STATEMENT OF RESPONSIBILITY
“To the best of our knowledge this document contains truthful and sufficient information regarding the development of the
business of Southern Copper Corporation (“SCC”) during 2013. SCC takes responsibility for its contents according to applicable
requirements”
Hans A. Flury Royle
Assistant Secretary
Raul Jacob Ruisanchez
Vice-President Finance
and Chief Financial Officer
CONVERSION INFORMATION: All tonnages in this annual report are metric tons unless otherwise noted. To convert to short tons,
multiply by 1.102. All distances are in kilometers, to convert to miles, multiply by 0.62137. All ounces are troy ounces. U.S. dollar
amounts represent either historical dollar amounts, where appropriate, or U.S. dollar equivalents translated in accordance with
generally accepted accounting principles in the United States. “SCCO”, “SCC”, “Southern Copper” or the “Company” includes
Southern Copper Corporation and its consolidated subsidiaries.
INDEX
LETTER TO SHAREHOLDERS
PRODucTiOn STATiSTicS
cOPPER RESERvES
FinAnciAL AnD STATiSTicAL DATA
cAPiTAL invESTMEnT PROGRAM AnD EXPLORATiOn
DEvELOPMEnT - cOMMuniTY OuTREAcH
RESuLTS OF OPERATiOnS
for the years ended December 31, 2013, 2012 and 2011
SOciAL RESPOnSiBiLiTY AnD EnviROnMEnTAL AFFAiRS
GEnERAL inFORMATiOn
Description of Operations and Development Regarding The Issuing Entity
MininG SAFETY
MEMBERS OF THE BOARD OF DiREcTORS
03
08
10
14
16
24
34
40
67
80
93
01
Our investments, totaling uS$3.40 billion, in
Buenavista will make this mine the second
largest in the world in terms of production,
495,000 tons by 2016. Buenavista del cobre
Mine. Sonora, Mexico.
02
LETTER TO SHAREHOLDERS
2013 was a year marked by economic crisis, which negatively impacted the entire industry.
Nevertheless the complicated international situation, we remain optimistic and reaffirm our trust
in the copper market. The world’s major economies, the U.S., Europe and Japan, which together
approximately represent 54% of the global gross domestic product, have shown signs of the
beginning of a synchronized economic growth period which is rising direct and indirect demand
for copper.
To take advantage of the expected increased demand for copper, our main product, the Company
increased its capital expenditures, reaching a new record of $1,703.3 million, over $650 million
higher than the prior mark set in Y2012, and it represents 105.2% of the net income, which
reached $1,618.5 million.
Our growth program to develop the full production potential of Southern Copper is in full steam.
For 2014, we plan to invest $2.3 billion in capital projects, an increase of $600 million when
compared to 2013 figures and 142% of last year’s net income.
In line with our growth program, in 2013 we moved forward with the aim of developing our
projects. In the 4Q13, we successfully held the two workshops and the public hearing required
as part of the approval process for the project’s Environmental Impact Assessment (EIA). We
expect to receive approval of the EIA by the end of 2Q14. Considering this time line, Tia Maria
project is expected to start-up production late in 2016. The project capacity is 120,000 tons of
copper per year.
For the year 2013, total copper production was 617,019 tons. Molybdenum and zinc production
increased by 8.7% and 10.6% in 2013 compared with 2012. The 2013 molybdenum production
03
With the expansion of the Buenavista del cobre
mine, we have created more than 10,000 jobs.
Buenavista del cobre Mine. Sonora, Mexico..
includes a new record mark of 11,742 tons at our La Caridad mine and 359 tons from the first
production of the new molybdenum plant at Buenavista. The zinc production increase was due
to full year production at the Santa Eulalia mine after prior years flood disruptions.
We believe we are well positioned to take advantage of the strong fundamentals of the copper
market, and that our aggressive growth investment program, which aims to increase production,
compared to the current capacity, by approximately 1.2 million tons by 2017, will lead to higher
profits in the coming years.
In November 2013, World Finance, an international business magazine, recognized our 2012
$1.5 billion fixed-rate senior unsecured notes as the best mining debt issuance of the year. The
notes were issued in two tranches, $300 million due in 2022 at an annual interest rate of 3.5%
and $1.2 billion due in 2042 at an annual interest rate of 5.25%. At the time, these interest
rates were the lowest obtained by any BBB rated Latin-American debt issuer with maturities of
10 and 30 years.
04
We also believe that we have the world’s largest copper reserve. Our copper reserves at
December 31, 2013, totaled 67.6 million tons of copper content, calculated at a price of $2.00
per pound (as of December 31, 2013, the LME and COMEX copper price was $3.35 and $3.44,
respectively.
Our main operations are in Mexico and Peru, where we also conduct an intensive exploration
program. In 2013, we continued our policy of internationalization, looking for new mineral deposits
in Latin America, making a further active exploration program in Chile, Argentina and Ecuador.
Operating cash cost of copper before by-product credits was $1.899 per pound in 4Q13,
compared with $1.787 per pound in 3Q13, an increase of 6%, mainly due to increases in labor,
fuel, power and operating material cost. Operating cash cost per pound net of by-product
credits was $1.001 in 4Q13, compared to $0.981 in 3Q13. Better prices and volumes for by-
products partially offset 4Q13 copper costs increases. For the year 2013, operating cash cost
per pound of copper before and net of by-product credit were $1.916 and $0.996, respectively.
05
In addition, our social programs continue to run in each of the countries where we work for
exploration, mining, concentration, smelting, refining and marketing of our products. Neighboring
populations of our operational areas benefit of the social work of the Company.
On behalf of Southern Copper Corporation’s Board, we express our thanks to all our personnel
for their effort, hard work and dedication, to our clients for their continued trust and loyalty, and
to you, our shareholders, for our permanent support.
GERMAN LARREA MOTA VELASCO
Chairman of the Board
OSCAR GONzALEz ROChA
XAVIER GARCIA DE QUEVEDO
President and Chief Executive Officer
President and Chief Executive Officer
06
copper production in the cuajone Mine
increased 6%, reaching 168,582 tons in
2013, due to substantial investments in
the past years. cuajone Mine, Moquegua,
Peru.
07
PRODUCTION STATISTICS
Southern Copper Corporation and Subsidiaries
Five-year Production Statistics
2013
2012
2011
2010
2009
Copper production Mines
Mined Material
(tons)
641,456
568,428
502,909
398,953
355,727
Copper in concentrates
498,361
516,572
465,973
397,030
424,199
Copper SX/EW
Total Copper
Molybdenum in concentrates
Zinc in concentrates
Silver in concentrates
(thousand ounces)
118,658
121,107
121,518
81,497
61,177
617,019
637,679
587,491
478,527
485,376
19,897
99,372
13,513
18,297
89,884
13,644
18,570
83,807
12,731
20,519
99,194
12,646
18,687
110,430
13,202
545,082
558,998
569,492
429,899
505,088
(thousand ounces)
97,692
15,572
93,542
13,867
90,869
12,731
95,072
12,646
98,688
13,202
(thousand)
169,808
173,927
177,398
179,313
149,287
110,691
120,108
120,379
131,518
127,125
4,662
4,468
5,363
4,828
3,598
(thousand)
173,277
154,091
140,108
126,144
117,939
168,582
158,793
140,140
164,968
188,950
3,133
2,861
2,787
5,259
5,293
Smelter/refineries production
Copper
Zinc
Silver
Toquepala
Mined Material
Copper in concentrates
Molybdenum in concentrates
Cuajone
Mined Material
Copper in concentrates
Molybdenum in concentrates
08
Smelter/refineries in Peru
SX/EW
Smelt concentrates
Blister produced
Anode produced
Cathode produced
Mexicana de Cobre – Caridad
2013
2012
2011
2010
2009
28,400
32,194
35,322
37,938
37,961
1,072,826
996,592
1,094,224
997,933
1,127,455
1,670
32,843
-
-
8,741
322,637
265,213
337,812
312,478
336,781
271,035
215,666
260,998
255,505
262,220
Mined Material
(thousand)
88,595
86,632
84,266
84,163
85,491
Copper in concentrates
Molybdenum in concentrates
Buenavista
Mined material
Copper in concentrates
Smelter/Refineries in Mexico
SX/EW
Smelt concentrates
Anode produced
Cathode produced
96,863
11,742
97,847
10,968
89,778
94,871
102,501
10,420
10,432
9,796
(thousand)
206,710
150,871
98,306
6,439
115,813
133,966
110,147
-
-
-
90,258
88,913
86,196
43,559
23,216
722,597
904,311
832,307
416,730
465,992
220,775
260,941
231,680
116,534
139,652
188,005
213,734
186,853
84,626
117,134
126,800
120,791
107,925
57,264
60,072
Underground Mines
Contents in concentrates
(thousand)
Zinc
Lead
Copper in concentrates
Silver
Gold
99,372
89,884
83,807
99,194
110,430
23,918
19,978
18,817
20,240
22,492
6,412
6,170
5,493
5,858
5,974
5,210
5,529
5,866
6,286
5,673
6,549
5,023
5,623
6,778
3,136
(thousand ounces)
(thousand ounces)
09
COPPER
RESERVES
010
US$5.953
billion
SALES IN 2013
Our expansion projects will further decrease our operating cost. We look forward to maintain operating
cost of uS$1.00/lb for 2017.
011
011
the design and construction of the new
molybdenum plant at Buenavista was completed
in a record time of 15 months, Molybdenum Plant
at Buenavista, Sonora, Mexico.
12
COPPER RESERvES
Southern Copper Corporation and Subsidiaries
We believe we hold the world’s largest copper reserve position. Our copper ore reserves, at December 31, 2013,
totaled 67.6 million tons of contained copper, calculated at a copper price of $2.00 per pound (as of December 31,
2013, the LME and COMEX copper price was $3.35 and $3.44, respectively), as follows:
Copper contained in ore reserves
Thousand tons
Mexican open-pit:
Buenavista del Cobre
La Caridad
IMMSA
Peru
Toquepala
Cuajone
Development projects
El Arco
TIa Maria
Angangueo
Total
For more information on ore reserves refer to “Mineral Reserves” (p. 62-70) of our Form 10-K 2013.
22,463
8,426
220
15,923
9,180
8,772
2,525
91
67,600
13
SOUTHERN COPPER CORPORATION AND SUbSIDIARIES
FIvE-YEAR SELECTED FInAnCIAL AnD STATISTICAL DATA
FoR ThE YEARS EnDED DECEMBER 31
(in millions, except per share amounts, employee
data and stock and financial ratios)
2013
2012
2011
2010
2009
Consolidated Statement of earnings
net sales
operating costs and expenses
operating income
non-controlling interest of investments shares on
$ 5,953
$ 6,669
$ 6,819
$ 5,149
$ 3,734
3,421
2,532
3,560
3,109
3,193
3,625
2,545
2,604
2,249
1,485
Peruvian Branch Income
6
7
8
9
5
net earnings attributable to SCC
$ 1,619
$ 1,935
$ 2,336
$ 1,554
$
929
Per share amount (1)
net earnings attributable to SCC – basic and diluted
Dividends paid
Consolidated balance sheet
Total assets
Cash and cash equivalent
Total debt
Total equity
$
$
1.92
0.68
$
$
2.28
4.06
$
$
2.73
2.43
$
$
1.83
1.68
$
$
1.09
0.44
$ 1,673
$ 2,460
$
848
$ 2,193
$
772
11,210
10,384
4,205
4,204
8,063
2,746
8,128
2,760
6,058
1,280
$ 5,562
$ 4,789
$ 4,036
$ 3,910
$ 3,894
Consolidated statement of cash flows
Cash provided from operating activities
$ 1,857
$ 2,004
$ 2,080
$ 1,921
$
Dividend paid
Capital expenditures
Depreciation & depletion
Capital stock (1)
574
1,703
396
3,140
1,052
326
$
2,080
613
288
282
409
$ 1,428
$
963
274
415
376
Common shares outstanding (in thousands)
835
846
850
859
859
nYSE price – high
nYSE price – low
Book value per share
P/E ratio
Financial ratios
Current assets to current liabilities
net debt as % of capitalization (2)
Employees (at year end)
$ 41.96
$ 38.94
$ 49.59
$ 48.84
$ 36.40
$ 24.78
$ 28.16
$ 23.99
$ 26.19
$ 12.74
$
6.62
$
5.64
$
4.77
$
4.58
$
4.56
14.95
16.60
11.04
26.94
30.44
4.36
5.02
3.11
31.3%
26.8%
32.0%
3.28
12.7%
3.04
11.5%
12,665
12,085
12,145
11,510
11,494
(1) The number of shares and values per share has been adjusted to reflect the 2008 stock splits.
(2) Represents net debt divided by net debt plus equity. Net debt is total debt minus cash and cash equivalents balances.
14
One of the 7 shovels of the new equiment at
our Buenavista mine to increase production
by 175% in 2016. Buenavista del cobre mine,
Sonora, Mexico.
15
CAPITAL
INVESTMENT
PROGRAM AND
EXPLORATION
16
US$2.945
billion RATio oF
EBITDA IN 2013
The consolidated investment program of Southern copper corporation in 2013 reached an historical
record of u.S.$ 1.703 billion, representing a growth of 70% compared to 2012.
1717
The 42 meters high and 88 meters diameter
Geodesic Dome prevents spreading of dust
in the ore deposit. Buenavista del cobre
mine, Sonora, Mexico.
18
CAPITAL EXPENDITURES AND
EXPLORATION
Expansion and Modernization
Capital expenditures were a new record of $1,703.3 million
is expected to be completed in the first half of 2015. Four
for Y2013, 61.9% higher than in 2012. The increase
of the six ball mills acquired for the project have been
reflects our strong commitment to the growth program to
installed; we are currently in the process of installing the
develop the full production potential of our Company. For
remaining two.
2014, we plan to invest $2.3 billion in capital projects, our
investment program aims to increase copper production
Regarding
the mine equipment acquisition,
through
capacity by 2017 in approximately 87% from 630,000
December 31, 2013 we have spent $481.7 million from a
tons to 1,175,000 tons. In addition to our ongoing capital
total budget of $504.8 million and have received 60 of 61
maintenance and replacement spending, our principle
trucks, the seven shovels and the eight drills required.
capital programs include the following:
The SX-EW III project is moving forward to completion with
PROjEcTS in MEXicO
an overall progress of 81.6% at December 31, 2013. The
Buenavista Projects.- The new concentrator with
total capital budget of the project is $444.0 million of which
molybdenum circuit project includes a concentrator with
we have spent $373.6 million through December 31, 2013.
an estimated annual production capacity of 188,000 tons
The project production capacity is 120,000 tons of copper
of copper and a second molybdenum plant with a 2,600
cathodes per year and it is expected to start operating in
ton capacity. In addition, the project is expected to produce
the second quarter of 2014.
annually 2.3 million ounces of silver and 21,000 ounces
of gold. The total capital budget of the project is $1,383.6
Quebalix IV change in scope. As previously reported, this
million and through. December 31, 2013 it has a 62.9%
project will improve the SX-EW copper production by
progress with an investment of $544.9 million. The project
increasing recovery and reducing hauling cost, as well as
19
in 2013, we obtained first 10% savings on
the power cost for operations in Mexico, by
buying power at lower cost from a private
company. caridad Mine panoramic view.
Sonora, Mexico.
processing time. Recently, we have reassessed the project’s crushing capacity and found that
by increasing it from 40 to 80 million tons per year, it could eliminate the need for an additional
Quebalix facility in the future and operate at a lower unit cost. On January 30, 2014, our Board
of Directors approved the described change in scope, increasing the total capital budget of the
project by $100 million, to $340 million. The project is expected to be completed in the first half
of 2015.
The remaining projects to complete the $3.4 billion budgeted program include investments in
infrastructure, land acquisition and other facilities at Buenavista.
PROjEcTS in PERu
Toquepala Projects.- Through December 31, 2013, we have spent a total $288.5 million
on Toquepala projects. These projects include the construction of a new in-pit crusher and
20
conveyor belt system at a cost of $88.5 million to replace current mine rail haulage, which we
expect will reduce annual operating cost by approximately $5.5 million.
Cuajone Projects.- Through December 31, 2013, we have spent $146 million of a total budget
of $157 million on two projects to increase productivity through technological improvements in
this unit: (i) the Variable Cut-off Ore Grade project and (ii) the hPGR project.
A Cuajone production increment of 6.2% in 2013 shows the results of the variable cut-off ore
grade project, which was completed in the first quarter 2013 at a cost of $112 million. The
hPGR project, which will produce a more finely crushed material, is currently in the ramping
up stage and we expect to reach full capacity during the first quarter 2014. The project will
improve copper recovery and generate cost savings by reducing power consumption in the
crushing process. The total project budget is $45 million of which we have spent $34 million
21
implementation of the variable cut-off ore
grade project allowed a production increase
of 6% in 2013. cuajone Mine, Moquegua,
Peru
22
as of December 31, 2013. We expect that both projects will be at full capacity by the first half
2014.
The project to improve slope stability at the south area of the Cuajone mine Cuajone, will
remove approximately 148 million tons of waste material in order to improve the mine design
without reducing our actual production level. The mine equipment acquired includes one
shovel, five trucks, one drill and auxiliary equipment. Besides preparing the mine for the
future, this investment will avoid a reduction in average ore grade between 2014 and 2018,
while maintaining current production levels. At December 31, 2013, we have spent $59.4
million of a total budget of $65.1 million.
For more information on our exploration activities in Mexico, Peru, Chile, Ecuador and
Argentina, please refer to pages 8-10 and 69-71, 2013 10K Form.
ThE BOARD OF DIRECTORS APPROVED AN INvESTMENT PROGRAM
OF $ 2.3 bILLION FOR 2014. ThIS FIGURE REPRESENTS A
GROWTh OF US$ 600 MILLION ON INVESTMENTS COMPARED TO 2013.
23
DEVELOPMENT -
COMMUNITY
OUTREACH
24
oVER
$44
Million WERE INVESTED
IN SOCIAL PROJECTS IN 2013
25
$6,65 Million
in EducATion
INVESTmENTS
children at Toquepala Public School, Tacna, Peru
2626
COMMUNITY OUTREACH
Value generation at Southern Copper Corporation is a
corporate values as well as our mission and vision of
major element of our corporate objectives. We develop
community development.
our management approach on a methodological basis,
aligned with our business model and to the needs of
In 2013 we invested over $44 million in social projects to
communities and the regions where we operate. Our
promote the development of the local communities. This
operating practices are closely related to follow our
investment is 56% higher than in 2012.
Programs a
SCC (in millions)
$6,65 Million
in EducATion
INVESTmENTS
Community development
Social bonding
Community development programs
Sporsorships and donations
Infrastructure and equipment in neighboring colonies
Employees and communities
Education investments
Sports and cultural programs
Investment in infrastructure in SCC local communities
ToTAL
$
$
$
$
$
$
$
$
2,264,576.93
5,071,186.99
4,833,202.13
1,165,974.60
6,650,018.78
1,016,233.57
23,572,033.09
44,573,226.09
27
MEXicO
In 2013, with an investment of over $2 million, we operated 130 projects focusing on education,
environment, health and wellness, infrastructure, welfare, sports, music, nutrition, social
inclusion, violence prevention, cultural expression and family values; some projects are the
result of requests from Cananea, Sonora; Sombrerete, zacatecas and Taxco, Guerrero. Through
our Community Development Plan, we carried out 3,074 activities in 13 communities, increasing
4% over 2012 and benefiting 94,510 people.
Our Community Development Plan is based on a model of partnership and shared responsibility
with the local communities.
PERu
Discussion groups (“Mesas de Diálogo”) installed with Candarave and Jorge Basadre
communities have facilitated implementation of Candarave Development Fund, allowing
sustainable development through agreements and projects in the communities. The main lines
of action in which we develop our programs are health and nutrition, capacity building and
infrastructure support to the agricultural sector.
cOMMuniTY OuTREAcH
1. EDucATiOn
We support the education sector through grants, sponsorships, infrastructure development,
maintenance of equipment, development of educational management units and delivery of
courses
In Peru, we maintain educational services and programs and support the Candarave school
system, by organizing competitions in math, reading comprehension, science and technology.
28
In Mexico, the Company funds the educational costs for the employees’ children and strengthens
development capacity, providing infrastructure, materials and school equipment, detailed in
subsequent axes.
2. STREnGTHEninG HuMAn cAPiTAL
Our goal is to promote entrepreneurship and identify innovative business opportunities as well
as generate inter-institutional networks with the participation of universities and research groups
to strengthen human capital of the communities.
In Mexico, we conduct training activities, including courses and workshops on human
development, development of productive skills, social capital studies, diplomas in management
and social management training, awareness campaigns for social inclusion, citizen participation
programs and sporting and cultural activities.
In Peru, the Company strengthens human capital through workshops on entrepreneurship and
technical training programs and courses in photography, cooking, painting, cosmetology, tailoring
and dance, among others. We also support programs for municipalities and organizations to
strengthen their institutional management capacities.
3. inFRASTRucTuRE AnD SERvicES
In Mexico, we approved 37 projects to improve schools and community sites, rehabilitating
classrooms, health and sports facilities, libraries and cafeterias, and installing domes for
roofing of municipal playgrounds, among other projects. We also carried out road maintenance
programs, including road paving improvement in and access to town sites of Grupo Mexico’s
employees as well as maintenance of staff’s homes. In Cananea, Sonora, we undertook the
project “New Cananea Service and Entertainment Center” which includes a specialty hospital,
29
We provided support to the hospital and
carried out social programs (health,
vaccination campaigns, nutrition and other.
children of Torata Alta, Moquegua. Peru
supermarket, fitness center with an indoor pool, offices, doctors’ offices, movie theaters, shops,
hotel, bowling, service shop, ballroom, area for housing, sports facilities, park, nursery and
nature reserves.
In Peru, we conducted 11 programs in canals and irrigation techniques, and installed water
treatment plants to improve water infrastructure and benefit agricultural productivity. Likewise,
300 Locumba farmers benefited from the installation of geomembrane. We conducted seven
programs of conservation and restoration of homes, public buildings and premises as well
as maintenance of local and institutional buildings. We also satisfactorily completed, through
different stages, the sealing and asphalting of roads at Cuajone and Toquepala.
4. PRODucTivE PROjEcTS
In Southern Copper Corporation we strengthen community development through the development
of productive capacities, so we carry out projects and advice through intersectorial collaboration
30
for implementing of high-impact programs. We generate jobs, funding and training, and promote
diversification of economic activities to raise the community and its’ peoples standard of living.
In Mexico, we develop skills through courses that provide occupational choices for people with
productive potential. This year, we provided 130 courses and offered 9,686 hours in workshops
to 1,781 people. We continued our project, which aims to develop productive skill s courses in
various occupations, activities and services.
In Peru, we promote entrepreneurship and strengthening of small and medium enterprises
(PYMES) to increase production and marketing capacities of textile makers. Through inter-
sectorial partnerships we have promoted projects for strengthening of business skills to 305
budding businesswomen. We contribute to the generation of 52 companies in the textile sector,
bakery and others to improve their family income and household economy.
31
5. EnviROnMEnT
In Southern Copper Corporation our environmental contribution is reflected in all our
programs, we support educational institutions, local programs and our participation in
global events that generate a multiplier effect to the community.
In Mexico, we conduct seminars and family workshops to build a platform for social-
environmental intervention in the community. We also create opportunities for linking
action in the youth population from neighboring schools to the Company. We also reflect
our commitment through the “New Cananea Services and Entertainment Center”. The
water treated in its park is used for the maintenance of the regional flora, pastures and
native trees of Sonora.
In Peru we also promote environmental awareness through educational talks in area
schools carried on significant dates such as the World Water Day.
6. HEALTH AnD nuTRiTiOn
In Mexico, we support health and psychosocial risks prevention campaigns by promoting
healthy habits related to addiction problems. We also supported the General hospital of
Sonora in the rehabilitation of its facilities, using resources allocated to health projects.
We certified the local areas, such as “El Globo” and “Caridad”, totaling seven certified
areas as safe and healthy by the Ministry of health. Additionally, Santa Eulalia became
the first unit of the Company to obtain the “healthy Enterprise” certification. We held
76 talks about nutrition and seven workshops with 1,243, and 87 people participating,
respectively. Also, we provided nutritional support with 1,243 consultations of our
nutritionists and further follow-up of 154 patients.
32
In Peru, we supported whole health and addiction prevention campaigns while providing
telemedicine equipment in Torata. We also supported a nursing home and donated furniture to
the Moquegua fire department. We held education programs in Toquepala, Ilo and Cuajone. We
also provided support to the hospital and carried out programs to promote health, vaccination
campaigns, sexual orientation, family planning, responsible parenthood, school nutrition and
talks related to food deficit. We assisted vulnerable groups through specialized surgery and
medical treatments of cleft lip and burn sequels. Similarly, we supported disabled community
members by the purchase of wheelchairs.
Our personnel in Peru have three area hospitals at Cuajone, Ilo and Toquepala, for medical
treatment; this benefit covers employees’ children under 24 years, as well as their parents.
7. SPORTS AnD cuLTuRAL
In Mexico, we sponsor sporting events and educational institutions for workers, including
registrations in tournaments, club events and activities in golf and baseball. The Company
promotes workshops on artistic and cultural activities, festivals, cultural exhibitions, sports
tournaments and courses on physical activities.
In Peru, we support sports and recreation programs in Ilo, Cuajone and Toquepala, including
tournaments, courses and championships in football, volleyball, bowling, basketball, powerlifting
and swimming. We also participate in the development of school sports national and regional
programs. The Company sponsors recreational, cultural and identity programs in Toquepala, Ilo
and Cuajone, such as Rural Women´s Day, visits to hospitalized mothers, festivals for national
holidays, fairs, parades, seniority ceremonies, gatherings for Christmas holidays and New Year’s
Day parties. We also collaborate with the Regional Director of the National Institute of Culture in
Moquegua for the implementation of regional cultural events.
33
RESULTS Of
OPERATIONS
34
IN 2013, COPPER
PRODUCTION wAS
617,019 TONS
Southern copper corporation has one of the lowest ratio of EBiTDA in the industry.
35
35
in 2013, molybdenum production in
Toquepala increased 4%. Toquepala
concentrator, Tacna, Peru.
36
RESULTS OF OPERATIONS
The years ended December 31, 2013, 2012 and 2011.
Our net income attributable to SCC in 2013 was
Operating cash cost: The Company presents its operating
$1,618.5 million, compared to $1,934.6 million in 2012
costs both including and excluding the revenues of its
and $2,336.4 million in 2011. Net income attributable
byproducts (molybdenum, silver, sulfuric acid, etc.).
to SCC decreased mainly as a result of the decrease in
Excluded from its calculation of operating cash cost are
metal prices and other factors described above.
the cost of purchases of third parties metal, depreciation,
amortization and depletion, exploration, workers
The Company reported 2013, net income attributable to
participation provisions and other items of non-recurring
SCC of $1,618.5 million or diluted earnings per share of
nature, and the royalty charges.
$1.92, compared with net income attributable to SCC of
$1,934.6 million or diluted earnings per share of $2.28
The Company’s operating cash cost, as previously
in 2012, $2,336.4.0 million or diluted earnings per share
defined, for the three years ended December 31, is as
of $2.73 in 2011.
follows:
operating Cash Cost without by-product revenues
operating Cash Cost with by-product revenues
2013
2012
(dollar per pound)
2011
1.92
1.00
1.73
0.69
1.70
0.51
As seen on the chart above, operating cash cost per pound of copper without by-product revenues was $0.19 per pound
higher than in 2012, an increase of 11.0%, due to higher production cost. Production cost increases were primarily, from
Peruvian labor cost, as a result of the new collective bargaining agreements, and higher fuel and power costs. In addition,
there were increases in some of the other operating material we use in our operations, including tires, explosives and
reagents.
37
net Sales: Net sales in 2013 were $5,952.9 million, compared to $6,669.3 million in 2012, a
decrease of $716.4 million or 10.7%. The decrease was principally the result of lower copper
prices and sales volume as well as lower prices for our major by-products partially offset by
higher sales volume of molybdenum, zinc and silver. Copper made up 78.2% of net sales in 2013,
compared to 77.0% in 2012. Sales of by-products in 2013 totaled $1,298.1 million, compared to
$1,532.4 million in 2012, a decrease of 15.3%.
Prices: Sales prices for the Company’s metals are established, mainly by reference to the prices
quoted in the London Metal Exchange (LME) and The New York Commodity Exchange (COMEX),
or published in the Platt’s Metals Week, for dealer oxide mean prices for molybdenum.
Price/volume Data
2013
2012
2011
Average metal prices
Copper (per pound - LME)
Copper (per pound - CoMEX)
Molybdenum (per pound)
Zinc (per pound - LME)
Silver (per ounce - CoMEX)
3.32
$
3.34
$
10.26
$
0.87
$
$ 23.82
$
$
$
$
$
3.61
3.61
12.62
0.88
31.19
4.00
$
$
4.01
$ 15.33
$ 0.99
$ 35.18
Sales volume (in thousands)
2013
2012
2011
Copper (pounds)
Molybdenum (pounds) (1)
Zinc (pounds)
Silver (ounces)
$ 1,382.4
43.9
$
218.5
$
16.6
$
$ 1,414.6
40.2
$
205.9
$
16.2
$
$ 1,320.5
41.1
$
199.9
$
14.2
$
(1) The Company´s molybdenum production is sold in the form of concentrates. Volume represents pounds of molybdenum
contained in concentrates.
38
400 tons truck, one of
the largest in the world.
Buenavista del cobre,
Sonora, Mexico.
39
SOCIAL
RESPONSIBILITY
AND
ENVIROMENTAL
AffAIRS
40
US$150
Million INVESTED
IN ENVIRONmENTAL ACTIONS
IN 2013, wHICH REPRESENTS
A 26% INCREASE COMPARED
wITH 2012.
in 2013, we doubled our production capacity to 4 million trees in our nurseries and greenhouses.
Greenhouse Buenavista del cobre. Sonora, Mexico.
4141
Reforestation activities developed
every year allow us contributing to the
mitigation of impacts caused by climate
change. Greenhouse La caridad.
Sonora, Mexico.
42
ENvIRONMENTAL MATTERS
In Peru, we conducted 11 programs in canals and irrigation techniques, and installed
water treatment plants to improve water infrastructure and benefit agricultural
productivity.
The Company has instituted extensive environmental
Environmental capital expenditures in years 2013, 2012
conservation programs at its mining facilities in Peru and
and 2011, were as follows (in millions):
Mexico. The Company’s environmental programs include,
among other features, water recovery systems to conserve
2013
2012
2011
water and minimize impact on nearby streams, reforestation
programs to stabilize the surface of the tailings dams and
Mexican operations
Peruvian operations
39.8 $
$
$ 20.9 $
20.7 $
6.7 $
11.5
2.5
the implementation of scrubbing technology in the mines to
reduce dust emissions.
Total
$
60.7 $
27.4 $
14.0
COMPANY ENvIRONMENTAL
INCLUDE, AMONG OThER
PROGRAMS: WATER RECOvERY
SYSTEM, vEGETATION,
PROGRAM AND IMPLEMENTATION
OF WET CLEANING TECHNOLOGY
IN MINES.
43
Mexican operations: The Company’s operations are subject to applicable Mexican federal,
state and municipal environmental laws, to Mexican official standards, and to regulations for
the protection of the environment, including regulations relating to water supply, water quality,
air quality, noise levels and hazardous and solid waste.
The principal legislation applicable to the Company’s Mexican operations is the Federal
General Law of Ecological Balance and Environmental Protection (the “General Law”), which
is enforced by the Federal Bureau of Environmental Protection (“PROFEPA”). PROFEPA
monitors compliance with environmental legislation and enforces Mexican environmental laws,
regulations and official standards. PROFEPA may initiate administrative proceedings against
companies that violate environmental laws, which in the most extreme cases may result in the
temporary or permanent closing of non-complying facilities, the revocation of operating licenses
44
in 2013, 73% of total water
consumption of our mining operations
was recovered water. Thickeners,
Sonora, Mexico.
and/or other sanctions or fines. Also, according to the federal criminal code, PROFEPA must
inform corresponding authorities regarding environmental non-compliance.
In addition in 2011, amendments to the Civil Federal Procedures Code (“CFPC”) were
published in the Official Gazette and are now in force. These amendments establish three
categories of collective actions, by means of which 30 or more people claiming injury derived
from environmental, consumer protection, financial services and economic competition issues
will be considered to be sufficient in order to have a legitimate interest to seek through a civil
procedure restitution or economic compensation or suspension of the activities from which
the alleged injury derived. The amendments to the CFPC may result in more litigation, with
plaintiffs seeking remedies, including suspension of the activities alleged to cause harm.
45
In June 2013, the Environmental Liability Federal Law was published in the Official Gazette
and became effective one month thereafter. The law establishes general guidelines in order to
determine which environmental actions will be considered to cause environmental harm that
will give rise to administrative responsibilities (remediation or compensations) and criminal
responsibilities. Also economic fines could be established.
In March 2010, the Company announced to the Mexican federal environmental authorities
the closure of the copper smelter plant at San Luis Potosi. The Company initiated a program
for plant demolition and soil remediation with a revised budget of $62.4 million, of which
the Company has spent $35.7 million through December 31, 2013. Plant demolition and
construction of a confinement area at the south of the property were completed in 2012
and the Company expects to complete soil remediation and the construction of a second
confinement by the end of 2014. The Company expects that once the site is remediated, the
46
Production in our nursery of
endemic species is intended to
reforestation and rehabilitation of
ecosystems, including reforestation
of areas not adjacent to our mining
operations. La caridad nursery.
Sonora, Mexico.
2011
2012
2013
1.73
2
4
TREES ANNUAL PRODUCTION
CAPACITY IN MILLIONS
Company will decide if it will sell the property or promote an urban development to generate a
net gain on the disposal of the property.
Peruvian operations: The Company’s operations are subject to applicable Peruvian
environmental laws and regulations. The Peruvian government, through the Environmental
Ministry conducts annual audits of the Company’s Peruvian mining and metallurgical operations.
Through these environmental audits, matters related to environmental commitments, 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.
Peruvian law requires that companies in the mining industry provide for future closure and
remediation. In accordance with the requirements of this law the Company’s closure plans were
47
Our teaching nursery in San Luis Potosi is
an example of a response to social issues
converging with environmental ones. San
Luis Potosi nursery, Mexico.
approved by MINEM. As part of the closure plans, the Company is providing guarantees to ensure
that sufficient funds will be available for the asset retirement obligation. See Note 9, “Asset
retirement obligation,” for further discussion of this matter.
In 2008, the Peruvian government enacted environmental regulations establishing more stringent
air quality standards (“AQS”) for daily sulfur dioxide (“SO2”) concentration for the Peruvian
territory.
These regulations, as amended in 2013, recognize distinct zones/areas, such as atmospheric
basins, with significant population density and industrial activity. As part of these regulations the
Ministry of Environment (MINAM) was required to carry-out a 12 month ambient air monitoring
period, prior to January 1, 2014, to establish SO2 levels. Those areas with a mean 24-hour
concentration of SO2 equal or less than 20 micrograms per cubic meter (“ug/m3”) are required
to develop programs to maintain this level of compliance. Those areas or cities which are in
excess of the mean 24-hour SO2 concentration equal to 20 ug/m3 will be required to establish
an Action Plan to address this problem and are required to achieve the 20 ug/m3 AQS in the
48
future and meanwhile they are required to achieve mean 24-hour AQS equal to 80 ug/m3 of
SO2. MINAM has established three atmospheric basins that require further attention to comply
with these new air quality standards. The Ilo basin is one of these three areas and the Company’s
smelter and refinery are part of the area. The Company expects to join the local government
of Ilo, other industries and stakeholders in the Ilo basin to develop the action plan and evaluate
alternatives and their feasibility in order to achieve these new AQS.
In 2013, the Peruvian government enacted new soil environmental quality standards applicable
to any existing facility or project that generates or could generate risk of soil contamination in its
area of operation or influence. The rule applies to any existing facility or project and requires the
Company to report a soil testing analysis. The rule requires the Company to report the results
to the authorities. If the results identify any contamination, the Company must prepare a soil
decontamination plan that should be completed in three years. The Company will have twelve
months after the issuance of the regulations to update its approved environmental programs to
comply with the requirements of the rule. The Company is waiting the complementary regulations
to this rule in order to determine its financial impact
49
climate change.- We consider that potential physical impacts of climate change on our operations
are highly uncertain, and maybe specific for the geographic locations of our operations. These
can include changes in rain fall patterns, water shortages, changes in sea level, in the patterns
and intensities of storms, and temperatures. These effects can have a negative impact on the
cost, production and financial performance of our operations.
The development of more demanding environmental protection programs in Mexico and Peru
and in relevant trade agreements could impose limitations and additional costs on our operations
and require us to make significant capital expenditures in the future. We cannot ensure that
laws, regulations, or current or future trade agreements will not have a negative effect on our
operations, properties, results of operations, financial condition or prospects.
The Company believes that all of its facilities in Peru and Mexico are in material compliance with
applicable environmental, mining and other laws and regulations.
The Company also believes that continued compliance with environmental laws of Mexico and
Peru will not have a material adverse effect on the Company’s business, properties, result of
operations, financial condition or prospects and will not result in material capital expenditures.
50
We promote a culture of rational use,
treatment, recycling and utilization
of waste water that may lead to a
sustainable operation. Torata Dam.
Moquegua, Peru.
51
GENERAL
INfORMATION
52
WE HAd A oF
WORKFORCE
12,750
PERSONS IN 2013
During 2013, implementation of SAP system started in order to standardize and have more efficient
operations.
5353
One of the 8 drillers that is part of the
new equipment at our Buenavista mine
to increase production by 175% in 2016.
Buenavista Mine. Sonora, Mexico.
54
GENERAL INFORMATION
Effective February 1, 2012, Minerales Metalicos del Norte S.A was merged with
Industrial Minera Mexico S.A. de C.V. (IMMSA). IMMSA absorbed Minerales Metalicos
del Norte S.A.
Information related to its constitution and their inscription
in Delaware in 1952 and have conducted copper mining
in the Public Registry: See: “Brief historical review from
operations since 1960. Since 1996, our common stock
the constitution of the Company” on page 74. Brief
has been listed on both the New York and the Lima Stock
Description: Southern Copper Corporation is one of
Exchanges.
the largest integrated copper producers in the world.
We produce copper, molybdenum, zinc, lead, coal and
Our Peruvian copper operations involve mining, milling and
silver. All of our mining, smelting and refining facilities are
flotation of copper ore to produce copper concentrates
located in Peru and in Mexico and we conduct exploration
and molybdenum concentrates, the smelting of copper
activities in those countries and in Chile, Ecuador y
concentrates to produce anode copper, and the refining
Argentina. Our operations make us one of the largest
of anode copper to produce copper cathodes. As part
mining companies in Peru and also in Mexico. We are
of this production process, we also produce significant
one of the largest copper mining companies in the world
amounts of molybdenum concentrate and refined silver.
with significant copper reserves. We were incorporated
We also produce refined copper using SX/EW technology.
THE COMPANY WAS ORGANIzED IN DELAWARE IN 1952,
AND hAVE CONDUCTED COPPER MINING OPERATIONS SINCE 1960.
SINCE 1996, OUR COMMON STOCK hAS BEEN LISTED ON bOTH
THE NEW YORk AND THE LIMA STOCk EXCHANGES.
55
in 2013, construction of Quebalix iii
Project was concluded, which will grind
up to 15 million of tons of ore per year,
increasing and advancing recovery of
copper during the leaching process,
improving the SW-EW Plant production
as well as reducing hauling cost of ore.
Buenavista, Sonora, Mexico
We operate the Toquepala and Cuajone mines high in the Andes mountains, approximately
860 kilometers southeast of the city of Lima, Peru. We also operate a smelter and refinery
west of the Toquepala and Cuajone mines in the coastal city of Ilo, Peru.
Our Mexican operations are conducted through our subsidiary, Minera Mexico S.A. de C.V.
(“Minera Mexico”), which we acquired on April 1, 2005. Minera Mexico engages principally in
the mining and processing of copper, molybdenum, zinc, silver, gold and lead. Minera Mexico
operates through subsidiaries that are grouped into three separate units. Mexicana de Cobre
S.A. de C.V. (together with its subsidiaries, the “Mexcobre unit”) operates La Caridad, an
open-pit copper mine, a copper ore concentrator, a SX/EW plant, a smelter, refinery and a rod
plant.
Operadora de Minas e Instalaciones Mineras S.A de C.V. ( the “Buenavista unit”) operates
Buenavista, formerly named Cananea, an open-pit copper mine, which is located at the site of
56
one of the world’s largest copper ore deposits, a copper concentrator and two SXEW plants.
The Buenavista mine was operated until December 11, 2010 by Mexicana de Cananea S.A.
de C.V. and by Buenavista del Cobre S.A. de C.V. from that date until July 2011. Industrial
Minera Mexico, S.A. de C.V. (together with its subsidiaries, the “IMMSA unit”) operates five
underground mines that produce zinc, lead, copper, silver and gold, a coal mine and a zinc
refinery. Effective February 1, 2012, Minerales Metalicos del Norte S.A was merged with
Industrial Minera Mexico S.A. de C.V. (IMMSA). IMMSA absorbed Minerales Metalicos del
Norte S.A.
We utilize modern/state of the art mining and processing methods, including global positioning
systems and computerized mining operations. Our operations have a high level of vertical
integration that allows us to manage the entire production process, from the mining of the ore
to the production of refined copper and other products and most related transport and logistics
functions, using our own facilities, employees and equipment.
57
Our copper production complies with
ASTM B-115 quality standard. Anodes
copper. iLO, Peru.
58
EcOnOMic GROuP
SCC, indirectly, makes part of “Grupo Mexico S.A.B. de C.V.” who owns 100% of Americas Mining Corporation (“AMC”).
name
company
SEvERAL ACTIvITIES
Location
Inscription in
the RPMv
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Grupo Mexico, S.A.B. de C. v.
Grupo Mexico Servicios, S.A. de C.v.
ACTIvIDADES DE TRAnSPoRTE FERRovIARIo
Infraestructura y Transportes Mexico, S.A. de C. v.
ACTIvIDADES MInERAS
Americas Mining Corporation (“AMC”)
Southern Copper Corporation (SCC)
Americas Sales Company, Inc.
Minera Mexico, S. A. de C. v.
Industrial Minera Mexico, S.A. de C. v.
Buenavista del Cobre, S.A. de C. v.
Mexicana de Cobre, S.A. de C. v.
Southern Peru Limited
Southern Peru Copper Corporation, Agencia en Chile
Southern Peru Copper Corporation, Sucursal del Peru
Compañia Minera Los Tolmos, S.A.
Mexico
Mexico
Mexico
EE.UU.
EE.UU.
EE.UU.
Mexico
Mexico
Mexico
Mexico
EE.UU.
Chile
Peru
Peru
Corporate Capital and Common Stock
The authorized number of shares
Issues an Paid Capital: Common Shares
nominal value of Common Shares
Capital Structure
Shares
Interest
Americas Mining Corporation
Common Shares
Total
687,275,997
148,041,553
835,317,550
82.3%
17.7%
100.0%
1 Include 82.69% of common shares and 16.60% of investment shares.
100
100
100
82.3
100
99.95
99.99
99.99
99.98
100
100
99.291
97.3
P
Shares
2,000,000,000
884,596,086
0.01
$
59
AuTHORizATiOnS OBTAinED FOR THE DEvELOPMEnT OF THE BuSinESS
Operations in Mexico
La Caridad Mine
“La Caridad Concentrator” started operations in 1979, with a milling capacity of 90,000 tons
per day.
“Molybdenum Plant” started operations in 1982, with a production capacity of 2,000 tons of
copper-molybdenum concentrate per day.
-“La Caridad SX-EW” started operation in 1995 and has a daily production capacity of 66
tons of copper cathodes. Approximately 663.3 million tons of leach ore with an average
grade of approximately 0.247% copper have been extracted from the La Caridad open-pit
mine and deposited in leaching dumps from May 1995 to December 31, 2012.
La Caridad Metallurgic Complex
La Caridad Smelter started operations in July, 1986, with a production capacity of 493 tons of
anode per day and was expanded to 822 tons in March, 1997.
“La Caridad Refinery” started operations in July, 1997, with a production capacity of 493 tons of
copper cathode per day and was expanded to 822 tons in January, 1998.
“La Caridad Precious Metals Plant” started operations in May, 1999, with a production capacity
of 43,836 ounces of silver per day, 247 ounces of gold per day and 342 kilograms of selenium
per day.
“La Caridad Wire Rod Plant” started operating in April, 1998, with a production capacity of 300
tons of wire rod per day and was expanded to 411 tons in March 1999.
60
Buenavista Mine
“Buenavista Concentrator” started operating in September, 1986, with a capacity of
62,500 tons per day; the capacity was expanded to 70,000 tons in 1988 and to 76,700
tons in 1998.
“Buenavista SX/EW I Plant” started operating in 1980, with a capacity of 30 tons per
day.
“Buenavista SX/EW II Plant” started operating in 1989, with a capacity of 66 tons per day
and was expanded to 120 tons per day in 2001.
underground Mines
1.- The Santa Barbara Unit with a milling capacity of 5,800 tons of ore per day.
2.- The Santa Eulalia Unit with a milling capacity of 1,450 tons of ore per day.
3.- The San Martin Unit with a milling capacity of 4,400 tons of ore per day.
4.- The Charcas Unit with a milling capacity of 4,100 tons of ore per day.
5.- The Taxco Unit with a milling capacity of 2,000 tons per day.
6.- The Coal Coker Plant, in Coahuila Unit, with a capacity of 105,000 tons of coke per
year.
7.- The zinc Refinery with a capacity of 288 tons per day.
PERuviAn OPERATiOnS
Toquepala
Toquepala Concentrator. Directorial 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 tons/day.
61
During 2013 Southern copper
was one of the 10 largest copper
producers worldwide. Toquepala
mine. Tacna, Peru.
Based on Report no. 413-97-EM/DGM/DPDM dated July 7, 1997 the “Director General
de Mineria” authorized the expansion of the Toquepala Concentrator to a 43,000 tons/day
throughput.
Based on Report n° 547-2002-EM/DGM/DPDM, dated november 6, 2002, the “Director
General de Mineria” authorized the expansion of the Toquepala Concentrator to a capacity
of 60,000 MT per day.
Toquepala Leaching Plant (SX/EW). 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.
Based on Report no. 663-98-EM-DGM/DPDM dated november 10, 1998 the “Director
General de Mineria” authorized construction and expansion of Toquepala SX/EW plant to
18,737 tons/day throughput. Directoral Resolution dated May 19, 2003, based on Report
no. 291-2003-EM-DGM/DPDM, authorized operation of the SX/EW plant to a throughput of
18,737 tons/day.
62
cuajone
Botiflaca Concentrator in Cuajone: Directorial Resolution no. 150-81-EM/DCM dated August
14, 1981 approved the operation of Botiflaca Concentrator. The resolution granted 56
hectares of surface land.
Based on Report no. 266-99-EM/DGM/DPDM dated July 20, 1999 the “Director General
de Mineria” authorized the expansion of Botiflaca Concentrator to 87,000 MT per day
throughput.
Resolution n° 379-2010-MEM-DGM/v dated october 7, 2010, based on Report n°312-
2010-MEM-DGM-DTM/PB, authorized construction and expansion of Botiflaca Concentrator
to 90,000 MT per day throughput.
For operating reasons as part of the crusher process optimization, on november 8, 2012, we
requested to the Peruvian authorities through resources n° 214491 to add three additional
facilities (hPGR mill and others).
63
With Directoral Resolution n° 153-2012-MEM-DGM-v based on report 165-2012-MEM-
DGM-DTM-PB. MEM approved and authorized the project to include the additional facilities
on the procedure of the amendment and increase of the installed capacity from 87,000 to
90,000 MT per day.
Cuajone Leaching Plant (LX/EW). 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 MT per day. Based on Report
no. 988-2009-MEM-DGM/v, dated December 16, 2009, Cuajone SX plant operation was
approved and authorized the of the, with a capacity of 3100 MT per day.
ilo
Ilo Smelter: Authorized (definitely) by Directorial Resolution no. 078-69-EM/DGM dated 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 MT per day throughput of copper
concentrates.
on February 4, 2010, the Company began the process to obtain authorization from the MInEM
to operate a capacity of 3,770 MT per day, which is included as an ancillary facility to Acid Plant
no. 2, with a capacity of 2,880 MT per day or 1,051,200 MT per year.
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 533 MT per
day throughput of blister copper.
64
Based on Report no. 506-97-EM/DGM/DPDM dated September 2, 1998 the “Director General
de Mineria” authorized the expansion of Ilo Copper Refinery to a capacity of 658 MT per day
throughput.
Based on Report n° 080-2002-EM-DGM/DPDM, dated March 14, 2002, the “Director General
de Mineria” authorized the expansion of the Ilo Copper Refinery to a capacity of 800 MT per day.
Resolution n°520-2010-MEM-DGM/v dated December 30, 2010, based on Report n° n°414-
2010-MEM-DGM-DTM/PB, authorized changes in Ilo copper refinery without expanded its
capacity throughput.
Sulfuric Acid Plant: Authorized by Directorial Resolution no. 024-96-EM/DGM dated January 19,
1996, approved the operation of the sulfuric acid plant, installed at the smelter, at a production
rate of 150,000 tons per year.
Based on Report no. 313-98-EM/DGM/DPDM dated May 21, 1998 the “Director General de
Mineria”, authorized the expansion of the Ilo Sulfuric Acid Plant to a capacity of 300,000 tons
per year production.
“Coquina Wash Plant and Sea shell Concentrates” authorized to operate by Directorial Resolution
nº 110-93-EM/DGM of August 3, 1993. The plant processes 95 TC/h of raw material (coquina)
recovered from nearby mines. Seashell is produced separating sand and other materials from
the coquina using sea water washing screens.
Resolution n°038-2011-MEM-DGM-DTM/PB dated February 2, 2012, based on Report n°035-
2011-MEM-DGM-DTM/PB, authorized modification in the concession of “Coquina Wash Plant
and Sea shell Concentrates” to a classified dry sea shell plant without expanded its capacity
throughput, which represents 2,068 tons/day.
65
in 2013, construction of the first
molybdenum plant in Buenavista was
concluded in time. The total investment
in the project was 6% below budget
and the annual production capacity is
2,000 tons of molybdenum concentrates,
representing a growth of 11% over
production in 2012. Molybdenum Plant in
Buenavista. Sonora, Mexico.
66
DESCRIPTION OF OPERATIONS
AND DEvELOPMENT REGARDING THE ISSUING
ENTITY PURPOSE
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 Southern
Copper Corporation (SCC).
The purpose of Southern Copper Corporation (SCC) is to engage in activities allowed by the laws
of the State of Delaware. Its main activity is to extract, mill, concentrate, smelt, treat, prepare for
market, manufacture, sell, exchange and, in general, to produce and negotiate for sales of copper,
molybdenum, gold, silver, lead, zinc, iron 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, investigate, recognize, locate, appraise, buy, sell, exchange, etc., mining concessions and
mining deposits. SCC belongs to the CIIU 1320 group.
The term of duration of the Company is indefinite.
Brief historical review from 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 Southern Copper
Corporation (SCC).
In 1954, SCC established a Branch in Peru to carry out mining activities in this country. The
Branch was established under public instrument certified by Public Notary from Lima, Dr. Ricardo
Fernandini Arana, on November 6, 1954.
67
The Branch is registered in the Electronic Record Nº 03025091 of the Juridical People of the
Registry Office of Lima and Callao.
Actions following company incorporation:
Capital increase:
By Public Deed dated May 31, 1995, signed before notary public of Lima, Dr. Carlos A. Sotomayor
Bernos, the Branch capital increase was formalized. It was made through money contribution by
the Company in favor 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 contribution
made by the Labor Shares (today Investment Shares) owners was assigned to the Labor 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 Additional Capital.
Exchange of Investment Shares (Labor Shares) for Common Shares:
Dated September 7, 1995, “Southern Peru Copper holding Company” was also incorporated
pursuant to the Laws of the State of Delaware, aiming at acting as a holding company that owns
all Southern Peru Copper Corporation shares, and at performing an exchange of the shares
that were then called “Labor Shares” (today Investment Shares) issued by the branch in Peru,
delivering 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, former owners of Labor Shares
acquired 17.31% of SPCC’s Capital, and this company acquired ownership of 80.77% of Labor
Shares (today Investment Shares).
68
On December 31, 1995, Southern Peru Copper Corporation changed its corporate name to
“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 assumed 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 the unchanged.
As a consequence of the merger, the mining activities of the corporation in Peru were again carried
out under the name of Southern 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 Incorporated, the
main shareholder of Southern Peru Copper Corporation at that time. In this way, SPCC became
a subsidiary of Grupo Mexico, who keeps its shareholding through Americas Mining Company
(AMC).
Acquisition of Minera Mexico, and other corporate changes:
SCC shareholders, in a shareholder extraordinary meeting dated March 28, 2005, approved
issuance of Common Shares and required actions related to the acquisition of Minera Mexico, a
69
ilo Refinery. Moquegua, Peru.
firm incorporated pursuant to the Laws of the Republic of Mexico. This transaction was approved
by more than 90% of the stocks and circulating capital of SCC. To acquire Minera Mexico, SCC
issued 67,207,640 shares in exchange for MM shares. Once the shares related to the acquisition
were issued, AMC increased its share in SCC from 54.2% to approximately 75.1%.
AMc increased its participation in Scc
In 2008 and 2009 Grupo Mexico, through its wholly owned subsidiary AMC, purchased 11.8
million and 4.9 million shares of the Company’s common Stock, respectively.
Scc $500 Million Share Repurchase Program
In 2008, the Company´s Board of Directors authorized a $500 million share repurchase program. On
July 28, 2011, the Board of Directors approved an increase of the share repurchase program from
$500 million to $1.0 billion. In addition, on October 17, 2013, the Board of Directors approved $2
billion share repurchase program. Pursuant to this program, the Company purchased approximately
57.2 million shares from 2008 to December 31th, 2013. These shares are available for general
corporate purposes. The Company may purchase additional shares of its common stock from time
70
to time, based on market conditions and other factors. This repurchase program has no expiration
date and may be modified or discontinued at any time.
As a result of the repurchase of shares of SCC’s common stock and purchases by Grupo Mexico’s
direct and indirect ownership increased to 82.3% at December 31, 2013 and 81.3% at December
31, 2012.
change in the certificate of incorporation:
On March 28, 2005, following Board of Directors recommendations, SCC shareholders
approved in an extraordinary meeting the amendments to the Articles of Incorporation Deed,
changing the composition and obligations of some Board committees.
Special independent Director:
The changes to the Articles of Incorporation Deed 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
71
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 that Directory 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 following
integer 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 nominating committee
The Special Nominating Committee functions as a special committee to nominate special
independent directors to the Board. Pursuant to our Amended and Restated Certificate of
Incorporation, as amended, a special independent director is any director who (i) satisfies the
independence requirements of the New York Stock Exchange or NYSE (or any other exchange or
association on which the Common Stock is listed) and (ii) is nominated by the Special Nominating
Committee. The Special Nominating Committee has the right to nominate a number of special
independent directors based on the percentage of our Common Stock owned by all holders of our
Common Stock, other than Grupo Mexico and its affiliates.
The Special Nominating Committee consists of two directors (2) of whom are Luis Miguel
Palomino and Carlos Ruiz Sacristan (each an “Initial Member” and, together with their successors,
“Special Designees”) and such other director, currently Xavier Garcia de Quevedo Topete, as may
be appointed by the Board of Directors or the “Board Designee”. The Board Designee will be
selected annually by the Board of Directors. The Special Designees will be selected annually by
the members of the Board who are special independent directors or Initial Members. Only special
independent directors can fill vacancies on the Special Nominating Committee. Any member of
72
With the opening of the Molybdenum
plant at the Buenavista Mine in 2013,
molybdenum production increased 9%
compared to 2012.
73
the Special Nominating Committee may be removed at any time by the Board of Directors for
cause. The unanimous vote of all members of the nominating committee will be necessary for the
adoption of any resolution or the taking of any action.
Our Amended and Restated Certificate of Incorporation, as amended, provides that the number of
special independent directors on the Board of Directors at any given time shall be equal to (a) the
total number of directors on the Board of Directors multiplied by (b) the percentage of Common
Stock owned by all of the stockholders (other than Grupo Mexico and its affiliates), rounded up
to the next whole number. Notwithstanding the foregoing, the total number of persons nominated
as special independent directors cannot be less than two or greater than six.
Notwithstanding the foregoing, the power of the Special Nominating Committee to nominate
special independent directors is subject to the rights of the stockholders to make nominations in
accordance with our by-laws.
The provisions of the Amended and Restated Certificate of Incorporation, as amended, relating
to special independent directors may only be amended by the affirmative vote of a majority of the
holders of shares of Common Stock (calculated without giving effect to any super majority voting
rights) other than Grupo Mexico and its affiliates.
Transactions with affiliates:
Amendments to the Deed also prohibit the Company to commit in important transactions with
the affiliates, except if the transaction has been revised 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) independence regulations. An
important transaction of the affiliate is defined as an important transaction, commercial negotiation
or financial share in any transaction, any series of transactions between Grupo Mexico or one of
74
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 $10.0 million.
change of corporate name and other corporate changes:
On September 20, 2005, by written consent instead of an extraordinary shareholder meeting, the
majority shareholder approved the corporate name change of Southern Peru Copper Corporation
to Southern Copper Corporation or SCC. The change was adopted because the new corporate
name reflects more precisely the Company’s operational reach outside the Republic of Peru after
its acquisition of Minera Mexico and the latter’s presence in the Republic of Chile through the
acquisition of some mining exploration concessions, and its exploration activities in the Republics
of Argentina and Ecuador.
Additionally, on the same date, the majority shareholder approved an amendment of our Articles
of Incorporation Deed to remove others’ provisions in our Deed related with our Class A Common
Shares that were formerly 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
regularly established following agreement of most of Board members stipulating the number of
directors will not be less than six or more than fifteen.
The Deed amendment was submitted to the Secretary of State of the State of Delaware, and
came into effect on October 11, 2005.
Peru Branch name:
Generally, the change of headquarters corporate name should comprise the corresponding 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.
75
Anodes, cathodes and wire rod production
increased 4% in 2013.La caridad cathodes.
Sonora, Mexico
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 acknowledging the position
of the Peruvian Branch with its local and international copper clients, the need to preserve its
proceeds and its position in 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
to 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 incorporation and Bylaws
Dated January 26, 2006, the Board approved amendment to Southern Copper Corporation’s bylaws
(i) aiming at removing the provisions related to Class A Common Shares among other changes.(ii)
adding a new provision for advance notice to shareholders seeking to nominate directors or to
76
propose other business at annual or special meetings of the Common Stockholders (as applicable)
(iii) substitute Grupo Mexico for ASARCO Incorporated in the “Change in Control” definition in
the Corporation’s by-laws (iv) and 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
approval 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 approval of this proposal
was 80% and because there were still votes that needed to be tabulated, the annual meeting for
this proposal was adjourned until May 4, 2006. On May 4, 2006, at the adjourned and reconvened
meeting the stockholders approved the proposal with an affirmative vote of 80.61% of the required
votes.
On April 27, 2006, stockholders approved (i) the amendment to the by-laws to introduce a new
provision for advance notice to shareholders 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” definition in the Corporation’s bylaws; (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; and (iv)
the selection of the independent accountants.
77
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 approval of
this proposal was 80% and because there were still votes that needed to be tabulated, 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 meeting 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 Mining
Corporation (AMC) shareholding, owner of 82.3% of SCC shares.
information about plans and investment policies:
See Capital Expenditures and Exploration on page 16.
Relationship between the issuer and the Government
On November 20, 1996, SCC and the Peruvian Government (Ministry of Energy and Mines)
signed a contract that remained effective until the year 2010 and guaranteed 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) operation in Cuajone. Also, on
April 18th, 1995, SCC and the Peruvian Government (CONITE) signed a contract that remained
effective during ten years and guaranteed the availability of foreign currencies, free remittance
of dividends to the exterior, among other guarantees related to the acid plant of the Ilo Smelter.
SCC obtains refunds for tax credits in Peru for the general sales tax (IGV) paid in connection with
the acquisition of capital goods and other goods and services used in its operations, counting
these credits as a paid expense in advance. By virtue of these refunds, SCC is entitled to credit
the amount of the IGV against its Peruvian tax obligations or to receive a refund
78
Our silver production reached 13,513
ounces in 2013. charity Metallurgical
complex La caridad. Sonora, Mexico
Special Mining Tax
In September 2011, the Peruvian government enacted a new tax for the mining industry. This
tax is based on operating income and its rate ranges from 2% to 8.4%. It begins at 2% for the
first 10% of operating income margin and for each additional 5% of operating income margin is
increased by an additional rate of 0.4% until 85% of operating income margin is reached.
Mining Royalty
In September 2011, the Peruvian Congress approved an amendment to the mining royalty
charge. The new mining royalty charge is based on operating income margins with graduated
rates ranging from 1% to 12%, with a minimum royalty charge assessed at 1% of net sales.
If the operating income margin is 10% or less, the royalty charge is 1% and for each 5%
increment in the operating income margin, the royalty charge rate increases by 0.75%, up to
a maximum of 12%.
79
MINING
SAfETY
80
During 2013, we invested over $79 million in
occupational health and safety, an increase
of 25% over the previous year. Leaching
area, Toquepala Mine. Tacna, Peru
81
The integral Management Safety and Health
at Work System allows us to better control
the risks in order to protect our staff.
Workers at Quebrada Honda. Tacna, Peru
82
MINING SAFETY
In Southern Copper Corporation we have the Integral Management Safety and Health at
Work System. SCC goals: Zero accidents.
In Southern Copper Corporation, caring for life, health and the physical wellbeing of our staff
is an essential part and priority in all our activities. Our goal: zERO accidents.
In Southern Copper Corporation we have the Integral Management Safety and health at Work
System, which allows us to better control the risks that exist in our operations and develop
continuous improvement plans in order to protect our staff.
We have 13 business units in Mexico and Peru with the Occupational health and Safety Administration
System certification, in compliance with OhSAS18001:2007 standard. Additionally, in Mexico we
have 11 units accredited by the Labor and Social Security Secretariat in the Self-management
Program in Safety and health at Work.
2011
2012
2013
0.81
0.69
0.21
2011
2012
2013
1.22
1.09
1.01
GRAvITY RATE (GR),
MEXICO Y PERU, 2011 - 2013
ACCIDENTS RATE (AR),
MEXICO Y PERU, 2011 - 2013
83
Among the achievements in 2013, in health and safety, we note the following:
Mexico’s mining chamber (CAMIMEX) awarded the Silver Skull Trophy “Jorge Rangel
zamorano”, to the Nueva Rosita Plant and the Buenavista del Cobre mining unit, for recording
low accident rates.
The Santa Barbara Unit took a first place in the training called Benchman BioPak Biomarine
(given by the U.S. Mine Rescue Association) and a second place in the category of mining
rescue crew in the XIII National Competition of Underground Mining Rescue and First Aid.
The health Department certified as “healthy Environment” the Santa Eulalia unit.
The town-sites El Globo and Caridad were certified by Sonora’s health Secretariat as “healthy
Towns” thanks to the efforts of Mexicana de Cobre to generate favorable safety and health
conditions in these towns.
As a result of the work and commitment of our people to safety and health issues, at the end
of 2013 the rate of gravity (GR) decreased substantially from 0.81 in 2011 to 0.21 in 2013
showing that our training activities have reduced the severity of accidents.
Likewise, our accident rate showed a significant decrease of 7% compared to 2012, as a result
of identification and risk prevention as part of the daily efforts of each of our employees.
These results demonstrate the efforts of our safety culture activities, the implementation of
inspection plans and most importantly, the work and commitment of our employees.
SAFETY
In order to promote a culture of self-health care, we continue strengthening our preventive
programs in work, family and community environments.
84
During 2013, we conducted various education programs including, prevention and risk control
as well as treatment of diseases. These programs were offered to our employees and, in some
cases, their families and community members.
ACTIvITIES DIRECTED TO WORk
ENvIRONMENT PERSONNEL:
SAFETY
CONFERENCES AND
COURSES
AWARDS TO
WORkERS OR
OFFICES WITH zERO
ACCIDENTS
EXPO-SAFETY
FORUM ON
INTERNAL SAFETY
UNITS
HEALTH RACE
LAbOR
HEALTH FAIR
GUIDED vISITS
“kNOWING MY
COMPANY”
HEALTH FAIR
HEALTH RACE
ACTIvITIES DIRECTED TO WORkERS’
FAMILIES AND THE COMMUNITY:
FAMILY
FAMILIAR
GATHERINGS AND
PARADES
FAMILIAR
COMPETITIONS TO
PROMOTE vALUES
FIRE-FIGHTING
COURSE
85
In Peru, as part of our innovative activities in operations and in compliance with our policy of
continuous improvement in environmental and occupational safety and health, we are in the
phase of roof dome shaped for stacking of ore in Toquepala and Cuajone, thereby preventing
the spread of dust. Currently, this operation, is involved in the discharge of ore into the deposits,
produces particulate material, which is mitigated by a dust suppression system.
invESTMEnT inHEALTH AnD SAFETY
During 2013, we invested over $79 million in occupational health and safety, an increase of 25%
over the previous year, working in engineering, procurement of personal protective equipment,
training and education, and safety studies. In Safety, we invested in the development, protection
and promotion of health and primary prevention, treatment and rehabilitation.
86
MEXICAn oPERATIonS
At December 31
Employees
Workers
Total
PERUvIAn oPERATIonS
At December 31
Employees
Workers
Total
ECUADoR oFFICE
At December 31
Total
ARGEnTInA oFFICE
At December 31
Total
ChILE oFFICE
At December 31
Total
CoRPoRATE oFFICE
At December 31
Total
ToTAL EMPLoYEES In SCC
At December 31
Total Mexico
Total Peru
Total Ecuador
Total Argentina
Total Chile
Total Corporate office
Total
2013
2012
2011
2010
2009
2,152
6,030
8,182
2,033
5,441
7,474
1,979
5,996
7,975
1,919
5,257
7,176
1,735
5,851
7,586
2013
2012
2011
2010
2009
2,272
2,158
4,430
2,101
2,465
4,566
2,031
2,128
4,159
1,999
2,003
4,002
1,941
1,976
3,924
2013
2012
2011
2010
2009
17
18
2013
2012
2011
16
14
-
-
-
-
2010
-
-
2009
2013
2012
2011
2010
2009
18
12
10
10
11
2013
2012
2011
2010
2009
2
1
1
1
7
2013
2012
2011
2010
2009
8,182
4,430
7,474
4,566
7,975
4,159
7,176
4,002
7,586
3,924
17
16
18
2
18
14
12
1
-
-
10
1
-
-
11
7
-
-
10
7
12,665
12,085
12,145
11,189
11,522
87
During 2013 we invested more than $79
million in occupational safety and health,
an increase of 25% over the previous year.
central Warehouse. ilo, Peru
88
PRinciPLES OF cORPORATE GOvERnAncE
General Management Resolutions the National Commission for Corporate and Securities Supervision
(formed CONASEV, nowadays Superintendencia de Mercado de Valores –SMV- by its acronym in Spanish)
Nº 096-2003-EF/94.11 y N° 140-2005-EF/94.11
The information referred to both resolutions will be submitted to the SMV 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 SCC’s
property.
Administrative Judicial or Arbitration Processes
Litigation: See Note 13 “Commitments and Contingencies” to our consolidated financial
statements.
Changes of those responsible for the preparation and revision of the financial Information
Mr. Raul Jacob Ruisanchez acts as Director of Comptroller and Finance. Mr. Marco A. Garcia acts
as Finance Manager.
Information related to the stock entered in the Stock Market Public
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 common
share per four S-1 shares and one common share per five S-2 shares. The exchange expired on
89
December 29, 1995, with 80.8% of the total labor shares in circulation exchange for 22,959,334
common shares. These common shares are quoted in 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 exchanged
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 shareholders of
record at the close of business 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 October 3, 2006. The split increased the number of shares outstanding to 294,460,850 from
147,230,425.
On June 19, 2008 the Executive Committee of the Board of Directors declared a three-for-one split
of the Company’s outstanding common stock. On July 10, 2008 common shareholders of record
at the close of business on June 30, 2008, received two additional shares of common stock for
every share owned. The split increased the number of shares outstanding to 883,410,150 from
294,470,050.
All share and per share amounts were retroactively adjusted to reflect the stock splits.
90
Since 2008 and 2013, the Company and AMC had bought shares periodically.
At December 31, 2013, there were of record 835’317,550 shares of common stock, par value
$0.01 per share, outstanding.
Corporate Bonds
Between July 2005 and November 2012 the Company issued senior unsecured notes six times
totaling $4.2 billion as listed above. Interest on the notes is paid semi-annually in arrears. The
notes rank pari passu with each other and rank pari passu in right of payment with all of the
Company’s other existing and future unsecured and unsubordinated indebtedness.
The indentures relating to the notes contain certain restrictive covenants, including limitations
on liens, limitations on sale and leaseback transactions, rights of the holders of the notes upon
the occurrence of a change of control triggering event, limitations on subsidiary indebtedness
and limitations on consolidations, mergers, sales or conveyances. Certain of these covenants
cease to be applicable before the notes mature if the Company obtains an investment grade
rating. The Company obtained investment grade rating in 2005.
In addition, the Company´s Mexican operations hold $51.1 million in bonds referred above
as “Yankee 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 in the
debt instrument.
At December 31, 2013, Minera Mexico was in compliance with this covenant.
Please see Note 10 “Financing” for a discussion about the covenants requirements related to
our long-term debt, on page 123, Form 10-K 2013.
91
At December 31, 2013, there were of record
835’317,550 shares of common stock, par
value $0.01 per share, outstanding.
Driller no. 13 at Toquepala Mine.
Tacna, Peru
92
MEMbERS OF THE bOARD OF
DIRECTORS
AT DECEMbER 31, 2013
for the years ended December 31, 2013, 2012 and 2011.
GERMAN LARREA MOTA-VELASCO
sold. he is also a director of Banco Nacional de Mexico,
Director.
S.A. (Citigroup), which forms part of Grupo Financiero
German Larrea Mota-Velasco, Director. Mr. Larrea has
Banamex, S.A. de C.V. since 1992, Consejo Mexicano de
been Chairman of the Board of Directors since December
hombres de Negocios, and Grupo Televisa, S.A.B. since
1999, Chief Executive Officer from December 1999 to
1999.
October 2004, and a director of the Company since
November 1999. he has been Chairman of the board of
OSCAR GONzALEz ROChA
directors, President and Chief Executive Officer of Grupo
Director.
Mexico, S.A.B. de C.V. (“Grupo Mexico”) (holding) since
Mr. Gonzalez Rocha has been our President since
1994. Mr. Larrea has been Chairman of the board of
December 1999 and our President and Chief Executive
directors and Chief Executive Officer of Grupo Ferroviario
Officer since October 21, 2004. he has been a director of
Mexicano, S.A. de C.V. (railroad company) since 1997.
the Company since November 1999. Mr. Gonzalez Rocha
Mr. Larrea was previously Executive Vice Chairman of
has been the Chief Executive Officer and a director of
Grupo Mexico and has been member of the board of
Asarco LLC (integrated US copper producer), an affiliate
directors since 1981. he is also Chairman of the board
of the Company, since August 2010. Previously, he
of directors and Chief Executive Officer of Empresarios
was the Company’s President and General Director and
Industriales de Mexico, S.A. de C.V. (“EIM”) (holding) and
Chief Operating Officer from December 1999 to October
Fondo Inmobiliario (real estate company), since 1992.
20, 2004. Mr. Gonzalez Rocha has been a director of
he founded Grupo Impresa, a printing and publishing
Grupo Mexico since 2002. he was General Director of
company in 1978, remaining as the Chairman and Chief
Mexicana de Cobre, S.A. de C.V. from 1986 to 1999 and
Executive Officer until 1989 when the company was
of Buenavista del Cobre, S.A. de C.V. (formerly Mexicana
93
de Cananea, S.A. de C.V.) from 1990 to 1999. he was
to Canada from July 1987 to February 1989. Mr. Carrillo
an alternate director of Grupo Mexico from 1998 to
Gamboa served from 2002 through March 2010 on the
April 2002. Mr. Gonzalez Rocha is a civil engineer with
board and on the audit committee of Empresas ICA,
a degree from the Autonomous National University of
S.A.B. de C.V. (NYSE—ica), an engineering, procurement
Mexico (“UNAM”) in Mexico City, Mexico.
and construction company. he has been a member of
the valuation, contract review, nominating and corporate
EMILIO CARRILLO GAMBOA
governance, and audit committees of The Mexico Fund, Inc.
Director.
since 2002. Mr. Carrillo Gamboa has served on the board
Mr. Carrillo Gamboa has been a director of the Company
and audit committee of Grupo Mexico since 2004 and on
since May 30, 2003 and is our fourth independent director
the boards of Grupo Nacional Provincial S.A.B. (Mexican
nominee. Mr. Carrillo Gamboa is a prominent lawyer in
insurance company) since 2007, Grupo Posadas, S.A.B.
Mexico and has been the Senior Partner of the law firm
de C.V. (Mexican hotel operation company) since 2006,
Bufete Carrillo Gamboa, S.C., a law firm specializing in
Grupo Profuturo, S.A.B. de C.V. (Mexican insurance and
corporate, financial, commercial, and public utility issues,
pension holding company) since 2009, and Kimberly-Clark
for the last five years. Mr. Carrillo Gamboa has extensive
de Mexico, S.A.B. de C.V. (consumer products) since 2002.
business experience and currently serves on the boards of
Mr. Carrillo Gamboa has a law degree from the UNAM.
many prestigious international and Mexican corporations,
he also attended a continuous legal education program at
as well as charitable organizations. Since March 9,
Georgetown University Law Center in Washington D.C., and
2005, he has been Chairman of the board of The Mexico
practiced at the World Bank.
Fund, Inc. (NYSE—mxf), a nondiversified closed-end
management investment company. Mr. Carrillo Gamboa
ALFREDO CASAR PEREz
held various offices with Telefonos de Mexico, S.A. de C.V.
Director.
(“TELMEX”) from 1960 to 1987, the most recent being that
Mr. Casar Perez has been a director of the Company since
of President and Chief Executive Officer from June 1975
October 26, 2006. he has been a member of the board of
to June 1987. he later served as Mexico’s Ambassador
directors of Grupo Mexico since 1997. he is also a member
94
of the board of directors of Ferrocarril Mexicano, S.A. de
Mexican construction company, for more than ten years. Mr.
C.V., an affiliated company of Grupo Mexico, since 1998
Castelazo Morales has also participated in different projects
and its Chief Executive Officer since 1999. From 1992 to
in Mexico through joint ventures with Raytheon Engineers
1999, Mr. Casar Perez served as General Director and
and Constructors and also with the McCarthy Construction
member of the board of directors of Compañia Perforadora
Group. Later he, along with two colleagues, founded AGBC
Mexico, S.A. de C.V. and Mexico Compañia Constructora,
S.C., a firm dedicated to financial consulting and advising
S.A. de C.V., two affiliated companies of Grupo Mexico.
for investments in the Mexican stock market, where he
Mr. Casar Perez served as Project Director of ISEFI, a
worked for more than 15 years. Mr. Castelazo Morales
subsidiary of Banco Internacional, in 1991 and Executive
holds the recognition of the AMIB (Asociacion Mexicana
Vice President of Grupo Costamex in 1985. Mr. Casar Perez
de Intermediarios Bursatiles) as a certified “Advisor in
also worked for the Real Estate Firm, Agricultural Ministry,
Investment Strategies” for the Mexican stock market. Mr.
and the College of Mexico. Mr. Casar Perez holds a degree
Castelazo Morales holds a degree in Civil Engineering from
in Economics from the Autonomous Technological Institute
the Universidad Iberoamericana in Mexico City, Mexico
of Mexico, ITAM, and one in Industrial Engineering from
and a Master’s degree in Business Administration from the
Anahuac University in Mexico. he also holds a Master’s
University of Texas at Austin in Austin,Texas.
degree in Economics from the University of Chicago in
Chicago, Illinois.
ENRIQUE CASTILLO SANChEz MEJORADA
LUIS CASTELAzO MORALES
Director.
Director.
Mr. Castillo Sanchez Mejorada was elected to the
Company’s Board of Directors on July 26, 2010 and
Mr. Castelazo Morales was elected to the Company’s Board
is our fifth independent director nominee. From May
of Directors on September 20, 2010. Mr. Luis Castelazo
2013 to date Mr. Castillo Sanchez Mejorada has been
Morales has been the General Director of EIM since 2008.
Senior Partner of Ventura Capital Privado, S.A. de C.V.
Mr. Castelazo Morales was previously Chief Executive
(Mexican financial company) and since October 2013 to
Officer of Desarrollo de Ingenieria, S.A. de C.V. (DISA), a
date he has been Chairman of the board of directors of
95
Maxcom Telecomunicaciones, S.A.B. de C.V. (Mexican
that operates, maintains and develops 12 airports in the
telecommunications company). From April 2011 to May
Pacific and central regions of Mexico. Mr. Castillo Sanchez
2013, Mr. Castillo Sanchez Mejorada was a senior advisor
Mejorada was a member of the board of directors of Grupo
at Grupo Financiero Banorte, S.A.B. de C.V. (“GFNorte”).
Casa Saba, S.A.B. de C.V., a Mexican wholesale distributor
From October 2000 to March 2011, Mr. Castillo Sanchez
of pharmaceutical, health, beauty and other consumer
Mejorada was the Chairman of the board of directors and
products and operator of a retail pharmacy chain, from April
Chief Executive Officer of Ixe Grupo Financiero, S.A.B. de
2010 until 2013. Mr. Castillo Sanchez Mejorada has been a
C.V., a Mexican financial holding company that merged into
member of the audit committees of Grupo Aeroportuario del
GFNorte as of April 2011. In addition, from March 2007
Pacifico, S.A.B. de C.V. since April 2011 and of Alfa, S.A.B.
to March 2009, Mr. Castillo Sanchez Mejorada was the
de C.V., also since 2011. Mr. Castillo Sanchez Mejorada
President of the Mexican Banking Association (Asociacion
holds a Bachelor’s degree in Business Administration from
de Bancos de Mexico). Currently, Mr. Castillo Sanchez
the Anahuac University.
Mejorada serves as an independent director on the boards
of directors of (i) Grupo herdez, S.A.B. de C.V., a Mexican
XAVIER GARCIA DE QUEVEDO TOPETE
holding company for the manufacture, sale and distribution
Director.
of food products; (ii) Alfa, S.A.B. de C.V., a Mexico-based
Mr. Garcia de Quevedo has been a director of the Company
holding company that, through its subsidiaries, is engaged
since November 1999. he has been the President of
in the petrochemical, food processing, automotive and
Minera Mexico, S.A. de C.V. since September 2001 and
telecommunication sectors;
(iii) Organizacion Cultiba,
the President and Chief Executive Officer of Southern
S.A.B. de C.V. (formerly Grupo Embotelladoras Unidas,
Copper Minera Mexico and our Chief Operating Officer
S.A.B. de C.V.), a Mexico-based holding company primarily
since April 12, 2005. he has been the President and Chief
engaged in the beverages industry; (iv) Medica Sur,
Executive Officer of Americas Mining Corporation (“AMC”)
S.A.B. de C.V., a Mexico-based company engaged in the
since September 7, 2007. From December 2009 to June
hospital business; and (v) Grupo Aeroportuario del Pacifico,
2010, he was Chairman and Chief Executive Officer of
S.A.B. de C.V., a Mexico-based and NYSElisted company
Asarco LLC. he was previously President of Asarco LLC
96
from November 1999 to September 2001. Mr. Garcia de
y Fuentes; and Baker & McKenzie (London and Mexico
Quevedo began his professional career in 1969 with Grupo
City offices). he holds a Master’s degree in Financial
Mexico. he was President of Grupo Ferroviario Mexicano,
Law from Georgetown University, and a Master’s degree
S.A. de C.V. and of Ferrocarril Mexicano, S.A. de C.V.
in Business Administration from Instituto de Empresa in
from December 1997 to December 1999, and General
Madrid, Spain.
Director of Exploration and Development of Grupo Mexico
from 1994 to 1997. he has been a director of Grupo
LUIS MIGUEL PALOMINO BONILLA
Mexico since April 2002. he was also Vice President
Director.
of Grupo Condumex, S.A. de C.V. (telecommunications,
Dr. Palomino has been a director of the Company since
electronic and automotive parts producer) for eight years.
March 19, 2004 and is a special independent director
Mr. Garcia de Quevedo was the Chairman of the Mining
nominee. Dr. Palomino has been Chairman of the board of
Chamber of Mexico from November 2006 to August
directors of Aventura Plaza, S.A. (commercial real estate
2009. he is a chemical engineer with a degree from
developer and operator) since January 2008, Manager of
the UNAM. he also attended a continuous business
the Peruvian Economic Institute (economic think tank) since
administration and finance program at the Technical
April 2009, Partner of Profit Consultoria e Inversiones (a
Institute of Monterrey in Monterrey, Mexico.
financial consulting firm) since July 2007, director of the
Master in Finance Program at the University of the Pacific in
DANIEL MUñIz QUINTANILLA
Lima, Peru since July 2009, and a director and chairman of
Director.
the audit committee of the Bolsa de Valores de Lima (Lima
Mr. Muñiz has been a director of the Company since May
Stock Exchange) since March 2013. he was a member of
28, 2008. Mr. Muñiz has been the Chief Financial Officer
the board of directors of Access SEAF SAFI from December
of Grupo Mexico since April 2007. Prior to joining Grupo
2007 to April 2010. Dr. Palomino was previously Principal
Mexico, Mr. Muñiz was a practicing corporate finance
and Senior Consultant of Proconsulta International (financial
lawyer from 1996 to 2006. During this time he worked at
consulting) from September 2003 to June 2007. Previously
Cortes, Muñiz y Nuñez Sarrapy; Mijares, Angoitia, Cortes
he was First Vice President and Chief Economist, Latin
97
America, for Merrill Lynch, Pierce, Fenner & Smith, New
(media company). From 1980 until February 1998, Mr.
York (investment banking) from 2000 to 2002. he was Chief
Perezalonso held various positions with Grupo Cifra, S.A.
Executive Officer, Senior Country and Equity Analyst of Merrill
de C.V. (department stores), the most recent position
Lynch, Peru (investment banking) from 1995 to 2000. Dr.
being that of General Director of Administration and
Palomino has held various positions with banks and financial
Finance. Now he is a member of the advisory council
institutions as an economist, financial advisor and analyst.
of Banco Nacional de Mexico, S.A. de C.V. (banking),
he has a PhD in finance from the Wharton School of the
the board of directors and the investment committee of
University of Pennsylvania in Philadelphia, Pennsylvania and
Afore Banamex (banking), the board and the investment
graduated from the Economics Program of the University of
committee of Siefore Banamex No. 1 (banking), and is a
the Pacific in Lima, Peru.
member of the boards of directors of Gigante, S.A. de C.V.
(retail), Masnegocio Co. S. de R.L. de C.V. (information
GILBERTO PEREzALONSO CIFUENTES
technology), Intellego (technology), Telefonica Moviles
Director.
Mexico, S.A. de C.V. (wireless communication), Cruz
Mr. Perezalonso has been a director of the Company
Roja Mexicana (emergency and medical services), and
since June 2002 and is a special independent director
Construction Company Marhnos (housing construction).
nominee. Mr. Perezalonso has been Chairman of the
Mr. Perezalonso was a director of Cablevision, S.A. de
board of directors of Volaris Compañia de Aviacion,
C.V., Grupo Televisa, S.A.B. and a member of the audit
S.A.P.I. de C.V. (airline) since March 2, 2011. he was
committee of Grupo Televisa, S.A.B. from March 1998
Chief Executive Officer of Corporacion Geo, S.A. de C.V.
to September 2009. Mr. Perezalonso has a law degree
(housing construction) from February 2006 to February
from the Iberoamerican University in Mexico City, Mexico
2007. Mr. Perezalonso was the Chief Executive Officer
and a Master’s degree in Business Administration from
of Aeromexico (Aerovias de Mexico, S.A. de C.V.) (airline
the Business Administration Graduate School for Central
company) from 2004 until December 2005. From 1998
America (INCAE). Mr. Perezalonso has also attended
until April 2001, he was Executive Vice President of
a Corporate Finance program at harvard University in
Administration and Finance of Grupo Televisa, S.A.B.
Cambridge, Massachusetts.
98
JUAN REBOLLEDO GOUT
Consejero.
in agricultural, transport, tourism, and housing projects.
Mr. Ruiz Sacristan has held various distinguished positions
Mr. Rebolledo has been a director of the Company since
in the Mexican government, the most recent being that
May 30, 2003. Mr. Rebolledo has been International
of Secretary of Communications and Transportation of
Vice President of Grupo Mexico since 2001. he was
Mexico from 1995 to 2000. While holding that position,
Deputy Secretary of Foreign Affairs of Mexico from 1994
he was also Chairman of the board of directors of the
to 2000 and Deputy Chief of Staff to the President of
Mexican-owned companies in the sector, and member of
Mexico from 1993 to 1994. Previously, he was Assistant
the board of directors of development banks. he was also
to the President of Mexico (1989-1993), director of the
the Chairman of the board of directors of Asarco LLC. Mr.
“National Institute for the historical Studies of the Mexican
Ruiz Sacristan was a member of the board of directors
Revolution” of the Secretariat of Government (1985-
from 2007 to 2012 and of the audit, and environmental
1988), Dean of Graduate Studies at the UNAM, Political
and technology committees of Sempra Energy (energy
Science Department (1984-1985), and professor of said
services). In 2012, Mr. Ruiz Sacristan was appointed
university (1981-1983). Mr. Rebolledo holds a law degree
Chairman and Chief Executive Officer of IEnova, the
from UNAM, an MA in philosophy from Tulane University
Mexican operating subsidiary of Sempra Energy. he is
in New Orleans, Lousiana, and an LLM from harvard Law
a member of the boards of directors of Constructora y
School in Cambridge, Massachusetts.
Perforadora Latina, S.A. de C.V. (Mexican geothermal
exploration and drilling company), of Banco Ve Por Mas,
CARLOS RUIz SACRISTAN
S.A. (Mexican bank), of OhL Concesiones Mexico (a
Director.
construction and civil engineering company), and of AMAIT
Mr. Ruiz Sacristan has been a director of the Company
(an international airport in Mexico). Mr. Ruiz Sacristan
since February 12, 2004 and is a special independent
holds a Bachelor’s degree in Business Administration
director nominee. Since November 2001, he has been the
from the Anahuac University, and a Master’s Degree in
owner and Managing Partner of Proyectos Estrategicos
Business Administration from Northwestern University in
Integrales, a Mexican investment banking firm specialized
Chicago, Illinois.
99
EXECUTIvE OFFICERS
GERMAN LARREA MOTA-VELASCO
Chairman of the Board of Directors
OSCAR GONzALEz ROChA
President and Chief Executive Officer
XAVIER GARCIA DE QUEVEDO TOPETE
President and Chief Executive Officer Southern Copper
Minera Mexico and our Chief Operating Officer
RAUL JACOB RUISANChEz
Vice-President, Finance and Chief Financial Officer
AGUSTIN AVILA MARTINEz
Comptroller
JUAN MANUEL RODRIGUEz ARRIAGA
Vice-President Commercial
VIDAL MUhECh DIP
Vice-President, Projects
EDGARD CORRALES
Vice-President, Explorations
JAVIER GOMEz AGUILAR
Vice-President, Legal and Legal Advisor
hANS A. FLURY
Secretary
100
nEXT OF kin
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 company as defined by the rules of the NYSE. Grupo Mexico owns indirectly 81.28
% of the stock of the Company, as of December 31, 2012. 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
Cifuentes, and Emilio Carrillo Gamboa, the three members of the Company’s Audit Committee, are
independent of management and financially literate in accordance with the requirements of the NYSE
and the Securities and Exchange Commission (“SEC”), as such requirements are interpreted by the
Company’s Board of Directors in its business judgment. In 2012, we had three special independent
directors nominated by the Special Nominating Committee, Messrs. Luis Miguel Palomino Bonilla,
Gilberto Perezalonso Cifuentes, and Carlos Ruiz Sacristan. Additionally in 2012, Messrs. Emilio
Carrillo Gamboa and Enrique Castillo Sánchez Mejorada were our fourth and fifth independent
directors. At its meeting on January 24, 2013, the Board of Directors approved the nomination
of special independent directors made by the Special Nominating Committee and endorsed the
determination made by the Special Nominating Committee that Messrs. Luis Miguel Palomino
Bonilla, Gilberto Perezalonso Cifuentes, and Carlos Ruiz Sacristán are independent of management
in accordance with the requirements of the NYSE, as such requirements are interpreted by the
Special Nominating Committee and our Board of Directors in their respective business judgments.
The Board of Directors also determined that Messrs. Emilio Carrillo Gamboa and Enrique Castillo
Sánchez Mejorada 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 relationship of affinity and/or consanguinity exists
among the members of the Board, and between them and the Executive Officers of SCC.
101
SPEciAL cOMMiTTEES OF THE BOARD
SCC’s Board of Directors has organized the following Special Committees:
1. Executive Committee. It is comprised of five members who substitute for the Board when
sessions or decisions are required concerning urgent matters, or matters for which the Board
would have expressly delegated its mandate.
2. Audit Committee. It is 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 performance of the internal audit function
and of the independent auditors; and (iv) the Company’s compliance with legal and regulatory
requirements; and (b) prepare the report required by SEC rules.
3. Compensation Committee. It is comprised of four Board members and its principal objective
is to evaluate and establish the remunerations of principal officers and key employees of the
Company and its subsidiaries.
4. Special Nominating Committee. It is comprised of two independents Board members and one
nominated by the Board and it has the exclusive authority to propose and evaluate individuals
who are proposed as special independents directors.
5. Corporate Governance Committee. It is comprised of four Board members and has as its
primary functions to consider and make recommendations to the Board concerning the
appropriate function and needs of the Board, to develop and recommend to the Board
corporate governance principles, to oversee evaluation of the Board and management, and to
oversee and review compliance with the disclosure and reporting standards of the Company
that require full, fair, accurate, timely, and understandable disclosure of material information
regarding the Company in reports and documents that it files with the SEC, the NYSE and
102
equivalent authorities in the countries in which the Company operates, as well as in other
public communications that it regularly makes.
6. Administrative Committee. It is designated by the Named Fiduciary appointed by the Board
for the benefit plans as required by the Employee Retirement Income Security Act – ERISA of
the United States. ERISA is the law that covers employee retirement and other benefit plans.
Mr. Daniel Muñiz Quintanilla is the Board-appointed Named Fiduciary for the Company’s
benefits plans subject to US regulations, including ERISA. This Officer appoints an
Administrative Committee, which is comprised of three management members and its purpose
is to administer and manage said plans and to oversee the performance of the trust agents and
other fiduciaries charged with investing the plans’ funds.
ADMiniSTRATiOn AnD BOARD incOME
Total remunerations of Board and Administration members, in relation to the Company´s gross
income is 0.07%.
AnnuAL MEETinG
The annual stockholders meeting of Southern Copper Corporation will be held on Tuesday, April
29, 2014 at 09:00 hours. Mexico City time, at Edificio Parque Reforma, Campos Eliseos No.
400, 9th Floor, Colonia Lomas de Chapultepec, Mexico City, Mexico.
United States
corporate Offices:
Mexico
Peru
1440 East Missouri
Edificio Parque Reforma,
Av. Caminos del Inca No. 171
Avenue, Suite 160
Campos ElIseos No. 400
Chacarilla del Estanque
Phoenix, Az. 85014, USA
Col. Lomas de Chapultepec
Santiago de Surco Lima 33,
Phone: +1(602) 264-1375
Mexico D.F.
Peru Phone: +(511) 512-0440
Phone: +(52-55) 1103-5320
Ext. 3181
103
Transfer Agent, Registrar and Stockholder Services
Computershare
480 Washington Boulevard
Jersey City, NJ 07310-1900
Phone: +1(866)230-0172
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
Mellon Corporation. For more information, contact The Bank of New York Mellon Corporation at
phone +1(866) 230-0172.
Stock Exchange Listing
The principal markets for SCC’s Common Stock are the New York Stock Exchange and the Lima
Stock Exchange. Effective February 17, 2010, SCC’s Common Stock changed its symbol from
PCU to SCCO on both the NYSE and the Lima Stock Exchange.
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 SPCCPI1 and
SPCCPI2.
Transfer Agent, registrar and stockholders services are provided by Banco de Credito of Peru at
Avenue Centenario 156, La Molina, Lima 12, Peru.
Phone +(511) 313-2478, Fax +(511) 313-2556.
104
Other Corporate Information
For other information on the corporation or to obtain additional copies of the annual report,
Form 10-K 2013 contact to Investor Relations Department at our corporate offices:
Southern Copper Corporation
USA: 1440 East Missouri Avenue, Suite 160 Phoenix, Az. 85014, USA
Phone: (602)264-1375, Fax (602) 264-1397.
Mexico:
Campos Eliseos No. 400, 11 floor,
Col. Lomas de Chapultepec Mexico D.F.
Phone +(52-55) 1103-5000, Extension 5855.
Peru:
Avenue Caminos del Inca 171 (B-2), Chacarilla del Estanque, Santiago de Surco
– Lima 33 - Peru. Phone. +(511) 512-0440, Ext. 3442.
Web Page: www.southerncoppercorp.com
Email address: southerncopper@southernperu.com.pe
Form 10-K1
Attached Form 10-K 2013 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.
1Form 10-K 2013, Phone. +(511) 512-0440, extension 3442 for Spanish
105
MEMbERS OF THE bOARD OF
DIRECTORS
German Larrea Mota-Velasco
Oscar Gonzalez Rocha
Emilio Carrillo Gamboa
Alfredo Casar Perez
Xavier Garcia de Quevedo Topete
Daniel Muñiz Quintanilla
Luis Miguel Palomino Bonilla
Gilberto Perezalonso Cifuentes
Juan Rebolledo Gout
Carlos Ruiz Sacristan
Luis Castelazo Morales
Enrique Castillo Sanchez Mejorada
Audit committee
Emilio Carrillo Gamboa, Chairman
Luis Miguel Palomino Bonilla
Gilberto Perezalonso Cifuentes
Enrique Castillo Sanchez Mejorada
106
107
107
1440 East Missouri Avenue
Suite 160, Phoenix, Az. 85014, U.S.A.
Phone: +(602) 264 1375
Fax: +(602) 264 1397
MEXICO
Campos Eliseos No. 400, 11 floor
Col. Lomas de Chapultepec, Mexico D.F.
Phone: +(52-55) 1103-5000, Extension 5855
Fax: + (52-55) 1103-5583
PERU
Av. Caminos del Inca 171
Chacarilla del Estanque, Santiago de Surco
Lima 33 - Peru
Phone. +(511) 512-0440, Ext. 3442
Fax: +(511) 512-0486
Web Page
www.southerncoppercorp.com