Southern Copper
Annual Report 2013

Plain-text annual report

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 

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