.V.
from December 1997 to December 1999, and
Managing Director of Exploration and Devel-
opment of Grupo Mexico, S. A. B. de C. V.
from 1994 to 1997. he has been a Director
of Grupo Mexico S. A. B. de C. V. since April
2002. Mr. Garcia de Quevedo is the Chairman
of the Mining Chamber of Mexico.
j. EDuarDo GoNz alEz f ElIX
Director. Mr. Eduardo Gonzalez Felix has
been a director of the Company and our Vice
President, Finance and Chief Financial Officer
since March 11, 2005. he has been the Presi-
dent and Chief Financial Officer of the Min-
ing Division of Grupo Mexico S. A. B. de C. V.
(“AMC”) from January 2004 to March 2005
and its Chief Financial Officer from 1999 to
ANNUAL REPORT ’06
51
March 2003. Mr. Gonzalez has been the Chief
Financial Officer of Minera Mexico from mid-
2001 to December 2003. he had also headed
Grupo Mexico S. A. B. de C. V.’s Treasury and
Investor Relations departments from 1999 to
2001. Prior to joining Grupo Mexico S. A. B.
de C. V., Mr. Gonzalez was a Senior Associate
at McKinsey & Company, Inc., heading work
for clients in various countries and indus-
try sectors. Mr. Gonzalez holds two degrees
from the University of Arizona in Economics
and Political Science and a Master in Busi-
ness Administration in Finance and Interna-
tional Business from the University of Chica-
go, Graduate School of Business. he has also
concluded extensive graduate studies and
research in Political Philosophy and Europe-
an Union Economics at the Oxford University
in England. Mr. Gonzalez has also worked at
the Kimberly-Clark Corporation and at the
Chicago Board of Trade.
harolD S. haNDElSMaN
Director. Mr. handelsman has been a direc-
tor of the Company since August 2002 and
is a special independent director nominee.
Mr. handelsman has been Executive Vice
President and General Counsel of The Pritz-
ker Organization, LLC, a private investment
firm, since 1998. Mr. handelsman has also
been a senior executive officer of the hyatt
Corporation since 1978 and currently serves
as Executive Vice President of Global hyatt
Corporation, and is a director of a number of
private corporations. he received a B.A. de-
gree from Amherst College in 1968 and a J.D.
degree from Columbia University in 1973.
GENaro l arrEa Mota-V El aSCo
Director. Mr. Larrea was our Vice President,
Commercial from December 1999 until April
25, 2002, and has been a director since no-
vember 1999. he was Managing Commercial
Director of Grupo Mexico S. A. B. de C. V.
from 1994 to August 30, 2001, and has been
a director of Grupo Mexico S. A. B. de C. V.
since 1994. he and Mr. German Larrea Mota-
Velasco are brothers.
arMaNDo ort EGa GoMEz
Director. Mr. Ortega has been our Vice Presi-
dent-Legal and Secretary since April 25,
2002 and a director since August 2002. he
has been our General Counsel since Octo-
ber 23, 2003. Previously, he was our Assis-
tant Secretary from July 25, 2001 to April
25, 2002. he was General Counsel of Grupo
Mexico S. A. B. de C. V. from May 2001 to
February 2007. Previously, he headed the
Unit on International Trade Practices of the
Ministry of Economy of Mexico with the rank
of Deputy Vice Minister from January 1998
to mid-May 2001, and was negotiator for
international matters for said Ministry from
1988 to May 2001.
luIS MIGuEl PaloMINo boNIll a,
Director. Mr. Luis Miguel Palomino Bonilla
has been a director of the Company since
March 19, 2004 and is a special independent
director nominee. Mr. Palomino has been
the principal and senior consultant of Pro-
consulta International (a financial consult-
ing firm) since 2003. Previously he was First
Vice President and Chief Economist, Latin
America for Merrill Lynch Pierce Fenner &
Smith, new York (investment banking) from
2000 to 2002. he was Chief Executive Of-
ficer, Senior Country and Equity Analyst of
Merrill Lynch, Peru (investment banking)
from 1995 to 2000. Mr. Palomino has held
various positions with banks and financial
institutions as an economist, financial ad-
visor and analyst. he has a PhD in finance
from the Wharton School of the University
of Pennsylvania, Philadelphia, and graduated
from the Economics Program of the Univer-
sity of the Pacific, Lima, Peru.
52
SOUTHERN COPPER CORPORATION
GIlbErto PErEzaloNSo CIfuENtES
Director. Mr. Gilberto Perezalonso Cifuentes
has been a director of the Company since
June 2002 and is a special independent di-
rector nominee. he is currently Treasurer of
the Asociacion Vamos Mexico A.C., consul-
tant to the Presidency of Grupo Televisa,
S.A. and a member of its Board and its Ex-
ecutive Committee. he was Chief Executive
Officer of Corporacion Geo S. A. de C. V.
from February 2006 to February 2007. Mr.
Perezalonso was the Chief Executive Officer
of Aeromexico (Aerovias de Mexico, S.A. de
C.V.) from 2004 until December 2005. From
1980 until February 1998, Mr. Perezalonso
held various positions with Grupo Cifra S.A.
de C.V., the most recent position being that
of General Director of Administration and
Finance. From 1998 until April 2001, he was
Executive Vice President of Administration
and Finance of Grupo Televisa, S.A. he is
also a member of the investment commit-
tee of IBM de Mexico. he is a member of
the advisory council of Banco nacional de
Mexico, S.A. de C.V., the board and of the
investment committee of Afore Banamex,
the board and of the investment committee
of Siefore Banamex no. 1, and is a member
of the Boards of Corporacion Geo S. A. de C.
V., Gigante, S.A. de C.V., International Center
for human Development, Costa Rica, Mas-
negocio Co. S. de R.L. de C.V., and Financiera
Compartamos, S.A. de C.V., SFOL. Mr. Per-
ezalonso is a member of the Audit Commit-
tee of Televisa S.A. de C.V. and Cablevision,
S.A. de C.V.
Mr. Perezalonso has a law degree from the
Iberoamerican University and a Master’s
Degree in Business Administration from the
Business Administration Graduate School
for Central America (InCAE). Mr. Pereza-
lonso has also attended the Corporate Fi-
nance program at harvard University.
juaN rEbollEDo Gout
Director. Mr. Rebolledo has been a director
of the Company since May 30, 2003. Mr. Re-
bolledo has been International Vice President
of Grupo Mexico S. A. B. de C. V. since 2001.
he was Deputy Secretary of Foreign Affairs
of Mexico from 1994 to 2000 and Deputy
Chief of Staff to the President of Mexico
from 1993 to 1994. Previously, he was Assis-
tant to the President of Mexico (1989-1993),
director of the “national Institute for the his-
torical Studies of the Mexican Revolution” of
the Secretariat of Government (1985-1988),
Dean of Graduate Studies at the national
Autonomous University of Mexico, Politi-
cal Science Department (1984-1985), and
professor of said university (1981-1983).
Mr. Rebolledo holds a law degree from the
national Autonomous University of Mexico,
an MA in philosophy from Tulane University,
and an LLM from harvard Law School.
CarloS ruIz SaCrIStaN,
Director. Mr. Carlos Ruiz Sacristan has been
a director of the Company since February 12,
2004 and is a special independent director
nominee. Since november 2001, he has been
the owner and managing partner of Proyec-
tos Estrategicos Integrales, a Mexican invest-
ment banking firm specialized in agricultural,
transport, tourism, and housing projects. Mr.
Ruiz has held various distinguished positions
in the Mexican government, the most recent
being that of Secretary of Communication
and Transportation of Mexico from 1995 to
2000. While holding that position, he was
also Chairman of the Board of Directors of
the Mexican-owned companies in the sector,
and member of the Board of Directors of de-
velopment banks. Mr. Ruiz holds a Bachelor’s
Degree in Business Administration from the
Anahuac University of Mexico City, and an
MBA degree from northwestern University
of Chicago.
ANNUAL REPORT ’06
53
EXECutIVE offICErS
German Larrea Mota-Velasco
ChAIRMAn OF ThE BOARD
NEXt of kIN
Messrs. German Larrea Mota-Velasco, Chairman of the Board of the Company and Genaro
Larrea Mota-Velasco, a Director of the Company are brothers or kindred in second degree of
consanguinity.
Oscar Gonzalez Rocha
PRESIDEnT AnD ChIEF EXECUTIVE OFFICER
Xavier Garcia de Quevedo Topete
PRESIDEnT AnD ChIEF EXECUTIVE OFFICER
Eduardo Gonzalez Felix
VICE-PRESIDEnT, FInAnCE
Armando Ortega Gomez
VICE-PRESIDEnT, LEGAL AnD SECRETARY
Mario Vinageras Barroso
VICE-PRESIDEnT, COMMERCIAL
Vidal Muhech Dip
VICE-PRESIDEnT, PROJECTS
Jose n. Chirinos Fano
COMPTROLLER
A company of which more than 50% of the voting power is held by a single entity, a “controlled
company”, need not comply with the requirements of the new York Stock Exchange (“nYSE”)
corporate governance rules requiring a majority of independent Directors and independent
compensation and nomination/corporate governance committees. SCC is a controlled com-
pany as defined by the rules of the nYSE. Grupo Mexico owns indirectly 75.1% of the stock
of the Company. The Company has taken advantage of the exceptions to comply with the
corporate governance rules of the nYSE. The Board of Directors of the Company determined
that Messrs. Luis Miguel Palomino Bonilla, Gilberto Perezalonso, and Emilio Carrillo, the three
members of the Company’s Audit Committee, are independent of management and financially
literate in accordance with the qualifications of the nYSE and the Securities and Exchange
Commission (“SEC”), as such qualifications are interpreted by the Company’s Board of Direc-
tors in its business judgment. We have four special independent directors nominated by the
Special nominating Committee, Messrs. harold S. handelsman, Luis Miguel Palomino Bonilla,
Gilberto Perezalonso Cifuentes, and Carlos Ruiz Sacristan. Mr. Emilio Carrillo Gamboa is our
fifth independent director. At its meeting on January 25, 2007, the Board of Directors deter-
mined that Messrs. harold S. handelsman, Luis Miguel Palomino Bonilla, Gilberto Perezalonso
Cifuentes, Carlos Ruiz Sacristan and Emilio Carrillo Gamboa are independent of management
in accordance with the requirements of the nYSE as such requirements are interpreted by our
Board of Directors in its business judgment.
To the best of the Company’s knowledge, no other relationship of affinity and/or consanguinity
exists among the other members of the Board, and between them and the Executive Officers
of Southern Copper Corporation.
54
SOUTHERN COPPER CORPORATION
SPECIal CoMMIttEES of thE boarD
SPCC’s Board of Directors has organized the following Special Committees:
1) Executive Committee, comprised of five members who substitute for the Board when ses-
sions or decisions are required concerning urgent matters, or which the Board would have
expressly delegated its mandate.
2) Audit Committee, comprised of three independent Board members who are knowledgeable
in accounting and financial matters. Its main purpose is to (a) assist the Board in monitoring
(i) the quality and integrity of the Company’s financial statements; (ii) the qualifications and
independence of the independent auditors;(iii) the appropriate performance of the internal
audit function; and (iv) the Company’s compliance with legal and regulatory provisions; and
(b) prepare the report for the affidavit statement.
3) Compensations Committee, comprised of four Board members; its principal objective is to
evaluate and establish the remunerations of senior officials and key employees at the Com-
pany and its subsidiaries, and eventual raises in remuneration.
4) Special Committee Nominees comprised of 2 independents Board members and, one nomi-
nated by the Board; its principal objective is to promote and evaluate people who are proposed
as Special and Independent Directors.
5) Corporate Governance Committee. Its four Board members have as their principal role to
advise the Board on its functions and needs, develop and recommend the approval of the
Company’s good governance principles, and overseeing the evaluation of the Board’s and
Management’s performance.
6) Administrative Committee Designated by the Board for (Employee Retirement Income Secu-
rity Act – ERISA - USA) Benefits Plans. The Vice-President, Finance and Chief Financial Officer
is the Board-appointed Trustee for the Company’s Benefits Plans subject to US regulations, in-
cluding ERISA. This Officer will appoint an Administrative Committee comprised of four man-
agement members whose purpose is to administrate and manage those plans and to oversee
the performance of the trust agents and others charged with investing the plans’ monies.
ANNUAL REPORT ’06
55
aDMINIStratIoN aND boarD INCoME
Total remunerations of Board and Administration members, in relation to the Company´s gross
income is 0.20%.
aNNual MEEtING
The annual meeting of stockholders of Southern Copper Corporation will be held on Thursday,
April 26, 2007 at 9:00 hours. Mexico D.F. time, at Avenue Baja California nº 200, Fifth Floor, Co-
lonia Roma Sur, Mexico City, Mexico.
CorPoratE offICES
united States
11811 north Tatum Blvd.
Suite 2500
Phoenix, Az 85028
U.S.A.
Phone. +(602) 494-5328
Fax +(602) 494-5317
peru
Avenida Caminos del Inca nro. 171
Chacarilla del Estanque
Santiago de Surco
Lima 33, Peru
Phone. +(511) 512-0440, Extension 3211
Fax +(511) 512-0486
traNSfEr aGENt, rEGIStrar aND StoCkholDEr SErVICES
The Bank of new York
101 Barclay Street
new York, nY 10286
Phone +(800) 524-4458
DIVIDEND rEINVEStMENt ProGraM
SCC stockholders can have their dividends automatically reinvested in SCC common shares. SCC
pays all administrative and brokerage fees. This plan is administered by The Bank of new York.
For more information, contact The Bank of new York at +(800) 524-4458.
StoCk EXChaNGE lIStING
The principal markets for SCC’s Common Stock are the new York Stock Exchange and the Lima
Stock Exchange. The SCC Common Stock symbol is PCU on both the nYSE and on the Lima Stock
Exchange.
56
SOUTHERN COPPER CORPORATION
othErS
The Branch in Peru has issued, in accordance with Peruvian law, ‘investment shares’ (formerly
named labor shares) that are quoted in the Lima Stock Exchange under the symbol S-1 and S-2.
Transfer Agent, registrar and stockholders services are provided by Banco de Credito of Peru at
Avenue Centenario 156, La Molina, Lima 12, Peru. Phone 51 (1) 348-5999, Fax 511-349-0592.
othEr CorPoratE INforMatIoN
For other information on the corporation or to obtain additional copies of the annual report,
contact the Corporate Communications Department at our corporate offices.
SouthErN CoPPEr CorPoratIoN
11811 north Tatum Blvd., Suite 2500, Phoenix, Az 85028, U.S.A.,
Phone: (602) 494-5328, Fax: (602) 494-5317. nYSE Symbol: PCU.
Avenida Caminos del Inca 171 (B-2), Chacarilla del Estanque, Santiago de Surco –
Lima 33 - Peru./ Phone: +(511) 512-0440, Extension 3354, Fax: +(511) 512-0486.
Lima Stock Exchange Symbol: PCU.
Web Page:
www.southerncoppercorp.com
Email address:
southerncopper@southernperu.com.pe
forM 10-k.
CErtIfICatIoN rEQuIrED by NEW york StoCk EXChaNGE
The attached Form 10-K contains Management’s Discussion and Analysis of Financial Condition
and Results of Operations, Consolidated Combined Financial Statements and the accompanying
notes are an integral part of these Annual Report.
The Company has filed with the nYSE the 2006 certification that the Chief Executive Officer is
unaware of any violation of the corporate governance standards of the nYSE. The Company has
also filed with the SEC the certifications required under Section 302 of the Sarbanes-Oxley Act of
2002, as exhibits to the Annual Report on 2006 Form 10-K. The Company anticipates filing on a
timely basis, the 2007 nYSE certification.
ANNUAL REPORT ’06
57
MEMbErS of thE boarD of DIrECtorS
auDIt CoMMIttEE
German Larrea Mota-Velasco
ChAIRMAn
Emilio Carrillo Gamboa
Alfredo Casar Perez
Jaime Fernando Collazo Gonzalez
Emilio Carrillo Gamboa
ChAIRMAn
Luis Miguel Palomino Bonilla, and
Gilberto Perezalonso Cifuentes
Xavier Garcia de Quevedo Topete
EXECutIVE offICErS
Eduardo Gonzalez Felix
Oscar Gonzalez Rocha
harold S. handelsman
Genaro Larrea Mota-Velasco
Armando Ortega Gomez
Luis Miguel Palomino Bonilla
Gilberto Perezalonso Cifuentes
Juan Rebolledo Gout
Carlos Ruiz Sacristan
Oscar Gonzalez Rocha
PRESIDEnT AnD ChIEF EXECUTIVE OFFICER
Xavier Garcia de Quevedo Topete
PRESIDEnT AnD ChIEF EXECUTIVE OFFICER
Eduardo Gonzalez Felix
VICE-PRESIDEnT, FInAnCE
Armando Ortega
VICE-PRESIDEnT, LEGAL AnD SECRETARY
Mario Vinageras Barroso
VICE-PRESIDEnT COMMERCIAL
Vidal Muhech Dip
VICE-PRESIDEnT, PROJECTS
Jose n. Chirinos Fano
COMPTROLLER
58
SOUTHERN COPPER CORPORATION
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ANNUAL REPORT ’06
59
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60
SOUTHERN COPPER CORPORATION