SOUTHERN COPPER CORPORATION
CORPORATE OFFICES
UNITED STATES
11811 North Tatum Blvd.
Suite 2500, Phoenix, AZ 85028, U.S.A.
Phone: +(602) 494 5328
Fax: +(602) 494 5317
MEXICO
Campos Eliseos No. 400, 9 floor
Col. Lomas de Chapultepec, Mexico D.F.
Phone: + (52-55) 1103-5320, Extension 5855
Fax: + (52-55) 1103-5583
PERU
Avenue Caminos del Inca 171 (B-2)
Chacarilla del Estanque, Santiago de Surco
Lima 33 - Peru
Phone: +(511) 512-0440, Extension 3354
Symbol: SCCO
E-mail
southerncopper@southernperu.com.pe
www.southerncoppercorp.com
2014
IN DETAIL
ANNUAL REPORT
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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 2014. 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
02
PRODucTiOn STATiSTicS
08
cOPPER RESERVES
11
SELEcTED AnD FinAnciAL DATA
15
cAPiTAL inVESTMEnT PROGRAM AnD EXPLORATiOn
(EXPAnSiOn & MODERniZATiOn)
17
DEVELOPMEnT - cOMMuniTY OuTREAcH
25
RESuLTS OF OPERATiOnS
for the years ended December 31, 2014, 2013 and 2012
47
cOMMiTMEnT - EnViROnMEnTAL AFFAiRS
53
GEnERAL inFORMATiOn
Description of Operations and Development Regarding
The issuing Entity
63
MEMBERS OF THE BOARD OF DiREcTORS
96
02
LETTER TO
SHAREHOLDERS
in 2014, we obtained approval of the environmental impact studies for
our major Peruvian projects of Tia Maria and the Toquepala concentrator
expansion. We need authorization from the Peruvian Minister of Mining to
start construction. Tia Maria will add 120,000 annual tons of copper and
Toquepala 100,000 tons, as well as 3,100 tons of molybdenum, to our
production capacity. in addition, Buenavista projects in Mexico, while still
in process, have already increased our annual production of copper and
molybdenum. When completed, the Buenavista projects will add additional
annual production capacity of 308,000 tons of copper and 4,600 tons of
molybdenum. These major projects will enhance Scc’s leadership as one
of the lowest cost copper producers in the world.
1 On April 14, 2015 the construction permit for the Toquepala expansion project was received.
LETTER TO SHAREHOLDERS
03
capital expenditures for 2014 were $1,535 million and for 2015, the Board
of Directors approved a capital expenditure program of $2,685 million
mainly to complete the Buenavista expansion, expansion of Toquepala and
construction of our new project in Peru “Tia Maria.
Regarding our other projects, we are pleased to note that in Mexico we
continue with our Buenavista investment program of $3.4 billion. The new
copper-molybdenum concentrator will additionally produce 2.3 million
ounces of silver and 21,000 ounces of gold per year. At December 31,
2014, the project has a 92.2% progress with an investment of $978.5
million. The project is expected to be completed in the third quarter of
In 2014, we obtained
approval of the
environmental impact
studies for our major
Peruvian projects of Tia
Maria and the Toquepala
concentrator expansion. We
need authorization from the
Peruvian Minister of Mining
to start construction.
ANNUAL REPORT 2014 04
During the construction of the SX-EW III plant, more than 7,600 direct and indirect jobs
were created. Total investment in this project was $ 444 million.
2015. in addition, our crushing, conveying and
in the global economy. Our investment program aims to
spreading system for leachable ore project (Quebalix
increase copper production capacity by approximately
iV) will increase production by improving SX-EW
1.2 million metric tons by 2018.
copper recovery, reducing processing time and mining
and hauling costs. The project has a 49.4% progress
Despite international conditions that negatively impact
with an investment of $117.7 million.
prices of our main products -copper and molybdenum-,
we are making efforts to increase our efficiency and
At the cuajone mine, in Peru, we implemented the
output, thereby achieving lower costs.
HPGR project and the variable cut-off ore grade
project, which produced an estimated 23,500 tons
copper production for 2014 increased 9.7% to
of copper. The project is expected to generate cost
676,599 metric tons from 617,019 metric tons in
savings, improve copper recovery and reduce power
2013. in the 4Q14, copper production increased 9.2%
consumption in the crushing process.
to 183,616 metric tons from 168,210 metric tons in
3Q14. This increase was the result of higher production
Based on the progress of our projects, Scc believes,
at our Mexican operations, mainly at the Buenavista
it is well positioned to take advantage of the expected
mine, and at our Peruvian operations.
copper market recovery, with the gradual improvement
LETTER TO SHAREHOLDERS 05
In June 2014, SX-EX III plant, with a capacity of 120,000 tons, produced its first cathode.
In December, the plant reached a production of 32,927 tons. It is the plant with the greatest
flow of solutions in the world.
in 2014, operating cash cost per pound of copper
sales volume for molybdenum and gold helped to
produced without by-product revenues was slightly
offset some of the negative factors.
lower than in 2013, a decrease of 0.5% mainly due
to the diluting effect on unit cost of higher production
We believe we hold the world’s largest copper reserve
at all our open pit mines, more significantly from
position. At December 31, 2014, our copper ore
Buenavista. This increase in production volume
reserves totaled 69.9 million tons of contained copper,
offset the cost of higher inflation, which increased
calculated at a copper price of $2.90 per pound.
fuel, power and other operating materials for our
production process.
Our principal operations are in Mexico and Peru,
where we have an active ongoing exploration program.
Our cash cost per pound for 2014 when calculated
in 2014, we continued with our internationalization
with by-product revenues was $1.05 per pound,
program, looking for new deposits in Latin America.
compared to $1.00 per pound in 2013. The by-
Also, we have an ongoing exploration program in chile,
product credit in 2014 was six cents less than in
Argentina and Ecuador.
2013. This was due to lower prices for silver and
gold, and lower sales volume of silver and zinc.
in addition, our social programs continue to operate
Higher prices for zinc and molybdenum and higher
run in each of the countries where we have a presence
ANNUAL REPORT 2014 06
for exploration, mining, concentration, smelting, refining and marketing
of our products. neighboring populations of our operational areas benefit
from the social programs 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 your
permanent support.
GERmAN LARREA mOTA VELAScO
OScAR GONzALEz ROcHA
cHAiRMAn OF THE BOARD
PRESiDEnT AnD cHiEF EXEcuTiVE OFFicER
AnnuAL REPORT 2014
07
The new copper molybdenum concentrator will additionally produce 2.3 million
ounces of silver and 21,000 ounces of gold per year. At December 31, 2014, the
project has a 92.2% progress with an investment of $978.5 million.
ANNUAL REPORT 2014 PRODUCTION STATISTICS
Southern Copper Corporation and SubSidiarieS Five-year produCtion
StatiStiCS
Copper production Mines
(tons)
Mined Material
(thousand)
copper in concentrates
copper SX/EW
Total copper
Molybdenum in concentrates
Zinc in concentrates
Silver in concentrates
(thousand ounces)
Smelter & refineries production
2014
2013
2012
2011
2010
758,965
532,291
144,308
676,599
23,120
66,614
12,992
641,456
568,428
502,909
398,953
498,361
516,572
465,973
397,030
118,658
121,107
121,518
81,497
617,019
637,679
587,491
478,527
19,897
99,372
13,513
18,297
89,884
13,644
18,570
83,807
12,731
20,519
99,194
12,646
copper
Zinc
Silver
561,939
545,082
558,998
569,492
429,899
(thousand ounces)
92,133
13,348
97,692
15,572
93,542
13,867
90,869
12,731
95,072
12,646
Toquepala
Mined Material
copper in concentrates
Molybdenum in concentrates
Cuajone
Mined Material
copper in concentrates
Molybdenum in concentrates
Smelter/refineries in Peru
SX/EW
Smelt concentrates
Blister produced
Anode produced
cathode produced
(thousand)
211,202
114,828
6,100
169,808
173,927
177,398
179,313
110,691
120,108
120,379
131,518
4,662
4,468
5,363
4,828
(thousand)
182,812
173,277
154,091
140,108
126,144
178,337
168,582
158,793
140,140
164,968
4,001
3,133
2,861
2,787
5,259
25,675
28,400
32,194
35,322
37,938
1,022,536
1,072,826
996,592
1,094,224
997,933
-
1,670
32,843
-
-
303,939
322,637
265,213
337,812
312,478
257,926
271,035
215,666
260,998
255,505
09
2014
2013
2012
2011
2010
Mexicana de Cobre - Caridad
Mined Material
(thousand)
91,454
88,595
Copper in concentrates
Molybdenum in concentrates
101,062
96,863
10,800
11,742
86,632
97,847
10,968
84,266
84,163
89,778
94,871
10,420
10,432
Buenavista
Mined material
(thousand)
271,026
206,710
150,871
98,306
6,439
copper in concentrates
132,853
115,813
133,966
110,147
-
Smelter/Refineries in Mexico
SX/EW
Smelt concentrates
Anode produced
cathode produced
Rod produced
Underground Mines
contents in concentrates
(tons)
118,633
90,258
88,913
86,196
43,559
926,427
722,597
904,311
832,307
416,730
258,000
220,775
260,941
231,680
116,534
204,302
188,005
213,734
186,853
84,626
129,078
126,800
120,791
107,925
57,264
Zinc
Lead
copper in concentrates
Silver
Gold
66,614
99,372
22,286
23,918
5,211
6,412
(thousand ounces)
4,945
6,170
(thousand ounces)
4,857
5,493
89,884
19,978
5,858
5,974
5,210
83,807
99,194
18,817
20,240
5,529
5,866
6,286
5,673
6,549
5,023
ANNUAL REPORT 2014
10
LETTER TO SHAREHOLDERS CHAPTER ONE
11
US$3.11
LME copper price
MINERAL
RESERVES
Our management focuses on creation value through copper production,
controlling costs, improving production and maintenance capital structure
to remain profitable.We achieve these goals through capital expenditures,
exploration and reduction cost programs.
ANNUAL REPORT 2014 12
Southern Copper Corporation is one of the largest integrated copper producers in the
world and we believe we currently have the largest copper reserves in the industry.
cOppER RESERVES
We believe we hold the world’s largest copper reserve position. At December
31, 2014, our copper ore reserves totaled 69.9 million tons of contained
copper, calculated at a copper price of $2.90 per pound (as of December 31,
2014, the LME and cOMEX copper price was $3.11 and $3.12, respectively),
our internal ore reserve estimation value is as follows:
CATHODES Cu
MinERAL RESERVES
13
Copper Contained in ore reServeS
thouSand tonS
Mexico
Buenavista
La caridad
iMMSA
Peru
Toquepala
cuajone
Development projects
El Arco
Tia Maria
Angangueo
Total
25,232
9,034
213
14,993
8,726
9,030
2,626
92
69,946
For more information on ore reserves refer to “Mineral Reserves” (p. 44-46) of our Form 10-K 2014.
ANNUAL REPORT 2014 14
Southern Copper Corporation operates mining units and metallurgical facilities in
Mexico, Peru and conduct exploration activities in Argentina, Chile, Ecuador, Mexico and
Peru.
SOUThERN COPPER CORPORATION AND SUbSIDIARIES
15
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)
Consolidated Statement of earnings
net sales
Operating costs and expenses
Operating income
non-controlling interest of investments shares on
2014
2013
2012
2011
2010
$ 5,788
$ 5,953
$ 6,669
$ 6,819
$ 5,149
$ 3,555
2,233
3,421
2,532
3,560
3,109
3,193
3,625
2,545
2,604
Peruvian Branch income
5
6
7
8
9
Net earnings attributable to SCC
$ 1,333
$ 1,619
$ 1,935
$ 2,336
$ 1,554
Per share amount
Net earnings attributable to SCC – basic and diluted
Dividends paid
consolidated balance sheet
cash and cash equivalent
Total assets
Total debt
Total equity
Consolidated statement of cash flows
Cash provided from operating activities
Dividend paid
capital expenditures
Depreciation & depletion
Capital stock (1)
Common shares outstanding (in thousands)
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)
$ 1.61
0.46
$ 1.92
$ 0.68
$ 2.28
$ 4.06
$ 2.73
$ 2.43
$ 1.83
$ 1.68
364
11,552
4,206
$ 5,837
$ 1,673
10,996
4,205
$ 5,562
$ 2,460
10,384
4,214
$ 4,789
848
$
8,063
2,746
$ 4,036
$ 2,193
8,128
2,760
$ 3,910
$ 1,356
381
1,530
445
$ 1,857
574
1,703
396
$ 2,004
3,140
1,052
326
$ 2,080
2,080
613
288
$ 1,921
1,428
409
282
813
$ 33.54
$ 26.08
$ 7.14
17.52
835
$ 41.96
$ 24.78
$ 6.62
14.95
846
$ 38.94
$ 28.16
$ 5.64
16.60
850
$ 49.59
$ 23.99
$ 4.77
11.04
859
$ 48.84
$ 26.19
$ 4.58
26.94
2.16
4.36
5.00
3.12
3.25
39.7%
31.3%
26.8%
32.0%
12.7%
12,735
12,665
12,085
12,145
11,510
(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.
AnALiSiS Y DiScuSiOn
ANNUAL REPORT 2014
16
LETTER TO SHAREHOLDERS CHAPTER TWO
US$3,400
were invested in Buenavista
17
CAPITAL
EXPENDITURES
AND EXPLORATION
The construction of the new
Buenavista SX-EW III plant,
with a capacity of 120,000
tons, was completed and start
commercial production in June
2014.
ANNUAL REPORT 2014 Aereal view of the new ore thick warehouse. It works as an environmental measure,
preventing the spread of dust.
cApITAL EXpENDITuRES
We made capital expenditures of $1,534.8 million, $1,703.3 million and
AND EXpLORATION
$1,051.9 million in 2014, 2013 and 2012, respectively. in general, the
capital expenditures and investment projects are intended to increase
production, decrease costs or address social and environmental
commitments. in 2015, we plan to invest $2.7 billion in capital projects. As
we previously disclosed, our investment program aims to increase copper
production capacity by approximately 89% from our 2013 production level
of 617,000 tons to 1,165,000 tons by 2018. in addition to our ongoing
capital maintenance and replacement spending, our principle capital
programs include the following:
cAPiTAL EXPEnDiTuRES & EXPLORATiOn
PROJECTS IN MEXICO:
Buenavista Projects: We continue developing our
The crushing, conveying and spreading system for
$3.4 billion investment program at this unit which is
leachable ore project (Quebalix iV) will increase
expected to increase its copper production capacity
production by improving SX-EW copper recovery,
by approximately 175%, as well as molybdenum
reducing processing time, mining and hauling costs.
production by 42%.
it has a crushing and conveying capacity of 80 million
tons per year and is expected to be completed in
The new copper molybdenum concentrator has
the fourth quarter of 2015. The project has a 49.4%
an annual production capacity of 188,000 tons of
progress with an investment of $117.7 million out of
copper and 2,600 tons of molybdenum. The project
the approved capital budget of $340 million.
will additionally produce 2.3 million ounces of silver
and 21,000 ounces of gold per year. The total capital
The
remaining projects
to complete
the $3.4
budget of the project is $1,383.6 million and through
billion budgeted program include investments in
December 31, 2014, the project has a 92.2% progress
infrastructure, including power lines and substations,
with an investment of $978.5 million. The project is
water supply, tailings dam, mine equipment shops,
expected to be completed in the third quarter of 2015.
internal roads and others.
All major equipment is on site and has been installed.
Angangueo: With an estimated investment of $174.7
Regarding the mine equipment acquisition for the
million, Angangueo includes a concentrator plant which
Buenavista expansion, through December 31, 2014
will have an estimated average annual metal content
we have invested $510.9 million and have received
production of 10,400 tons of copper and 7,000 tons of
sixty-one 400-ton capacity trucks, seven shovels and
zinc in the first seven years. Over the life of the mine,
eight drills required for the mine expansion. All of this
average annual concentrate production is expected to
equipment is currently in operation.
contain 2.4 million ounces of silver and 1,500 ounces
of gold. Through December 31, 2014 we have spent
Performance testing for the SX-EW iii plant was
$27.3 million on the project. We are preparing the new
successfully completed and technical full capacity has
environmental studies for this project. We will wait the
been achieved in accordance with the design flow rate
authorization from SEMARnAT to resume the purchase
of the plant. Estimated annual production for the plant
of main equipment and work on the project.
is 120,000 tons of copper cathodes. capital budget of
$444.0 million has been invested through December
31, 2014.
We remain the world leader in production costs. In 2014, according
to Wood Mackenzie, industry analyst firm, Southern Copper Corporation (SCC)
is leader in low-cost production, followed by Americas Mining Corporation (AMC).
7%
AMOUNT
2014
YEAR
847,387
TONS
COPPER
Cu +
IN 2014, COPPER
PRODUCTION
INCREASED 7 %
COMPARED WITH 2013
847,387 TONS, A NEW
RECORD.
inVESTMEnTS & EXPLORATiOn
PROJECTS IN PERu
21
Toquepala Projects: Through December 31, 2014, we
The project to improve slope stability at the south area
have invested a total of $346.0 million in Toquepala
of the cuajone mine, will remove approximately 148
projects. These projects include the construction of
million tons of waste material, in order to improve
a new crusher and conveyor belt system to replace
mine design without reducing current production
current mine rail haulage, which we expect will reduce
level. The mine equipment acquired includes one
annual operating cost.
shovel, five 400-ton capacity trucks, one drill and
auxiliary equipment which will be reallocated to our
Toquepala expansion project: On December 17, 2014
mine operations once the project is finished. Besides
we received governmental approval of the EiA for the
preparing the mine for the future, this investment
Toquepala concentrator expansion, which will allow
will avoid a reduction in average ore grade. As of
us to continue developing this important project.
December 31, 2014, 14 million tons of waste material
The Toquepala concentrator expansion will increase
have been removed and activities will continue for 4
annual production capacity by 100,000 tons of copper
additional years. At December 31, 2014, we have
and 3,100 tons of molybdenum at a total capital cost
invested $67.7 million in this project.
of approximately $1.2 billion.
Tia Maria project: On August 1, 2014 we received
cuajone Projects: Through December 31, 2014, we
the final approval of our EiA. We expect to be granted
have invested $40.6 million of a budget of $45 million
the authorization in the first quarter of 2015 to move
on the HPGR project, which will produce a more finely
forward with the construction phase and begin
crushed material. The engineering and the purchase
construction immediately thereafter.
of equipment have been completed and the project
has reached 99% completion. The project is expected
This project will be completed in the first half of 2017
to generate cost savings, improve copper recovery and
with an investment of approximately $1.4 billion, to
reduce power consumption in the crushing process.
produce 120,000 tons of copper cathodes per year
Through December 2014, the implementation of
using state of the art technology with the highest
the HPGR project and the variable cut-off ore grade
international environmental standards. The project is
project, implemented in 2013, have produced an
currently expected to generate 3,500 jobs during the
estimated incremental production of 23,500 tons of
construction phase. When in operation, Tia Maria will
copper.
directly employ 600 workers and indirectly another
ANNUAL REPORT 2014 2,000. Through its expected twenty-years of life, the project related
services will create significant business opportunities in the Arequipa
region.
in addition, the company intends to implement social responsibility
programs in the Arequipa region similar to those established in the
communities near its other Peruvian operations.
Tailings disposal at Quebrada Honda: This project increases the height
of the existing Quebrada Honda dam to impound future tailings from the
Toquepala and cuajone mills and will extend the expected life of this tailings
facility by 25 years. The first stage and construction of the drainage system
for the lateral dam is finished. We are preparing bidding documents for the
second stage that includes engineering and procurement to improve and
increase the dam’s embankment. The project has a total budgeted cost of
$66.0 million, with $52.7 million invested through December 31, 2014.
22
CATHODES Cu
DURING 2014, WE
RECORDED SPCC´S ILO AND
MEXICANA DE COBRE’S CER
ELECTROLITIC CATHODES
IN THE SHANGAI EXCHANGE,
IN CHINA, AND METAL
EXCHANGE IN CHINA, AND
THE LME OF LONDON,
RESPECTIvELY, SO WE TOOk
AN IMPORTANT ADDED
vALUE AND LIqUIDITY TO
THESE PRODUCTS.
inVESTMEnTS & EXPLORATiOn
23
As a result of significant investments in Buenavista ,
it will become the third mine in the world in terms of production.
ANNUAL REPORT 2014 24
DIVISIÓN TRANSPORTE CHAPTER THREE
25
COMMUNITY
OUTREACh
SOUTHERN COPPER CORPORATION
Southern Copper Corporation is much more than copper.
We are an organization with an unwavering will towards our stakeholders, considering
value creation in our social environment is importance for our success and
permanence.
ANNUAL REPORT 2014 26
Based on honesty, responsibility and professional ethics, we generate greatest value to our
stakeholders. In synergy with our employees, their families, and our neighbouring communities,
we move forward looking for alternatives that contribute to their development and welfare.
DIVISIÓN TRANSPORTE ENVIRONmENTAL AND SOcIAL mEASuRES
27
At Southern copper corporation we are much more
investment, but also for the results which, with great
than just a copper producer. We are an organization
satisfaction, we have achieved in communities and in
with an unwavering will for our stakeholders, as we
our environment.
understand that creation of value is a key to our success
and permanence. For that reason, we constantly strive
These achievements have been possible thanks to the
to achieve an increasingly efficient operation in social,
actions, plans and programmes that the company has
economic and environmental issues.
implemented, proving our commitment to care of the
environment, quality of life of our employees, a culture
With honesty, responsibility and professional ethics as
of ethics, and contribution to the development of the
the basis of our foundation, we seek to generate the
communities in which we operate.
greatest value for our stakeholders. in synergy with our
employees and their families, as well as our neighbouring
OuR ENVIRONmENTAL cOmmITmENT
communities, we move forward to find and implement
(EcOLOGIcAL BALANcE)
decisions that may contribute to the development and
common good.
We maintain an ongoing commitment to move forward
in harmony with the challenges of expansion and
For that purpose, we have a methodology platform that
modernisation of the industry of which we are part. in
is ingrained in our business model, and aligned to the
this regard, not only do we seek regulatory compliance,
needs of the communities and to the specific needs of
but we also operate following the best environmental
the regions where we operate.
practices,
committed
to
achieving
optimum
in Southern copper corporation, we want our projects to
assessing and mitigating the impacts generated by our
environmental performance at all times, by identifying,
have a positive impact and strengthen the relationship
activities on the environment.
with the communities where we operate. in 2014, we
developed projects that will leave lasting benefits, not
We develop strategies to meet the specific environmental
only for what they mean in terms of innovation and
needs of each region and Division, and implement them
ANNUAL REPORT 2014 28
through environmental management systems that we have developed under
nine specific lines of action:
Responsible use of
water and natural
resources
Prevention, control
and reduction of air
emissions
Efficiency use of
energy
Reduction of GHG
emissions per
ton produced
Reduction in
waste generation
and integrated
management
Mine closure
Biodiversity
conservation
Reforestation
compliance,
environmental
regulation
in 2014, three units of Southern copper corporation were granted the iSO 14001:2004 certification.
29
These certifications which, together with the 12 clean industry certifications and 6 Environmental
Quality certifications, previously awarded our company, are the product of the efforts of all of our
employees and a comprehensive application of the best environmental practices in each of the
activities we engage in.
environmental eXpenditureS (million dollar)
SCC
Air
Ground
Waste
Biodiversity
Gestion
Water
TOTAL
$
$
$
$
$
$
69.73
13.09
38.40
1.23
8.23
22.16
$ 152.84
We maintain our
commitment to move
forward with the challenges
of expansion and
modernization of industries
in which we participate,
seeking not only for
regulatory compliance, but
to operate under the best
environmental practices.
ANNUAL REPORT 2014 30
EnERGY AnD cLiMATE cHAnGE
At Southern copper corporation we are aware of the effects of climate
change and its impact on our operations, so by anticipating an increase in
the probability of occurrence of extreme weather events such as hurricanes,
droughts, floods and fires, we have identified potential risks resulting from
global warming. in addition to the risks arising from the increase in the global
temperature of the planet, we also face the impact of new environmental
policies and regulations that are being adopted by the governments of all
countries.
Given these challenges, at Southern copper corporation we are taking
measures which include:
• using energy more efficiently.
• Diversifying our energy mix and shifting it to cleaner energy sources.
• Developing and using renewable energy sources.
•
increasing the level of electric power self-sufficiency.
• Promoting efforts to capture greenhouse gases.
• Encouraging positive change s in employee behaviour through awareness
campaigns.
Simultaneously with our environmental policy, we continue to implement
actions to maximize the generation of electricity by using our own energy
sources. in the case of Mexico, we make use of the smelter gases for the
heat recovery boiler to generate energy. in Peru, we generate energy from
renewable sources, in particular from two hydroelectric plants with a combined
capacity of 130 terajoules.
Additionally, in July 2014 our Mexican operations started using electric power
supplied by a wind farm, owned by a subsidiary of Grupo Mexico; by doing
so, we are diversifying our energy mix by allocating a higher proportion to
renewable sources, and further reducing emissions related to our energy
consumption.
in addition to generating and consuming energy from
shift towards an environmentally friendly economic
31
renewable sources and cleaner fuels, we have also
development.
implemented best practices that have resulted in
higher energy efficiency in our operations, including
BiODiVERSiTY
the improvement, redesign, conversion, and retrofitting
Our operating units have tree nurseries that grow
of equipment, the rational use of resources, and the
species native to the region, and are used to reforest
training of personnel to improve their performance
and rehabilitate ecosystems, including those of areas
during operations.
not adjacent to our operations.
We increased the production capacity of trees in our
in 2014, $175 million were invested in modernisation
nurseries and greenhouses to 4.4 million. Significantly,
projects of the crushing, concentration and hauling
the new greenhouses at our operations in the state
systems, which will enable us to reduce not only operating
of Sonora increased by 400,000 the number of trees
costs, but also the amount of energy consumed per ton
grown in 2014.
produced.
Major plans include the construction of a new crushing
and conveyor system in Toquepala, Peru; the “Quebalix
iV” crushing and conveyor system for leachable mineral,
at the Buenavista mine in Sonora, and the use of high
pressure grinding rolls at the cuajone concentrator in
Peru, to increase by 5.7% the energy efficiency in the
milling process.
TREES ANNUAL PRODUCTION
CAPACITY IN MILLION
4.4
4
2
2
0
1
4
2 0 1 3
2 0 1 2
These investments, which take place year after year,
in a significant effort to preserve endangered species, in
show the efficiency improvements in the energy used
2014 we improved our Mexican Gray Wolf conservation
for production at each operating unit. They demonstrate
Program, as a result of which we now have 8 specimens
our commitment to reducing our carbon footprint and
in a 1-3 hectare environmental management unit that
enhance our position as a sustainable global company,
has been conditioned to ensure that wolves will live
thereby improving our competitiveness and contributing
as closely as possible to their wildlife environment. To
in some way with the actions taken domestically to
emphasis this effort, we have adopted the Mexican wolf
ANNUAL REPORT 2014 32
as the flagship species of Grupo Mexico. To ensure proper care, an international
committee is recording the genealogy of all wolves held in captivity.
Another ongoing project within this wildlife conservation program is the turkey
Gould hatchery, aimed at preserving this species by breeding and releasing
them in the area of cananea, in Mariquita, Sonora, as well as, some private
farms. The first release took place in September 2014, in the vicinity of the
national Forest Reserve and the Ajos-Bavispe Wildlife Sanctuary, an area
characterized by a great diversity of ecosystems.
At our Peruvian operations, we continue to make significant environmental
investment and conservation measures. The remediation program has
successfully removed pollutants from ite Bay –which is located in Tacna, Peru
and has an area of 1,600 hectares; this has resulted in the largest and most
diverse coastal waterfowl wetland in the country.
WATER MAnAGEMEnT
in Southern copper corporation we are aware of the huge responsibility
entailed in the care of water, as it is one of the most important inputs in our
mining and industrial processes. Accordingly, we promote the rational use of
this resource.
Our measures for the efficient use and saving of water include:
• Pumping systems to of recover water.
•
instrumentation and maintenance of closed circuits to use the total
volume of process water.
• continuous water recovery from tailings and thickener processes for
reuse in metallurgical processing.
•
implementation of the Zero Wastewater Discharge Program, which seeks
a more efficient management of both consumption and reuse of water
resources.
33
Southern Copper Corporation promotes the rational use of water as it is one of the most
important inputs in our mining operation.
ANNUAL REPORT 2014 34
In 2014, $175 million were invested in modernization projects of crushing, concentration and
hauling systems, which will enable us to reduce operating costs and the amount of energy
consumed per ton produced.
The implementation of closed circuits in our mining operations allows 67% of the total water consumed
in the company be reused water. The consumption of fresh water in mining operations becomes
necessary only due to evaporation losses.
At in some facilities, the company makes use of municipal wastewater treatment utilities, which
after treatment, is used in industrial processes; as is the case at, our wastewater treatment plant
in San Luis Potosi. While the plant only increases by 3% the flow of treated water by the utility, it is
one of the few that increases the availability of fresh water in the city to meet the demands of its’
32,000 inhabitants.
in Peru, the ilo Smelter maximises the use of desalinated water 99% of total consumption, is supplied
by this type of treated water.
in terms of water management, it is important to mention that an incident took place on August 6,
2014, namely the spill of approximately 40,000 cubic meters of acidic solution with copper sulphate at
a dam 10 kilometres away from the Buenavista del cobre mine in cananea,
35
Sonora.
Today, the cleaning of both rivers, affected by the spill, have already been
completed, and the people affected were promptly taken care of, and
appropriate preventive measures are being taken to make sure that a similar
incident will not recur.
under the supervision of the authorities, a team of 1,100 employees
accompanied by environmentalists, physicians, safety supervisors and
biologists conducted cleanup activities, as a result of which most of the
metals in the spill were removed. it should be remarked that, as part of
the remediation process, water, soil, and sediment quality studies, were
performed on 3,262 samples by laboratories accredited by the Mexican
Accreditation Authority, which had been approved by PROFEPA.
From the very beginning of the incident, Grupo Mexico has maintained a
presence in the region to help the people of the 7 affected municipalities and
to listen to their concerns. The company launched a water supply and water
infrastructure program for the general population, the schools and health
centres, and has provided more than 167 million litters of drinking water on
a 24/7 basis during 2014.
On September 15, a $150 million trust fund was established in order to
provide support to the populations affected by the spill, as well as to support
the implementation of the measures set out in the remediation program.
The company has also extended its community Development Program to
affected communities along the river banks, promoting socially emblematic
projects related to the challenges of the region, just as any other citizen,
whose duty is promoting the common good.
For more information, please refer to the following website:
http://www.riosonora.com.mx/
ANNUAL REPORT 2014 36
Through Community Committees, we build social and
human capital, by grounding our actions on respect
for human rights and shared responsibility. These
committees are intended to promote people’s voluntary,
pluralistic and transparent participation, which
encourages a real link between the community and
Southern Copper Corporation and promotes exchange of
views, respect for values and strengthen social bonds.
336
WORKSHOPS
Health education
7,534 assistants.
cOMMuniTY OuTREAcH
OuR cOmmuNITIES
37
We build together the social and human capital that
reflects the company’s business model and that is
triggers the common welfare of future generations. That
intended to meet the particular needs and condition of
is our premise for meaningful development.
the communities where we operate in Mexico and Peru.
in line with the company’s operating lines of action,
in this context, it is essential to identify our stakeholders
the company and our methodology, which is based on
and keep in touch with them permanently in order to
the respect of human rights, social responsibility and
meet their expectations and address their concerns.
sustainability, our work aims at meaningful development
that will integrate the company’s both internal and
For that purpose, we have in place a methodology that
external stakeholders.
program
Community development
Social integration
community development programmes
Sponsorships and donations
infrastructure and equipment in neighbouring communities
Employees and communities
investment in education
Sport and cultural programs
investment in townsite infrastructure GMÉXicO
TOTAL
mEXIcO
cASA GRAnDE
SCC
$
$
$
$
$
$
$
12,963,711
3,891,106
1,066,805
30,202,768
4,532,656
1,060,775
19,439,686
$ 73,157,507
Together, we build social and human capital, by grounding
values, and to strengthen the social fabric.
our actions on the respect for Human Rights and shared
The casa Grande model has been so successful because
responsibility through community committees, agencies
it has enabled us to listen to people and groups that
that seek people’s voluntary, pluralistic and transparent
make up the communities; and to understand what is
participation, which encourages a real link between
required to achieve the common good of these and future
the community and Southern copper corporation to
generations. We identify their needs and concerns, and
promote the exchange of views, to further respect for
give priority to dialogue and consensus.
ANNUAL REPORT 2014
38
Our booklets on Health Education and Life have been edited with the support of experts in
educational issues. These nine booklets, for elementary and high school, are intended to
be useful material for our teachers, parents and students throughout the country.
cOMMuniTY OuTREAcH
With the calls for action made in Mexico in 2014,
Tamosura is equipped with water treatment plants, which
39
our community Development centres and projects
are used in the maintenance of vegetation, pastures and
implemented
in every region carried out 6,000
trees native to the region, representing balance between
activities in 21 towns. in the same period, we made
nature and urban infrastructure. This development was
important progress in training programs focused on
an investment of $30.36 million.
the development of productive projects which benefited
more than 6,150 people.
This centre has had a positive impact on the local
casa Grande is socially innovative and works constantly
economy: it has brought welfare, urban, economic and
in the development and implementation of programs to
industrial growth to the community and turned it into
benefit senior citizens, women, people with disabilities,
a regional common ground that promotes the social
and the youth and children. Thanks to our centres,
integration based on peaceful coexistence.
knowledge, experience and life skills are developed. Our
annual call for action in each community is outstanding:
Tamosura represents inclusion, diversity and pride of a
it is funded by Southern copper corporation, in addition
new cananea, which inspires a better future to all.
to the new mining tax in Mexico, and is invested to
support hundreds of projects previously evaluated by
REGiOnAL HOSPiTAL OF SPEciALTiES
the community committees, which empower them to
The cananea Regional Hospital of Specialties is a unique
be the agents of their own development.
project that was accomplished through a strategic
alliance and a trilateral investment by the Federal
TAMOSuRA uRBAn PARK
Government, the Government of the State of Sonora and
As part of Grupo Mexico’s commitment, we completed
Grupo Mexico. Built on an area of 4,000 square meters,
the construction of the Tamosura urban Park with 56
it provides medical care, emergency, surgery room,
hectares of public infrastructure, including health,
delivery room, X-ray, imaging, blood bank, telemedicine
sports, amusement facilities, and recreation facilities.
and 45 beds for hospitalization. it has specialties in
The following facilities are located within this park:
orthopaedics, paediatrics, orthopaedics, gynaecology,
the cananea Regional Hospital of Specialties, a
internal medicine, anaesthesia and surgery. One of
supermarket, a fitness centre with indoor pool, movie
the most important objectives is the implementation of
theatres, hotel, bowling, sports facilities, shops, offices,
haemodialysis service, in order to prevent the transfer of
branches and medical practices, as well as a residential
patients to other locations. The investment made so far
area that includes a park, a nursery and areas with
by the company amounts to $ 7.2 million.
natural reserves.
ANNUAL REPORT 2014 40
This hospital project benefits 35 thousand residents,
research have increased local production capacities and
and allows communities in the region to have access
optimised marketing processes in the communities.
to high quality health care, which is a sign of Southern
copper corporation’s interest in furthering the health
in 2014, our projects focused on the spheres of
and wellbeing of the communities in which it operates.
action that are part of Southern copper corporation’s
pERu
commitment, including:
• Education and capacity Building
• Health and nourishment
As in every region where Southern copper corporation
• infrastructure and support for the farming industry
operates, in Peru our team is committed to promoting
development; to achieve these objectives, it is essential
EDucATiOn AnD cAPAciTY BuiLDinG
to have a deep understanding of the needs of the
The implementation of the “Women Entrepreneurs
communities, and work hand in hand with them: we
of Torata” aims at developing woman-focused
recognize that the creation of value is only possible in a
entrepreneurial projects in the region of Torata Alta,
spirit of co-operation.
these women were provided with training in food
and textile processing. We were also involved in the
close cooperation with municipalities and with all
“Scholarship Grant 600” which benefited 600 teachers,
kinds of institutions and organisations representing the
who as a result are currently pursuing a Master’s degree
region, has given tangible results that improve the living
in Education, thus strengthening the capacity of teachers
conditions of local residents; moreover, studies and
in the Moquegua region.
One of the main educational goals is the improvement of basic education,
with an investment of $17 million to incorporate information technology and
improve communication in educational institutions; as a result, Moquegua
is now the leading region in terms of educational achievement; as more
than 33,000 students and 2,900 teachers have been benefited. Equally
outstanding are the efforts to give maintenance to schools in Toquepala,
cuajone and ilo.
HEALTH AnD nuTRiTiOn
Preventive health campaigns were held in different districts of the Jorge
Basadre and candarave, provinces; it has improved the quality of life of many
in these communities and, working closely with the Peruvian government, a
number of initiatives have been launched, such as the telemedicine project,
which will expand the coverage and scope of health services.
The urban Wastewater Treatment Plant in the district of camilaca started
operations, which will increase access to drinking water; this project has
improved distribution, regulation and supply operations. Similarly, it will
prevent sewage from polluting the environment and will provide treated
water for agricultural and forestry use.
41
2014
74%
OF WATER RECOVERED
WATER
+
Close cooperation with
municipalities and different
institutions and organizations,
representing the region, has given
tangible results that improve
the living conditions of local
residents, allowing an increase of
local production capacities and
better marketing processes in the
communities through studies and
research.
ANNUAL REPORT 2014 42
The fifth publication of the Xocoyo Collection was “Corn”. With the income, we
supported La Casa del Sol A.C., located in Puebla. This civil association houses 60
children in situation of abandonment, abuse, orphanage, loss and health problems.
DIVISIÓN TRANSPORTE Southern copper corporation has also taken part in
ilabaya, the “Oregano Growers of ilabaya” programme
43
the “candarave nourishment Programme” which,
has enhanced production, as a result of the modern
after working five years with the population, has
irrigation project implemented in Poquera, chulibaya,
reduced chronic malnutrition and anaemia rates by
and Ticapampa.
11% and 33%, respectively, thus benefiting more than
600 children, from newborns to 5 year olds and 190
With such actions as those mentioned above, Southern
expecting mothers in the provinces of cairani, camilaca,
copper corporation is working to strengthen social
candarave, curibaya, Huanurara and Quilahuani.
development; the funds provided to strengthen the
productive and commercial capacities in a number of
inFRASTRucTuRE AnD PROMOTiOn OF THE FARMinG
regions in this Andean country, have consolidated our
SEcTOR
Meaningful Development vision and shown the positive
With the implementation of 14 projects to improve
results achieved with consensus and dialogue with the
irrigation channels and techniques to upgrade water
communities that are host to our operations.
infrastructure, and the installation of water treatment
plants, we have managed to increase crop productivity
With this vision of dialogue, and after holding informative
in candarave. in 2014, tangible results have been
workshops and public hearings to address the concerns
achieved both in the marketing of quinoa (an Andean
of stakeholders from different sectors and the civil
grain) and oregano, and in animal health and permanent
society, in 2014 both the Toquepala expansion project
veterinary care.
in addition, emergency response
and the new Tía María mining project were approved.
programs have been implemented to face cold waves,
a weather condition that affects crop and farm yields;
community development is not a matter of one single
accordingly, the company supports the region with the
area of the company; it is what our company is all about,
provision of fodder and concentrated feed for livestock,
and is reflected in the lifestyles of all its employees and
as well as fertilizer for crops.
contractors. We are grateful for their willingness, as it
allows our staff to express themselves and participate
Working together with two associations of local
as active emissaries, able to positively transform the
producers in the province of Jorge Basadre, a number
lives of the community where they work, and collectively
of livestock production projects have been developed
creating social value to drive sustainability.
in the district of ite, which have been successful
thanks to the advice provided on dairy production and
in Southern copper corporation, we will always
animal health campaigns. Moreover, in the province of
firmly keep our commitment to continually improving
ANNUAL REPORT 2014 44
Community development is a way of being of our Company, which is expressed in the
lifestyles of all its employees and contractors. We are grateful for their willingness which
allows our members to express and participate as active spokespersons, able to positively
transform societies where they work, creating together social value to drive sustainability.
the quality of life of the communities where we operate, by encouraging
community integration structures and its collective involvement, which will
result in the common good and make people the key agents of development.
cOMMuniTY OuTREAcH
45
In 2014, 242,203 people were benefited by 24 premieres which represents 3.673
percent increase over the previous year.
ANNUAL REPORT 2014 46
CHAPTER FOuR
47
US$5,787.7
net sales in 2014 (in million)
RESULTS OF
OPERATIONS
In 2014, EBITDA registered a new record, totaling
uS$208 million, 90% above the previous year.
ANNUAL REPORT 2014 48
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.
RESuLTS OF
OpERATIONS
The years ended December 31, 2014, 2013 and 2012.
Our net income attributable to Scc in 2014 was $ 1,333.0 or diluted
earnings per share of $1.61, compared with net income attributable to Scc
of $1,618.5 million or diluted earnings per share of $1.92 in 2013, and
net income attributable to Scc of $1,934.6 million or diluted earnings per
share of $ 2.28 in 2012.
Operating cash cost: The company presents its operating costs both
including and excluding the revenues of its byproducts (molybdenum, silver,
sulfuric acid, etc.). Excluded from its calculation of operating cash cost are
RESuLTS OF OPERATiOnS
the cost of purchases of third parties metal, depreciation, amortization and
depletion, exploration, workers participation provisions and other items of
non-recurring nature, and the royalty charges.
The company’s operating cash cost, as previously defined, for the three
years ended December 31, is as follows:
49
Operating cash cost without by-product revenues
Operating cash cost with by-product revenues
2014
2013
2012
(dollar per pound)
1.90
1.00
1.73
0.71
1.89
1.05
As seen on the previous chart, operating cash cost per pound of copper
without by-product credits was $0.01 less than in 2013, a decrease of
0.5%, mainly due to the unitary cost dilution, higher production in all of
our operations, but principally in Buenavista. This increase in production
volume, more than offsets cost inflation, which increased costs for fuel,
energy and other operation materials of our production process.
net Sales: net sales in 2014 were $5,787.7 million, compared to $5,952.9
million in 2013, a decrease of $165.2 million or 2.8%. 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 78.0% of
net sales in 2014, compared to 78.2% in 2013. Sales of by-products in
2014 totaled $1,269.7 million, compared to $1,298.1 million in 2013, a
decrease of 2.2%.
ANNUAL REPORT 2014
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
2014
2013
2012
Average metal prices
copper (per pound - LME)
$ 3.11
$ 3.32
$ 3.61
copper (per pound - cOMEX)
$ 3.12
$ 3.34
$ 3.61
Molybdenum (per pound)
$ 11.30
$ 10.26
$ 12.62
Zinc (per pound - LME)
$ 0.98
$ 0.87
$ 0.88
Silver (per ounce - cOMEX)
$ 19.04
$ 23.82
$ 31.19
SALES VOLUME (IN ThOUSANDS)
2014
2013
2012
copper (pounds)
1,448.0
1,382.4
1,414.6
Molybdenum (pounds) (1)
51.0
43.9
40.2
Zinc (pounds)
Silver (ounces)
201.5
218.5
205.9
14.6
16.6
16.2
(1) The company´s molybdenum production is sold in the form of concentrates. Volume represents
pounds of molybdenum contained in concentrates.
50
23
2014
23%
INCREASE IN PRODUCTION
EXPANSION
SINCE SCC ANNOUNCED ITS
EXPANSION PLAN, DURING
THE THIRD qUARTER OF
2010,
OUR PRODUCTION
HAS INCREASED 23%.
RESuLTS OF OPERATiOnS
In 2014, our Mining Division achieved a annual record of 847,387 tons of
copper, which exceeded our 2014 production budget of 837,000 tons.
51
ANNUAL REPORT 2014 52
In 2014, our budget for social investment programs was increased
57%, compared with 2013, mainly due to investment in the new General
Hospital of Cananea.
LETTER TO SHAREHOLDERS CHAPTER FIVE
53
$24.4
MEXICAN OPERATIONS
SOCIAL
RESPONSAbILITY
ANNUAL REPORT 2014 54
uS $ 18.9 million was the investment in the New General Hospital in Cananea. It was
inaugurated by Guillermo Padres, State Governor; Mercedes Juan Lopez, Federal Secretary of
Health; and our CEO Oscar Gonzalez Rocha.
2014
40,000
PEOPLE WERE BENEFITED
HOSPITAL
+
DURING 2014, THE NEW
GENERAL HOSPITAL OF
CANANEA WAS
INAUGURATED, AN
ESTIMATED OF 40,000
INHABITANTS OF
THE REGION HAvE BEEN
BENIFITED.
SOciAL RESPOnSABiLiTY
ENVIRONmENTAL mATTERS
55
The company has instituted extensive environmental
surface of the tailings dams and the implementation
conservation programs at its mining facilities in Peru
of scrubbing technology in the mines to reduce dust
and Mexico. The company’s environmental programs
emissions.
include, among others, water recovery systems to
conserve water and minimize impact on nearby
Environmental capital expenditures in years 2014,
streams, reforestation programs
to stabilize
the
2013 and 2012, were as follows (in millions):
Mexican operations
Peruvian operations
Total
2014
$ 24.4
127.0
$ 151.4
2013
2012
$ 39.8
$
27
76.9
20.7
$ 116.7
$ 47.7
Mexican operations: The company’s operations
companies that violate environmental laws, which in
are subject to applicable Mexican federal, state and
the most extreme cases may result in the temporary
municipal environmental laws, to Mexican official
or permanent closing of non-complying facilities, the
standards, and to regulations for the protection of the
revocation of operating licenses and/or other sanctions
environment, including regulations relating to water
or fines. Also, according to the federal criminal code,
supply, water quality, air quality, noise levels and
PROFEPA must
inform corresponding authorities
hazardous and solid waste.
regarding environmental non-compliance.
The principal legislation applicable to the company’s
in January 2011, Article 180 of the General Law
Mexican operations is the Federal General Law of
was amended. This amendment, gives an individual
Ecological Balance and Environmental Protection (the
or entity the ability to contest administrative acts,
“General Law”), which is enforced by the Federal
including environmental authorizations, permits or
Bureau of Environmental Protection (“PROFEPA”).
concessions granted, without the need to demonstrate
PROFEPA monitors compliance with environmental
the actual existence of harm to the environment,
legislation and enforces Mexican environmental
natural resources, flora, fauna or human health,
laws, regulations and official standards. PROFEPA
because it will be sufficient to argue that the harm
may
initiate administrative proceedings against
may be caused. in addition, in 2011, amendments
ANNUAL REPORT 2014
56
to the civil Federal Procedures code (“cFPc”) were
On August 19, 2014, PROFEPA, as part of the
published in the Official Gazette and are now in
administrative proceeding initiated after the spill,
force. These amendments establish three categories
announced the filing of a criminal complaint against
of collective actions by means of which 30 or more
BVc and those determined to be responsible for the
people claiming injury derived from environmental,
environmental damages. The criminal complaint filed by
consumer protection, financial services and economic
PROFEPA against BVc is in the procedural stages. The
competition issues will be considered to be sufficient
company is vigorously defending against it. According
in order to have a legitimate interest to seek through a
to the Mexican Environmental Responsibilities Federal
civil procedure restitution or economic compensation
Law, administrative fines and sanctions could go
or suspension of the activities from which the alleged
upward to 40 million Mexican pesos (approximately $3
injury derived. The amendments to the cFPc may result
million). Additional sanctions or fines may be imposed,
in more litigation, with plaintiffs seeking remedies,
including the cost of cleanup and remediation of the
including suspension of the activities alleged to cause
polluted sites, as well as economic compensation to
harm.
individuals who may have suffered damages as a result
of the spill, provided that direct damages are proven.
in June 2013, the Environmental Liability Federal Law
was published in the Official Gazette and became
effective one month thereafter. The law establishes
On September 15, 2014, BVc, in agreement with
general guidelines in order to determine which
the Mexican Federal Government, established a
environmental actions will be considered to cause
trust of up to two billion pesos (approximately $150
environmental harm that will give rise to administrative
million) to support the remedial efforts that BVc had
responsibilities
(remediation or compensations),
already undertaken, to comply with the environmental
criminal responsibilities as well as monetary fines.
remediation plan and to pay, as the case may be,
material damages to the riverside residents of the
The accident was caused by a rock collapse that
seven counties affected by the spill. in 2014, BVc
affected the system’s pumping station and by a
estimated the contingent liability at $91.4 million, of
construction defect in the seal of a pipe in the leaching
which $16.4 million had been paid previous to the
system containment dam, a part of the new SX-EW
establishment of the trust, and approximately one billion
iii plant. This solution reached the Bacanuchi River, a
pesos (approximately $74.9 million) was deposited in
branch of the Sonora River. All the immediate actions
the trust. These funds have been available and have
were properly taken in order to contain the spill, and to
been used to compensate claims as they have arisen.
comply with all the legal requirements.
This deposit was classified as restricted cash and
SOciAL RESPOnSABiLiTY
57
2014
6,500
HOUSES W ITH ENERGY
+
On August 6, 2014, an accidental spill of approximately
40,000 cubic meters of copper sulfate solution occurred
at a leaching pond that was under construction ten
kilometers away from the mine of Buenavista del Cobre,
S.A. de C.V. (“BVC”) a subsidiary of the Company.
was recorded as an operating expense in the 2014 results. A technical
committee was created to manage the funds, comprised of representatives
from the federal government, the company and specialists assisted by a
team of environmental experts. The trust established by the company and
the administrative agreement executed with the corresponding Federal
authorities, serves as an alternative mechanism for dispute resolution to
mitigate public and private litigation risks.
A TECHNICAL
COMMITTEE WAS
CREATED TO MANAGE
THE FUNDS,
COMPRISED OF
REPRESENTATIvES
FROM THE FEDERAL
GOvERNMENT, THE
COMPANY
AND SPECIALISTS
ASSISTED BY A TEAM
OF ENvIRONMENTAL
EXPERTS.
ANNUAL REPORT 2014 58
Our environmental programs include water, water recovery systems to reduce
consumption and minimize the impact on nearby streams, reforestation programs for
stabilize surface of the tailings dams and the implementation of scrubbing technology in
the mines to reduce dust emissions.
2014
120%
INCREASED PRODUCTION TREES
TREES
+
SCC INCREASED 120% ITS
PRODUCTION CAPACITY OF
TREES FROM 2012 TO 2014
SOciAL RESPOnSABiLiTY
On november 27, 2014, a remediation program was
metallurgical operations. Through these environmental
59
presented before SEMARnAT, the federal agency
audits, matters related to environmental obligation,
of environment and natural resources, which was
compliance with legal requirements, atmospheric
approved on January 6, 2015.
emissions, effluent monitoring and waste management
On December 31, 2014, PROFEPA
initiated an
compliance with applicable Peruvian environmental
are reviewed. The company believes that it is in material
administrative proceeding directly derived from the
laws and regulations.
spill, which is still in its initial stages. The national
commission for Water (“cOnAGuA”), and the Federal
Peruvian law requires that companies in the mining
commission for the Protection against Sanitary Risks
industry provide assurances for future closure and
(“cOFEPRiS”), have initiated certain proceedings,
reclamation. in accordance with the requirements of
not directly linked to the spill, to monitor company’s
this law, the company’s closure plans were approved
compliance with the applicable environmental laws.
by MinEM. As part of the closure plans, the company
in addition, the company has been served with three
is providing guarantees to ensure that sufficient funds
collective action lawsuits seeking damages for injuries
will be available for the asset retirement obligation.
related to the spill, which are in an early procedural
See note 9 “Asset retirement obligation,” for further
stages. For a description of collective actions in Mexico
discussion of this matter.
refer to the 2011 amendments to the cFPc described
in 2008,
the Peruvian government enacted
above. The company asserts that these lawsuits are
environmental regulations establishing more stringent
without merit and is vigorously defending against them.
air quality standards (“AQS”) for daily sulfur dioxide
(“SO2”) emissions for the Peruvian territory. These
The company reasonably considers that none of the
regulations, as amended in 2013, recognize distinct
legal proceedings resulting from the spill, individually
zones/areas, as atmospheric basins. As part of these
or in the aggregate, would have a material effect on its
regulations, MinAM was required to carry-out a 12
financial position or results of operations.
month ambient air monitoring period, prior to January
1, 2014, to establish SO2 levels. Those areas with a
Peruvian operations: The company’s operations are
mean 24-hour SO2 concentration equal or less than 20
subject to applicable Peruvian environmental laws
micrograms per cubic meter (“ug/m3”) are required to
and regulations. The Peruvian government, through
develop programs to maintain this level of compliance.
the Ministry of Environment (“MinAM”) conducts
Those areas or cities exceeding the mean 24-hour SO2
annual audits of the company’s Peruvian mining and
concentration of 20 ug/m3 will be required to establish
ANNUAL REPORT 2014 an action plan to address this problem and are required to achieve the 20
ug/m3 AQS in the future. 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 80ug/
m3 of SO2. The ilo basin is one of these three areas and the company’s
smelter and refinery are part of the area. A supreme decree issued on April
8, 2014, indicates that the company should review its compliance with
these regulations and develop a modification plan to reach compliance.
The company is working with an environmental technical study group,
established by a MinAM resolution to identify air quality issues and develop
plans to comply with the pertinent regulations.
in 2013, the Peruvian government enacted new soil environmental quality
standards (“SQS”) applicable to any existing facility or project that generates
or could generate risk of soil contamination in its area of operation or
influence. in March 2014, MinAM issued a supreme decree which
establishes additional provisions for the gradual implementation of SQS.
under this rule the company has twelve months to identify contaminated
sites in and around its facilities and present a report of identified
60
2014
74%
OF WATER RECOVERED
WATER
+
IN 2014, 74%
OF TOTAL WATER
CONSuMPTION
IN OuR MINING
OPERATIONS
WAS RECOVERED WATER,
MINIMIZING
CONSuMPTION AND
DEMAND OF FRESH
WATER
LETTER TO SHAREHOLDERS contaminated sites. if such sites exist, the company
The company believes that all of its facilities in Mexico
61
must submit a decontamination plan for approval within
and Peru are in material compliance with applicable
24 months from the date it is notified by the authority.
environmental, mining and other laws and regulations.
This decontamination plan shall include remediation
actions, a schedule and compliance deadlines. Also,
The company also believes that continued compliance
under this rule, if deemed necessary, the company
with environmental laws of Mexico and Peru will not
may request a one year extension, given sound
have a material adverse effect on the company’s
justification. Soil confirmation tests must be carried
business, properties, result of operations, financial
out after completion of decontamination actions (within
condition or prospects and will not result in material
the approved schedule) and results must be presented
capital expenditures.
to the authorities within 30 days after receiving such
results. non-compliance with this obligation or with
decontamination goals will carry penalties, although no
specific sanctions have been established yet. During
compliance schedule, companies cannot be penalized
for non-compliance with the SQS. in the fourth quarter
of 2014, the company selected the consultant to carry
out soil samplings, studies and other requirements of
the rules.
ANNUAL REPORT 2014 62
LETTER TO SHAREHOLDERS CHAPTER SIX
63
84.6%
In 2014, AMC increased
its interest in SCC
GENERAL
INFORMATION
Minera Mexico engages primarily 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 “La Caridad unit”) operates La Caridad, an open-pit copper mine, a copper ore
concentrator, a SX-EW plant, a smelter, refinery and a rod plant.
ANNUAL REPORT 2014 64
The new ore thick warehouse with a capacity of 300,000 tons, 120 meters in diameter
and 50 meters high, works as an environmental measure avoiding dust dispersion.
GENERAL INFORmATION
information related to its constitution and their inscription in the Public
Registry:
See: “Brief historical review from the constitution of the company” on page
67. Brief Description: Southern copper corporation is one of the largest
integrated copper producers in the world. We produce copper, molybdenum,
zinc, lead, coal and silver. All of our mining, smelting and refining facilities
are located in Peru and in Mexico and we conduct exploration activities in
those countries and in chile, Ecuador y Argentina. Our operations make us
one of the largest mining companies in Peru and also in Mexico. We are one
of the largest copper mining companies in the world with significant copper
reserves. We were incorporated 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.
GEnERAL inFORMATiOn
65
Our Peruvian copper operations involve mining, milling and flotation of copper
ore to produce copper concentrates and molybdenum concentrates, the
smelting of copper concentrates to produce anode copper, and the refining
of anode copper to produce copper cathodes. As part of this production
process, we also produce significant amounts of molybdenum concentrate
and refined silver. We also produce refined copper using SX/EW technology.
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 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.
7.5%
2014
7.5%
INCREASE IN SALES
SALES
+
OUR OPERATIONS HAvE A
HIGH LEvEL OF vERTICAL
INTEGRATION THAT ALLOWS
US TO MANAGE THE ENTIRE
PRODUCTION PROCESS.
ANNUAL REPORT 2014 66
We utilize modern/state of the art mining and processing
the entire production process, from the mining of the ore
methods, including global positioning systems and
to the production of refined copper and other products
computerized mining operations. Our operations have a
and most related transport and logistics functions, using
high level of vertical integration that allows us to manage
our own facilities, employees and equipment.
EcONOmIc GROup
Scc, indirectly, makes part of “Grupo Mexico S.A.B. de c.V.” who owns 100% of Americas Mining corporation
(“AMc”).
Name of the
company
SEVERAL ACTIVITIES
Domicilio Inscripcion
en el 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
Mexico
Mexico
infraestructura y Transportes Mexico, S.A. de c. V.
Mexico
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
EE.uu.
EE.uu.
EE.uu.
Mexico
Mexico
Mexico
Mexico
EE.uu.
Southern Peru copper corporation, Agencia en chile
chile
100
100
100
84.6
100
99.95
99.99
99.99
98.14
100
100
Southern Peru copper corporation, Sucursal del Peru
compañia Minera Los Tolmos, S.A.
Peru
Peru
99.291
97.3
1 include 82.69% of common shares and 16.60% of investment shares.
GEnERAL inFORMATiOn
LA CARIDAD SMELTER
It started its production with a capacity of 493 t / d of anodes in July 1986 and
expanded its capacity to 822 t / d of anodes in March 1997.
67
ANNUAL REPORT 2014 68
The new copper molybdenum concentrator has an annual production capacity of
188,000 tons of copper and 2,600 tons of molybdenum. The project will additionally
produce 2.3 million ounces of silver and 21,000 ounces of gold per year. The total
capital budget of the project is $1,383.6 million and through December 31, 2014, the
project has an 92.2% progress with an investment of $978.5 million.
GEnERAL inFORMATiOn
Corporate Capital and Common Stock
The authorized number of shares
issues an Paid capital: common Shares
nominal Value of common Shares
Capital Structure
Americas Mining corporation
common Shares
Total
Shares
69
2,000,000,000
884,596,086
$ 0.01
Shares
687,275,997
125,342,125
Interest
84.6%
15.4%
812,618,122
100.0%
OpERATIONS IN mEXIcO
La Caridad Mine
La Caridad Metallurgic Complex
“La caridad concentrator” started operations in 1979,
La caridad Smelter started operations in July, 1986,
with a milling capacity of 90,000 tons per day.
with a production capacity of 493 tons of anode per day
and was expanded to 822 tons in March, 1997.
“Molybdenum Plant” started operations in 1982,
with a production capacity of 2,000 tons of copper-
“La caridad Refinery” started operations in July, 1997,
molybdenum concentrate per day.
with a production capacity of 493 tons of copper cathode
per day and was expanded to 822 tons in January, 1998.
-“La caridad SX-EW” started operation in 1995 and
has a daily production capacity of 66 tons of copper
“La caridad Precious Metals Plant” started operations
cathodes. Approximately 663.3 million tons of leach
in May, 1999, with a production capacity of 43,836
ore with an average grade of approximately 0.247%
ounces of silver per day, 247 ounces of gold per day
copper have been extracted from the La caridad open-
and 342 kilograms of selenium per day.
pit mine and deposited in leaching dumps from May
1995 to December 31, 2012.
“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.
ANNUAL REPORT 2014
70
Buenavista Mine
Underground mines
“Buenavista concentrator”
started
operating
in
1.- The Santa Barbara unit with a milling capacity of
September, 1986, with a capacity of 62,500 tons per day;
5,800 tons of ore per day.
the capacity was expanded to 70,000 tons in 1988 and to
2.- The Santa Eulalia unit with a milling capacity of
76,700 tons in 1998.
1,450 tons of ore per day.
3.- The San Martin unit with a milling capacity of 4,400
“Buenavista SX/EW i Plant” started operating in 1980,
tons of ore per day.
with a capacity of 30 tons per day.
4.- The charcas unit with a milling capacity of 4,100
tons of ore per day.
“Buenavista SX/EW ii Plant” started operating in 1989,
5.- The Taxco unit with a milling capacity of 2,000 tons
with a capacity of 66 tons per day and was expanded to
per day.
120 tons per day in 2001.
6.- coquizadora coal Plant, in coahuila unit, with a
capacity of 105,000 tons of coke per year.
“Buenavista SX/EW iii Plant” started operating during the
7.- The Zinc Refinery with a capacity of 288 tons per
fourth quarter of 2014, we completed the construction of a
day.
new SX-EW plant that is expected to significantly increase
production of
leachable material by approximately
120,000 tons per year. (See 10K, on page 64).
GEnERAL inFORMATiOn
pERuVIAN OpERATIONS
TOquEPALA
71
1. Toquepala concentrator. Directorial Resolution
2. oquepala Leaching Plant
(SX/EW). Directorial
no.455-91-EM/DGM/DcM dated July 5, 1991
Resolution no. 166-96-EM/DGM dated May 7,
approved the operation of the Toquepala concentrator.
1996, approved the operation of the Toquepala SX/
The resolution granted 240 hectares of surface land
EW plant. The resolution granted 60 hectares of
and authorized a throughput of 39,000 tons/day.
surface land and authorized a throughput of 11,850
Based on Report no. 413-97-EM/DGM/DPDM
tons/day.
dated July 7, 1997 the “Director General de
Based on Report no. 663-98-EM-DGM/DPDM
Mineria” authorized the expansion of the Toquepala
dated november 10, 1998 the “Director General
concentrator to a 43,000 tons/day throughput.
de Mineria” authorized construction and expansion
of Toquepala SX/EW plant to 18,737 tons/day
Based on Report n° 547-2002-EM/DGM/DPDM,
throughput. Directoral Resolution dated May 19,
dated november 6, 2002, the “Director General de
2003, based on Report no. 291-2003-EM-DGM/
Mineria” authorized the expansion of the Toquepala
DPDM, authorized operation of the SX/EW plant to
concentrator to a capacity of 60,000 MT per day.
a throughput of 18,737 tons/day.
Our Peruvian copper
operations involve mining,
milling and flotation of
copper ore to produce
copper and molybdenum
concentrates, the smelting
of copper concentrates
to produce anode copper,
and the refining of anode
copper to produce copper
cathodes.
ANNUAL REPORT 2014
72
CuAJONE
1. Botiflaca concentrator in cuajone: Directorial
of the installed capacity from 87,000 to 90,000
Resolution no. 150-81-EM/DcM dated August
MT per day.
14, 1981 approved the operation of Botiflaca
concentrator. The resolution granted 56 hectares
2. cuajone Leaching Plant
(LX/EW). Directorial
of surface land.
Resolution no.155-96-EM/DGM dated May 6,
1996 approved the operation of the cuajone
Based on Report no. 266-99-EM/DGM/DPDM
Leaching plant. The resolution granted 400
dated July 20, 1999 the “Director General de
hectares of surface
land and authorized a
Mineria” authorized the expansion of Botiflaca
throughput of 2,100 MT per day. Based on Report
concentrator to 87,000 MT per day throughput.
no. 988-2009-MEM-DGM/V, dated December 16,
2009, cuajone SX plant operation was approved
Resolution n° 379-2010-MEM-DGM/V dated
and authorized the of the, with a capacity of 3100
October 7, 2010, based on Report n°312-2010-
MT per day.
MEM-DGM-DTM/PB, authorized construction and
expansion of Botiflaca concentrator to 90,000 MT
ILO
per day throughput.
1.
ilo Smelter: Authorized (definitely) by Directorial
Resolution no. 078-69-EM/DGM dated August 21,
For operating reasons as part of the crusher
1969 approved the operation of the ilo Smelter.
process optimization, on november 8, 2012, we
The resolution authorized a production of 400
requested to the Peruvian authorities through
Short tons/day of blister copper.
resources n° 214491 to add three additional
facilities (HPGR mill and others).
Based on Report no.204-2000-EM-DGM-DPDM
dated June 20, 2000 the “Director General de
With Directoral Resolution n° 153-2012-MEM-
Mineria” authorized the expansion of the ilo
DGM-V based on report 165-2012-MEM-DGM-
Smelter to a 3,100 MT per day throughput of
DTM-PB. MEM approved and authorized the project
copper concentrates.
to include three additional facilities aforementioned
on the procedure of the amendment and increase
GEnERAL inFORMATiOn
73
On February 4, 2010, the company began the
3. Sulfuric Acid Plant: Authorized by Directorial
process to obtain authorization from the MinEM to
Resolution no. 024-96-EM/DGM dated January
operate a capacity of 3,770 MT per day, which is
19, 1996, approved the operation of the sulfuric
included as an ancillary facility to Acid Plant no. 2,
acid plant, installed at the smelter, at a production
with a capacity of 2,880 MT per day or 1,051,200
rate of 150,000 tons per year.
MT per year.
2.
ilo Refinery: Authorized by Report no. 056-94-EM/
dated May 21, 1998 the “Director General de
DGM/DRDM dated May 27, 1994 the “Director
Mineria”, authorized the expansion of the ilo
General de Mineria” authorized the operation
Sulfuric Acid Plant to a capacity of 300,000 tons
Based on Report no. 313-98-EM/DGM/DPDM
of the ilo copper Refinery at 533 MT per day
per year production.
throughput of blister copper.
Based on Report no. 506-97-EM/DGM/DPDM
4. “coquina Wash Plant and Sea shell concentrates”
dated September 2, 1998 the “Director General
authorized to operate by Directorial Resolution nº
de Mineria” authorized the expansion of ilo
110-93-EM/DGM of August 3, 1993. The plant
copper Refinery to a capacity of 658 MT per day
processes 95 Tc/h of raw material (coquina)
throughput.
recovered from nearby mines. Seashell is produced
separating sand and other materials from the
Based on Report n° 080-2002-EM-DGM/DPDM,
coquina using sea water washing screens.
dated March 14, 2002, the “Director General
de Mineria” authorized the expansion of the ilo
Resolution n°038-2011-MEM-DGM-DTM/PB dated
copper Refinery to a capacity of 800 MT per day.
February 2, 2012, based on Report n°035-2011-
MEM-DGM-DTM/PB, authorized modification in the
Resolution n°520-2010-MEM-DGM/V
dated
concession of “coquina Wash Plant and Sea shell
December 30, 2010, based on Report n° n°414-
concentrates” to a classified dry sea shell plant without
2010-MEM-DGM-DTM/PB, authorized changes in
expanded its capacity throughput, which represents
ilo copper refinery without expanded its capacity
2,068 tons/day.
throughput.
ANNUAL REPORT 2014
74
Description of
Operations
and Development regarding
the issuing entity Purpose
17%
2014
23,290
TONS
MOLYBDENUM Mo +
PRODUCTION OF
MOLYBDENUM IN 2014
INCREASED 17 %
COMPARED WITH 2013,
REACHING 23,290 TONS,
A NEW RECORD
The average price of molybdenum in 2014 was uS $ 11.39 / lb , an increase of 10 %
over 2013.
GEnERAL inFORMATiOn
The purpose of Southern copper corporation (Scc)
Actions following company incorporation:
75
is to engage in activities allowed by the laws of the
capital increase:
State of Delaware. its main activity is to extract,
By Public Deed dated May 31, 1995, signed before
mill, concentrate, smelt, treat, prepare for market,
notary public of Lima, Dr. carlos A. Sotomayor Bernos,
manufacture, sell, exchange and, in general, to produce
the Branch capital increase was formalized. it was
and negotiate for sales of copper, molybdenum, gold,
made through money contribution by the company in
silver, lead, zinc, iron and any other class of minerals
favor of its Peru Branch and by the owners of labor
and materials or other materials, effects and goods of
shares, pursuant to Legislative Decree no. 677.
any nature or description; as well as to explore, exploit,
The capital contribution made by the company was
sample, examine,
investigate,
recognize,
locate,
aimed at increasing the capital allotted to the Branch
appraise, buy, sell, exchange, etc., mining concessions
by the headquarters and registered in Peru. The
and mining deposits. Scc belongs to the ciiu 1320
capital contribution made by the Labor Shares (today
group.
investment Shares) owners was assigned to the Labor
Shares account of the Branch for issuing new Labor
The term of duration of the company is indefinite.
Shares.
Brief historical review from the constitution of the
Part of the money contribution made by the company
company:
in favor of its Branch and by the Labor Shares owners
The company was organized on December 12, 1952,
was applied as a capital premium to the Resident
according to the Laws of the State of Delaware of
account as Additional capital.
the united States of America, under the original
denomination of Southern Peru copper corporation
Exchange of investment Shares (Labor Shares) for
(“SPcc”), which was renamed on October 11, 2005,
common Shares:
to Southern copper corporation (Scc).
Dated September 7, 1995, “Southern Peru copper
Holding company” was also incorporated pursuant to
in 1954, Scc established a Branch in Peru to carry
the Laws of the State of Delaware, aiming at acting as
out mining activities in this country. The Branch was
a holding company that owns all Southern Peru copper
established under public instrument certified by Public
corporation shares, and at performing an exchange of
notary from Lima, Dr. Ricardo Fernandini Arana, on
the shares that were then called “Labor Shares” (today
november 6, 1954.
investment Shares) issued by the branch in Peru,
delivering the owners of labor shares a certain number
The Branch is registered in the Electronic Record
of common shares issued by SPcc in the united
nº 03025091 of the Juridical People of the Registry
States. As a consequence of this share exchange,
Office of Lima and callao.
former owners of Labor Shares acquired 17.31% of
ANNUAL REPORT 2014 76
The new primary crushing building, in Buenavista open pit, has a capacity to process up
to 400,000 tons per day.
This will be the first installation of its kind to hold 4 breakers. By December
2014, its construction reached 90%.
SPcc’s capital, and this company acquired ownership
one and assumed all its assets and liabilities, including
of 80.77% of Labor Shares (today investment Shares).
the Branch in Peru. This merger did not imply any
change to the share percentage in the corporate
On December 31, 1995, Southern Peru copper
capital or in the net Worth Share Account (investment
corporation changed its corporate name to “Southern
shares), which were kept the unchanged.
Peru Limited”, and “Southern Peru copper Holding
company” changed its corporate name to Southern
As a consequence of the merger, the mining activities
Peru copper corporation.
of the corporation in Peru were again carried out under
As a consequence of this corporate name change, the
Branch, or the abbreviated name of “Southern Peru”
the name of Southern Peru copper corporation, Peru
mining activities of the company in Peru started being
and/or the acronym SPcc.
performed under the name of Southern Peru Limited,
Peru Branch (SPL).
change of Economic Group:
in november 1999, Grupo Mexico S.A.B. de c. V.,
On December 31, 1998, the merger between Southern
a firm incorporated pursuant to the Laws of the
Peru copper corporation and Southern Peru Limited
Republic of Mexico, acquired in the united Stated
was agreed. The first company absorbed the second
100% of ASARcO incorporated, the main shareholder
GEnERAL inFORMATiOn
of Southern Peru copper corporation at that time. in
which represent $1,842.3 million. These shares are
77
this way, SPcc became a subsidiary of Grupo Mexico,
available for general corporate purposes. The company
who keeps its shareholding through Americas Mining
may purchase additional shares of its common stock
company (AMc).
from time to time, based on market conditions and
Acquisition of Minera Mexico, and other corporate
expiration date and may be modified or discontinued
other factors. This repurchase program has no
changes:
at any time.
Scc shareholders, in a shareholder extraordinary
meeting dated March 28, 2005, approved issuance
At December 31, 2014, Grupo Mexico
indirect
of common Shares and required actions related to
ownership is 84.6%.
the acquisition of Minera Mexico, a firm incorporated
pursuant to the Laws of the Republic of Mexico. This
change in the certificate of incorporation:
transaction was approved by more than 90% of the
On March 28, 2005, following Board of Directors
stocks and circulating capital of Scc. To acquire
recommendations, Scc shareholders approved in an
Minera Mexico, Scc issued 67,207,640 shares in
extraordinary meeting the amendments to the Articles
exchange for MM shares. Once the shares related to
of incorporation Deed, changing the composition and
the acquisition were issued, AMc increased its share
obligations of some Board committees.
in Scc from 54.2% to approximately 75.1%.
Special independent Director:
AMc increased its Participation in Scc:
The changes to the Articles of incorporation Deed
in 2008 and 2009 Grupo Mexico, through its wholly
require the Board to include a certain number of special
owned subsidiary AMc, purchased 11.8 million and
independent directors. A special independent director
4.9 million shares of the company’s common Stock,
is a person who (i) complies with the independence
respectively.
standards of the new York Stock Exchange (or any
other stock exchange or association in which common
Scc $500 Million Share Repurchase Program :
Shares are listed) and (ii) is appointed by the Special
in 2008, the company’s Board of Directors (“BOD”)
Appointment committee of the Board. A special
authorized a $500 million share repurchase program
independent director may only be removed from the
that has since been increased by the BOD and is
Board upon a justified cause.
currently authorized to $3 billion. Pursuant to this
program, the company purchased common stock as
The minimum number of special independent directors
from 2008 to December 31th, 2014, the company
in that Directory at any time shall equal (a) the total
purchased 79.9 million shares of its common stock
number of directors in the Board multiplied by (b) the
ANNUAL REPORT 2014 78
percentage of common Shares all the shareholders
independent directors or initial Members. Only special
(that are not Grupo Mexico and its affiliates) have,
independent directors can fill vacancies on the Special
rounding up
to
the
following
integer number.
nominating committee. Any member of the Special
notwithstanding the abovementioned, the total number
nominating committee may be removed at any time
of people appointed as special independent directors
by the Board of Directors for cause. The unanimous
(not belonging to Grupo Mexico) cannot be less than
vote of all members of the nominating committee will
two or more than six.
be necessary for the adoption of any resolution or the
Special nominating committee:
taking of any action.
The Special nominating committee functions as a
Our Amended and Restated certificate of incorporation,
special committee to nominate special independent
as amended, provides that the minimum number of
directors to the Board. Pursuant to our Amended and
special independent directors on the Board of Directors
Restated certificate of incorporation, as amended, a
at any given time shall be equal to (a) the total number
special independent director is any director who (i)
of directors on the Board of Directors multiplied by
satisfies the independence requirements of the new
(b) the percentage of common Stock owned by all
York Stock Exchange or nYSE (or any other exchange or
of the stockholders (other than Grupo Mexico and
association on which the common Stock is listed) and
its affiliates), rounded up to the next whole number.
(ii) is nominated by the Special nominating committee.
notwithstanding the foregoing, the total number of
The Special nominating committee has the right to
persons nominated as special independent directors
nominate a number of special independent directors
cannot be less than two or greater than six.
based on the percentage of our common Stock owned
by all holders of our common Stock, other than Grupo
notwithstanding the foregoing, the power of the
Mexico and its affiliates.
Special nominating committee to nominate special
independent directors is subject to the rights of the
The Special nominating committee consists of two
stockholders to make nominations in accordance with
directors (2) of whom are Luis Miguel Palomino and
our by-laws.
carlos Ruiz Sacristan (each an “initial Member” and,
together with their successors, “Special Designees”)
The provisions of the Amended and Restated certificate
and such other director, currently Xavier Garcia de
of incorporation, as amended, relating to special
Quevedo Topete, as may be appointed by the Board
independent directors may only be amended by the
of Directors or the “Board Designee”. The Board
affirmative vote of a majority of the holders of shares of
Designee will be selected annually by the Board of
common Stock (calculated without giving effect to any
Directors. The Special Designees will be selected
super majority voting rights) other than Grupo Mexico
annually by the members of the Board who are special
and its affiliates.
GEnERAL inFORMATiOn
79
The Company believes that all of its facilities in Mexico and Peru 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.
ANNUAL REPORT 2014 80
As a result of the investments in
Buenavista, this will become the
third mine in the world, in terms
of production.
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
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.
81
Additionally, on the same date, the majority shareholder
from sales, its financial and economic revenues and
approved an amendment of our Articles of incorporation
its solvency, the Board of Directors agreed to maintain
Deed to remove others’ provisions in our Deed related
the original corporate name to the Peru Branch, that
with our class A common Shares that were formerly in
is, Southern Peru copper corporation, Peru Branch,
circulation, which were converted to common Shares
or the abbreviated name “Southern Peru” and/or the
on May 19, 2005, and to change the number of
acronym SPcc.
corporate directors from fifteen to a number that will
be regularly established following agreement of most
changes in the certificate of Articles of incorporation
of Board members stipulating the number of directors
and Bylaws:
will not be less than six or more than fifteen.
Dated January 26, 2006,
the Board approved
amendment to Southern copper corporation’s bylaws
The Deed amendment was submitted to the Secretary
(i) aiming at removing the provisions related to class
of State of the State of Delaware, and came into effect
A common Shares among other changes.(ii) adding
on October 11, 2005.
a new provision for advance notice to shareholders
seeking to nominate directors or to propose other
Peru Branch name:
business at annual or special meetings of the
Generally, the change of headquarters corporate
common Stockholders (as applicable) (iii) substitute
name should comprise the corresponding name of the
Grupo Mexico for ASARcO incorporated in the
ancillary organizations linked to it, as is the case of the
“change in control” definition in the corporation’s
Peru Branch through which the corporation develops
by-laws (iv) and eliminate the 80% supermajority
its mining activities in Peru.
vote requirement for certain corporate actions. The
modification of the Modified certificate of incorporation
After consulting with Peruvian lawyers, the Board of
increased the capital stock from 167,207,640 shares
Directors, taking into consideration the net worth and
to 320,000,000 shares. These modifications were
assets importance of the Branch, the need to continue
submitted for approval of the shareholders at the
acknowledging the position of the Peruvian Branch with
shareholders annual meeting held on April 27, 2006
its local and international copper clients, the need to
which was adjourned and reconvened for May 4,
preserve its proceeds and its position in good name in
2006, and later on adjourned and reconvened for May
the copper market, and the need to prevent any possible
11, 2006.
client loss, as well as to guarantee the revenue flow
ANNUAL REPORT 2014 82
At the annual meeting, on April 27, 2006, the proposal
the required votes. Because the required vote for the
to amend the by-laws to eliminate certain extraneous
approval of this proposal was 80% and because there
provisions relating to the retired series of class A
were still votes that needed to be tabulated, the annual
common Stock had an affirmative vote of 79.85% of
meeting for this proposal was adjourned first until
the required votes. Because the required vote for the
May 4, 2006, and subsequently until May 11, 2006.
approval of this proposal was 80% and because there
On May 11, 2006, at the adjourned and reconvened
were still votes that needed to be tabulated, the annual
meeting stockholders did not approve the proposal
meeting for this proposal was adjourned until May 4,
having received an affirmative vote of 79.61% of the
2006. On May 4, 2006, at the adjourned and reconvened
required votes.
meeting the stockholders approved the proposal with an
affirmative vote of 80.61% of the required votes.
Scc is indirectly, part of Grupo Mexico S.A.B. de c.V.
which owns 100% of Americas Mining corporation
On April 27, 2006, stockholders approved (i) the
(AMc) shareholding, owner of 84.6% of Scc shares.
amendment to the by-laws to introduce a new
provision for advance notice to shareholders seeking
information about plans and investment policies:
to nominate directors or to propose other business
See capital Expenditures and Exploration on page 16.
at annual or special meetings of the common
Stockholders (as applicable); (ii) the amendment to
Relationship between the issuer and the Government:
the by-laws to substitute Grupo Mexico for ASARcO
On november 20, 1996, Scc and the Peruvian
incorporated in the “change in control” definition in
Government (Ministry of Energy and Mines) signed a
the corporation’s bylaws; (iii) the amendments to the
contract that remained effective until the year 2010
Amended and Restated certificate of incorporation
and guaranteed the tax stability and the availability
to increase the number of shares of common Stock,
of exchange to foreign currency of the Branch’s
which the corporation is authorized to issue from
earnings related to the operation of the SX/EW plant
167,207,640 shares to 320,000,000 shares; and (iv)
at Toquepala and the Solvent Extraction (SX) operation
the selection of the independent accountants.
in cuajone. Also, on April 18th, 1995, Scc and the
Peruvian Government (cOniTE) signed a contract that
On April 27, 2006, the proposal to amend the by-laws
remained effective during ten years and guaranteed
to eliminate the 80% supermajority vote requirement
the availability of foreign currencies, free remittance
for certain corporate actions had received preliminary
of dividends to the exterior, among other guarantees
votes, representing an affirmative vote of 78.35% of
related to the acid plant of the ilo Smelter.
GEnERAL inFORMATiOn
83
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.
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%.
2014
US$689
EBITDA RECORD
EBITDA
ANNUAL REPORT 2014 84
LETTER TO SHAREHOLDERS CHAPTER SEVEN
30%
disabling accidents were reduced
85
MINING
SAFETY IN
SOUTHERN COPPER CORPORATION
We have in place an Integrated Occupational Health
and Safety Management System, which allows us to
control the risks that exist in our operations and to
develop plans of continuous improvement in order to
protect our employees.
ANNUAL REPORT 2014 86
ZERO
ACCIDENTS
OBJETIVES
SCC WORkS UNDER THE
HIGHEST SAFETY
STANDARDS.
The occupational accident rates at our mining
operations in Mexico are 78% below the national
average.
MininG SAFETY
Occupational Health and Safety
87
In Southern Copper Corporation, caring for the life,
SX/EW plant of Mexicana de cobre, and to the
health and integrity of our employees and their families
Santa Eulalia mining unit, for achieving the lowest
is the number one priority in all our operations. No task
recorded accident rates in the industry.
is more important.
• Our mining and metallurgical operations
in
Accordingly, our commitment is to create optimal work
the Smelting, Refining and SX/EW plant
in
environments for their welfare, which we achieve by
Peru achieved the triple recertification as per
working under the highest safety standards. Our goal:
OHSAS:18001,
iSO:14001
and
iSO:9001,
ZERO accidents.
endorsing
its
commitment
to
integrated
sustainability management, including the best
We have in place an integrated Occupational Health
practices in occupational health and safety.
and Safety Management System, which allows us to
control the risks that exist in our operations and to
• The
communities
surrounding
the Santa
develop plans of continuous improvement in order to
Barbara unit in Mexico were certified as Healthy
protect our employees.
Environment by the Ministry of Health, which
recognises the efforts of the company to make
We maintain 12 business units in Mexico and Peru
joint efforts to improve the health of its residents,
whose Occupational Health and Safety Management
and joins the Santa Eulalia unit as holders of this
System have been certified according to OHSAS
certification.
18001:2007. Additionally, in Mexico we have 13 units
certified with the Secretariat of Labour and Social
• The occupational accident rates at our mining
Welfare for the Self-Managed Occupational Health and
operations in Mexico are 78% below the national
Safety (PASST).
average.
The accomplishments achieved
in 2014 on
• The accident rates in our mining operations in
occupational health and safety include:
Peru are 14% below the national average.
• The Mining chamber of Mexico
(cAMiMEX)
•
in the last two years, Scc has reduced its
awarded the “Jorge Rangel Zamorano” Silver
occupational accident rates by 18% and the rate
Helmet Trophy to the nueva Rosita plant, to the
of severe accidents by 45%.
ANNUAL REPORT 2014 88
The accident rate (IR) in the
Mining Division decreased
significantly from 1.09 in
2012 to 0.89 in 2014.
As a result of the work and commitment of our people to safety and health,
at the end of 2014, the accident rate (iR) decreased significantly from 1.09 in
2012 to 0.89 in 2014, showing clearly that our activities to identify and address
risks have reduced the frequency of accidents at our mining operations.
2014
-18%
SEVERITY RATE
in this regard, we recognise that the commitment and effort of our people,
strengthened by training, coaching, responsibility and the implementation
of preventive observation is key to achieving our goals.
SAFETY
SEvERITY RATE
ACCIDENTS IN OUR
MINING DIvISION HAS
DECREASED 18 %
SINCE 2012.
MininG SAFETY
These results reflect the efforts in our activities leading to a culture of
safety, in the implementation of inspection plans, and especially in the work
and commitment of our employees.
Accident Rate (IR)
SCC, 2012-12014
0.85
0.94
1.06
2
0
1
4
2 0 1 3
2 0 1 2
IR =
no. of disabling accidents
no. of total men - hours worked
x 200,000
89
During 2014 we reduced our rate of
occupational diseases by 27% as a result
of the various programmes on education,
prevention and control of risks, as well
and on the treatment of diseases.
OccupATIONAL HEALTH
in order to promote a culture of self-healthcare, we
continue to strengthen our prevention programmes in
the workplace, family and community environments.
During 2014 we reduced our rate of occupational
diseases by 27% as a result of the various programmes
on education, prevention and control of risks, as well
and on the treatment of diseases. These programmes
were provided to our employees and, in some cases,
to their families and community members.
Severity Rate (GR)
SCC, 2012-12014
0.50
0.61
0.19
2
0
1
4
2 0 1 3
2 0 1 2
GR =
no. of days lost
no. of total men - hours worked
x 1,000
ANNUAL REPORT 2014 90
ACTIVITIES:
TTaarrggggeettiinngg
wwoorrkkppllaaccee ppeersrsononnenell
EXPO Safety
INTERNAL SECURITY FORUM
HEALTH FAIR
HEALTH CAREER
AWARDS TO EMPLOYEES
OR DEPARTMENTS WITH
ZERO ACCIDENTS
SECURITY COURSES
AND CONFERENCES
Targeting employyees’
families and community
GUIDED TOURS
"KNOWING MY COMPANY"
FAMILY PARTIES
AND PARADES
HEALTH FAIR
HEALTH CAREER
FAMILIAR CONTESTS
TO PROMOTE VALUES
FIREFIGHTING
COURSES
mining Safety
inveStment in oCCupational SaFety
SCC
Management costs
Training
Personal protection equipment
industrial hygiene studies
Engineering works
TOTAL
$
$
$
$
$
2,973,229.84
2,058,653.05
6,767,986.51
193,113.24
76,456,413.48
$ 88,449,396.12
inveStment in oCCupational health
SCC
Development, Promotion and Protection of Health
Detection and prevention
Treatment
Rehabilitation
TOTAL
$
$
$
$
541,096.95
2,043,849.64
3,903,006.53
36,325.00
$ 6,524,278.12
ACTIVITIES:
TTaarrggggeettiinngg
wwoorrkkppllaaccee ppeersrsononnenell
EXPO Safety
INTERNAL SECURITY FORUM
HEALTH FAIR
HEALTH CAREER
AWARDS TO EMPLOYEES
OR DEPARTMENTS WITH
ZERO ACCIDENTS
SECURITY COURSES
AND CONFERENCES
GUIDED TOURS
"KNOWING MY COMPANY"
FAMILY PARTIES
AND PARADES
HEALTH FAIR
HEALTH CAREER
FAMILIAR CONTESTS
TO PROMOTE VALUES
FIREFIGHTING
COURSES
Targeting employyees’
families and community
FOR FuRTHER INFORmATION ABOuT cOmpANy´S mAIN ASSETS, SEE 10-K FORm FROm pAGE
91
EmpLOyEES FOR THE yEAR ENDED DEcEmBER 31TH
2014
2013
2012
2011
2010
Mexican operations
Employees
Workers
Total
Peruvian operations
Employees
Workers
Total
Ecuador office
Employees
Workers
Total
Argentina office
Employees
Workers
Total
Chile office
Employees
Workers
Total
Corporate office
Total
Total employees in scc
Total Mexico
Total Peru
Total Ecuador
Total Argentina
Total Chile
Total corporate Office
Total
2,153
5,952
8,105
2,308
2,216
4,524
14
38
52
10
16
26
12
14
26
2
8,105
4,524
52
26
26
2
2,152
6,030
8,182
2,272
2,158
4,430
2,033
5,441
7,474
2,101
2,465
4,566
1,979
5,996
7,975
2,031
2,128
4,159
1,919
5,257
7,176
1,999
2,003
4,002
17
18
16
14
18
2
8,182
4,430
17
16
18
2
12
1
7,474
4,566
18
14
12
1
-
--
10
1
-
-
10
1
7,975
4,159
7,176
4,002
-
-
10
1
-
-
11
7
12,735
12,665
12,085
12,145
11,189
ANNUAL REPORT 2014 92
INVESTmENT IN OccupATIONAL SAFETy AND HEALTH
During 2014 we invested uS $ 94.97 million in occupational safety
and health, a 7% increase from the previous year, focusing efforts on
engineering works, purchase of personal protective equipment, training,
coaching, and industrial hygiene studies. in terms of occupational health,
we have invested in the development, promotion and protection of health,
as well as in primary prevention, treatment and rehabilitation.
pRINcIpLES OF cORpORATE GOVERNANcE
Resolution from the Superintendencia de Mercado de Valores –SMV- by its
acronym in Spanish) nº 00012-2014-SMV/01.
The information referred to that resolution 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
At December 31, 2014, no changes have been done. Mr. Raul Jacob
Ruisanchez acts as Director of comptroller and Finance. Mr. Marco A.
Garcia acts as Finance Manager.
2014
US$90
MILLION IN HEALTH AND SAFETY
INVESTMENT
+
IN 2014, WE INvEST
MORE THAN US $ 90 MILLION
IN OCCUPATIONAL SAFETY
AND HEALTH, AN
INCREASE OF 11%
OvER THE PREvIOUS YEAR.
MininG SAFETY
INFORMATION RELATED TO THE STOCk ENTERED IN THE STOCk
93
3%
2014
36,592
OUNCES
GOLD
Au +
GOLD PRODUCTION
INCREASED 3 %, TO 36,592
OUNCES, COMPARED WITH
35,545 OUNCES IN 2013
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 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.
ANNUAL REPORT 2014 94
On June 19, 2008 the Executive committee of the
The indentures relating to the notes contain certain
Board of Directors declared a three-for-one split of the
restrictive covenants, including limitations on liens,
company’s outstanding common stock. On July 10,
limitations on sale and leaseback transactions, rights
2008 common shareholders of record at the close of
of the holders of the notes upon the occurrence
business on June 30, 2008, received two additional
of a change of control triggering event, limitations
shares of common stock for every share owned. The
on subsidiary
indebtedness and
limitations on
split increased the number of shares outstanding to
consolidations, mergers, sales or conveyances. certain
883,410,150 from 294,470,050.
of these covenants cease to be applicable before the
notes mature if the company obtains an investment
All share and per share amounts were retroactively
grade rating. The company obtained investment grade
adjusted to reflect the stock splits.
rating in 2005.
Since 2008 and 2014, the company and AMc had
in addition, the company´s Mexican operations hold
bought shares periodically.
$51.1 million in bonds referred above as “Yankee
bonds”, contain a covenant requiring Minera Mexico
At December 31, 2014,
there were of record
to maintain a ratio of EBiTDA to interest expense of not
812,618,122 shares of common stock of the company,
less than 2.5 to 1.0 as such terms are defined in the
par value $0.01 per share, outstanding.
debt instrument.
cORpORATE BONDS
At December 31, 2014, Minera Mexico was in
Between July 2005 and november 2012 the company
compliance with this covenant.
issued senior unsecured notes six times totaling $4.2
billion as listed above. interest on the notes is paid
Please see note 10 “Financing” for a discussion about
semi-annually in arrears. The notes rank pari passu
the covenants requirements related to our long-term
with each other and rank pari passu in right of payment
debt, on page 106-107, Form 10-K 2014.
with all of the company’s other existing and future
unsecured and unsubordinated indebtedness.
MininG SAFETY
95
At the Cuajone mine, in Peru, we implemented the HPGR project and the
variable cut-off ore grade project, which produced an additional estimated
production of 23,500 tons of copper.
ANNUAL REPORT 2014 96
Members of the Board of Directors at December 31, 2014
GERMAN LARREA MOTA-VELASCO
President and chief Executive Officer since October
DiREcTOR.
21, 2004. He has been a director of the company
German Larrea Mota-Velasco, Director. Mr. Larrea has
since november 1999. Mr. González Rocha has been
been chairman of the Board of Directors since December
the President and chief Executive Officer of Americas
1999, chief Executive Officer from December 1999 to
Mining corporation (“AMc”) since november 1, 2014
October 2004, and a director of the company since
and the chief Executive Officer and a director of Asarco
november 1999. He has been chairman of the board of
LLc (integrated uS copper producer), an affiliate of the
directors, President and chief Executive Officer of Grupo
company, since August 2010. Previously, he was the
México, S.A.B. de c.V. (“Grupo Mexico”) (holding) since
company’s President and General Director and chief
1994. Mr. Larrea has been chairman of the board of
Operating Officer from December 1999 to October
directors and chief Executive Officer of Grupo Ferroviario
20, 2004. Mr. González Rocha has been a director of
Mexicano, S.A. de c.V. (railroad company) since 1997.
Grupo Mexico since 2002. He was General Director of
Mr. Larrea was previously Executive Vice chairman of
Mexicana de cobre, S.A. de c.V. from 1986 to 1999
Grupo Mexico and has been member of the board of
and of Buenavista del cobre, S.A. de c.V. (formerly
directors since 1981. He is also chairman of the board
Mexicana de cananea, S.A. de c.V.) from 1990 to
of directors and chief Executive Officer of Empresarios
1999. He was an alternate director of Grupo Mexico
industriales de México, S.A. de c.V. (“EiM”) (holding) and
from 1998 to April 2002. Mr. Gonzalez Rocha is a civil
Fondo inmobiliario (real estate company), since 1992.
engineer with a degree from the Autonomous national
He founded Grupo impresa, a printing and publishing
university of Mexico (“unAM”) in Mexico city, Mexico.
company in 1978, remaining as the chairman and chief
Executive Officer until 1989 when the company was
EMILIO CARRILLO GAMBOA
sold. He is also a director of Banco nacional de México,
DiREcTOR.
S.A. (citigroup), which forms part of Grupo Financiero
Emilio carrillo Gamboa, Director. Mr. carrillo Gamboa
Banamex, S.A. de c.V. since 1992, consejo Mexicano de
has been a director of the company since May 30,
Hombres de negocios since 1999, and was a director of
2003 and is our fourth independent director nominee.
Grupo Televisa, S.A.B. from 1999 to 2014.
Mr. carrillo Gamboa is a prominent lawyer in Mexico
and has been the Senior Partner of the Bufete carrillo
OSCAR GONZALEZ ROCHA
Gamboa, S.c., a law firm specializing in corporate,
DiREcTOR.
financial, commercial, and public utility issues, for
Oscar Gonzalez Rocha, Director. Mr. Gonzalez Rocha
the last five years. Mr. carrillo Gamboa has extensive
has been our President since December 1999 and our
business experience and currently serves on the
MEMBERS OF THE BOARD
97
boards of many prestigious international and Mexican
ALFREDO CASAR PEREZ
corporations, as well as charitable organizations. Since
DiREcTOR.
March 9, 2005, he has been chairman of the board of
Alfredo casar Pérez, Director. Mr. casar Pérez has been
The Mexico Fund, inc. (nYSE—mxf), a nondiversified
a director of the company since October 26, 2006. He
closed-end management investment company. Mr.
has been a member of the board of directors of Grupo
carrillo Gamboa held various offices with Teléfonos
Mexico since 1997. He is also a member of the board
de México, S.A. de c.V. (“TELMEX”) from 1960 to
of directors of Ferrocarril Mexicano, S.A. de c.V., an
1987, the most recent being that of President and chief
affiliated company of Grupo Mexico, since 1998 and
Executive Officer from June 1975 to June 1987. He
its chief Executive Officer since 1999. From 1992
later served as Mexico’s Ambassador to canada from
to 1999, Mr. casar Pérez served as General Director
July 1987 to February 1989. Mr. carrillo Gamboa
and member of the board of directors of compañía
served from 2002 through March 2010 on the board
Perforadora México, S.A. de c.V. and México compañía
and on the audit committee of Empresas icA, S.A.B.
constructora, S.A. de c.V., two affiliated companies
de c.V. (nYSE—ica), an engineering, procurement and
of Grupo Mexico. Mr. casar Pérez served as Project
construction company. He has been a member of the
Director of iSEFi, a subsidiary of Banco internacional, in
valuation, contract review, nominating and corporate
1991 and Executive Vice President of Grupo costamex
governance, and audit committees of The Mexico Fund,
in 1985. Mr. casar Pérez also worked for the Real
inc. since 2002. Mr. carrillo Gamboa has served on
Estate Firm, Agricultural Ministry, and the college of
the board and audit committee of Grupo Mexico since
Mexico. Mr. casar Pérez holds a degree in Economics
2004 and on the boards of Grupo nacional Provincial
from the Autonomous Technological institute of Mexico,
S.A.B. (Mexican insurance company) since 2007,
iTAM, and one in industrial Engineering from Anáhuac
Grupo Posadas, S.A.B. de c.V. (Mexican hotel operation
university in Mexico city, Mexico. He also holds a
company) since 2006, Grupo
Master’s degree in Economics from the university of
Profuturo, S.A.B. de c.V. (Mexican insurance and
chicago in chicago, illinois.
pension holding company) since 2009, and Kimberly-
clark de Mexico, S.A.B. de c.V. (consumer products)
LuIS CASTELAZO MORALES
since 2002. Mr. carrillo Gamboa has a law degree from
DiREcTOR.
the unAM in Mexico city, Mexico. He also
Luis castelazo Morales, Director. Mr. castelazo
attended a continuous legal education program at
Morales has been a director of the company since
Georgetown university Law center in Washington D.c.,
September 20, 2010. Mr. Luis castelazo Morales
and practiced at the World Bank.
has been the General Director of EiM since 2008.
ANNUAL REPORT 2014 98
Mr. castelazo Morales was previously chief Executive
Banorte, S.A.B. de c.V. (“GFnorte”). From October
Officer of Desarrollo de ingeniería, S.A. de c.V. (DiSA),
2000 to March 2011, Mr. castillo Sánchez Mejorada
a Mexican construction company, for more than ten
was the chairman of the board of directors and chief
years. Mr. castelazo Morales has also participated in
Executive Officer of ixe Grupo Financiero, S.A.B. de
different projects in Mexico through joint ventures with
c.V., a Mexican financial holding company that merged
Raytheon Engineers and constructors and also with the
into GFnorte as of April 2011. in addition, from March
Mccarthy construction Group. Later he, along with two
2007 to March 2009, Mr. castillo Sánchez Mejorada
colleagues, founded AGBc S.c., a firm dedicated to
was the President of the Mexican Banking Association
financial consulting and advising for investments in the
(Asociación de Bancos de México). currently, Mr.
Mexican stock market, where he worked for more than
castillo Sánchez Mejorada serves as an independent
15 years. Mr. castelazo Morales holds the recognition
director on the boards of directors of (i) Grupo Herdez,
of the AMiB (Asociación Mexicana de intermediarios
S.A.B. de c.V., a Mexican holding company for the
Bursátiles) as a certified “Advisor in investment
manufacture, sale and distribution of food products;
Strategies” for the Mexican stock market. Mr. castelazo
(ii) Alfa, S.A.B. de c.V., a Mexico-based holding
Morales holds a degree in civil Engineering from the
company that, through its subsidiaries, is engaged in
universidad iberoamericana in Mexico city, Mexico and
the petrochemical, food processing, automotive and
a Master’s degree in Business Administration from the
telecommunication sectors; (iii) Organización cultiba,
university of Texas at Austin in Austin,Texas.
S.A.B. de c.V. (formerly Grupo Embotelladoras unidas,
S.A.B. de c.V.), a Mexico-based holding company
ENRIquE CASTILLO SANCHEZ MEJORADA
primarily engaged in the beverage industry; and (iv)
DiREcTOR.
Médica Sur, S.A.B. de c.V., a Mexico-based company
Enrique castillo Sánchez Mejorada, Director. Mr. castillo
engaged in the hospital business. From April 2012 until
Sánchez Mejorada has been a director of the company
April 2014, Mr. castillo Sánchez Mejorada served as
since July 26, 2010 and is our fifth independent director
an independent director on the board and as a member
nominee. From May 2013 to date, Mr. castillo Sánchez
of the audit committee of Grupo Aeroportuario del
Mejorada has been Senior Partner of Ventura capital
Pacifico, S.A.B. de c.V., a Mexico-based and nYSE-
Privado, S.A. de c.V. (Mexican financial company) and
listed company that operates, maintains and develops
since October 2013 to date, he has been chairman of
12 airports in the Pacific and central regions of Mexico.
the board of directors of Maxcom Telecomunicaciones,
Mr. castillo Sánchez Mejorada was a member of the
S.A.B. de c.V. (Mexican telecommunications company).
board of directors of Grupo casa Saba, S.A.B. de c.V.,
From April 2011 to May 2013, Mr. castillo Sánchez
a Mexican wholesale distributor of pharmaceutical,
Mejorada was a senior advisor at Grupo Financiero
health, beauty and other consumer products and
MEMBERS OF THE BOARD
operator of a retail pharmacy chain, from April 2010
director of Grupo Mexico since April 2002. He was
99
until 2013. Mr. castillo Sánchez Mejorada has been
also Vice President of Grupo condumex, S.A. de c.V.
a member of the audit committee of Alfa, S.A.B. de
(telecommunications, electronic and automotive parts
c.V. since 2010.Mr. castillo Sánchez Mejorada holds a
producer) for eight years. Mr. García de Quevedo was
Bachelor’s degree in Business Administration from the
the chairman of the Mining chamber of Mexico from
Anáhuac university, in Mexico city, Mexico.
november 2006 to August 2009. He is a chemical
engineer with a degree from the unAM in Mexico
XAVIER GARCIA DE quEVEDO TOPETE
city, Mexico. He also attended a continuous business
DiREcTOR.
administration and finance program at the Technical
Xavier García de Quevedo Topete, Director. Mr. García
institute of Monterrey in Monterrey, Mexico.
de Quevedo has been a director of the company since
november 1999 and our chief Operating Officer since
DANIEL MuñIZ quINTANILLA
April 12, 2005. Since november 1, 2014 Mr. Garcia
DiREcTOR.
de Quevedo Topete has served as the President of the
Daniel Muñiz Quintanilla, Director. Mr. Muñiz has been
infrastructure division of Grupo Mexico, composed of
a director of the company since May 28, 2008. Mr.
the energy, gas, oil and construction subsidiaries of
Muñiz has been the chief Financial Officer of Grupo
Grupo Mexico. He was the President of Minera Mexico,
Mexico since April 2007. Prior to joining Grupo Mexico,
S.A. de c.V. from September 2001 to October 31,
Mr. Muñiz was a practicing corporate-finance lawyer
2014 and the President and chief Executive Officer of
from 1996 to 2006. During this time he worked at
Southern copper Minera Mexico from April 12, 2005
cortés, Muñiz y núñez Sarrapy; Mijares, Angoitia,
until november 1, 2014. He was the President and chief
cortés y Fuentes; and Baker & McKenzie (London and
Executive Officer of AMc from September 7, 2007 to
Mexico city offices). He holds a Master’s degree in
October 31, 2014. From December 2009 to June
Financial Law from Georgetown university Law center
2010, he was chairman and chief Executive Officer of
in Washington D.c., and a Master’s degree in Business
Asarco LLc. He was previously President of Asarco LLc
Administration from instituto de Empresa in Madrid,
from november 1999 to September 2001. Mr. García
Spain.
de Quevedo began his professional career in 1969 with
Grupo Mexico. He was President of Grupo Ferroviario
LuIS MIGuEL PALOMINO BONILLA
Mexicano, S.A. de c.V. and of Ferrocarril Mexicano,
DiREcTOR.
S.A. de c.V. from December 1997 to December 1999,
Luis Miguel Palomino Bonilla, Director. Dr. Palomino has
and General Director of Exploration and Development
been a director of the company since March 19, 2004
of Grupo Mexico from 1994 to 1997. He has been a
and is a special independent director nominee. Dr.
ANNUAL REPORT 2014 100
Palomino has been chairman of the board of directors
since June 2002 and is a special independent director
of Aventura Plaza, S.A. (commercial real estate
nominee. Mr. Perezalonso was chairman of the board
developer and operator) since January 2008, Manager
of directors of Volaris compañía de Aviación, S.A.P.i.
of the Peruvian Economic institute (economic think
de c.V. (airline) from March 2, 2011 to november
tank) since April 2009, Partner of Profit consultoria
2014. He was chief Executive Officer of corporación
e inversiones (a financial consulting firm) since July
Geo, S.A. de c.V. (housing construction) from February
2007, director of the Master in Finance Program at the
2006 to February 2007. Mr. Perezalonso was the
university of the Pacific in Lima, Peru since July 2009,
chief Executive Officer of Aeroméxico (Aerovías de
and a director and chairman of the audit committee of
México, S.A. de c.V.) (airline company) from 2004 until
the Bolsa de Valores de Lima (Lima Stock Exchange)
December 2005. From 1998 until April 2001, he was
since March 2013. He was a member of the board of
Executive Vice President of Administration and Finance
directors of Access SEAF SAFi from December 2007
of Grupo Televisa, S.A.B. (media company). From 1980
to April 2010. Dr. Palomino was previously Principal
until February 1998, Mr. Perezalonso held various
and Senior consultant of Proconsulta international
positions with Grupo cifra, S.A. de c.V. (department
(financial consulting) from September 2003 to June
stores), the most recent position being that of General
2007. Previously he was First Vice President and chief
Director of Administration and Finance. now he is a
Economist, Latin America, for Merrill Lynch, Pierce,
member of the advisory council of Banco nacional de
Fenner & Smith, new York (investment banking)
México, S.A. de c.V. (banking), the board of directors
from 2000 to 2002. He was chief Executive Officer,
and the investment committee of Afore Banamex
Senior country and Equity Analyst of Merrill Lynch,
(banking), the board and the investment committee of
Peru (investment banking) from 1995 to 2000. Dr.
Siefore Banamex no. 1 (banking), and is a member
Palomino has held various positions with banks and
of the boards of directors of Gigante, S.A. de c.V.
financial institutions as an economist, financial advisor
(retail), Masnegocio co. S. de R.L. de c.V. (information
and analyst. He has a PhD in finance from the Wharton
technology), intellego (technology), Telefónica Móviles
School of the university of Pennsylvania in Philadelphia,
México, S.A. de c.V. (wireless communication), cruz
Pennsylvania and graduated from the Economics
Roja Mexicana (emergency and medical services),
Program of the university of the Pacific in Lima, Peru.
construction company Marhnos (housing construction),
and Fomento de investigación y cultura Superior, A.c.
GILBERTO PEREZALONSO CIFuENTES
(Foundation of the iberoamerican university) . Mr.
DiREcTOR.
Perezalonso was a director of cablevision, S.A. de
Gilberto
Perezalonso cifuentes, Director. Mr.
c.V., Grupo Televisa, S.A.B. and a member of the audit
Perezalonso has been a director of the company
committee of Grupo Televisa, S.A.B. from March 1998
MEMBERS OF THE BOARD
to September 2009. Mr. Perezalonso has a law degree
and is a special independent director nominee. Since
101
from the iberoamerican university in Mexico city, Mexico
november 2001, he has been the owner and Managing
and a Master’s degree in Business Administration
Partner of Proyectos Estrategicos integrales, a Mexican
from the Business Administration Graduate School for
investment banking firm specialized in agricultural,
central America (incAE) in nicaragua. Mr. Perezalonso
transport, tourism, and housing projects. Mr. Ruiz
has also attended a corporate Finance program at
Sacristán has held various distinguished positions in
Harvard university in cambridge, Massachusetts.
the Mexican government, the most recent being that
of Secretary of communications and Transportation of
JuAN REBOLLEDO GOuT
Mexico from 1995 to 2000. While holding that position,
DiREcTOR.
he was also chairman of the board of directors of the
Juan Rebolledo Gout, Director. Mr. Rebolledo has been
Mexican-owned companies in the sector, and member
a director of the company since May 30, 2003. Mr.
of the board of directors of development banks.
Rebolledo has been international Vice President of
He was also the chairman of the board of directors
Grupo Mexico since 2001. He was Deputy Secretary
of Asarco LLc. Mr. Ruiz Sacristán was a member of
of Foreign Affairs of Mexico from 1994 to 2000 and
the board of directors from 2007 to 2012 and of the
Deputy chief of Staff to the President of Mexico
audit, and environmental and technology committees
from 1993 to 1994. Previously, he was Assistant to
of Sempra Energy (energy services). in 2012, Mr. Ruiz
the President of Mexico (1989-1993), director of the
Sacristán was appointed chairman and chief Executive
“national institute for the Historical Studies of the
Officer of iEnova, the Mexican operating subsidiary
Mexican Revolution” of the Secretariat of Government
of Sempra Energy. He is a member of the boards of
(1985-1988), Dean of Graduate Studies at the unAM,
directors of constructora y Perforadora Latina, S.A.
Political Science Department
(1984-1985), and
de c.V. (Mexican geothermal exploration and drilling
professor of said university (1981-1983). Mr. Rebolledo
company), of Banco Ve Por Mas, S.A. (Mexican bank),
holds a law degree from unAM in Mexico city, Mexico,
of OHL concesiones Mexico (a construction and civil
an MA in philosophy from Tulane university in new
engineering company), and of AMAiT (an international
Orleans, Louisiana, and an LLM from Harvard Law
airport in Mexico). Mr. Ruiz Sacristán holds a Bachelor’s
School in cambridge, Massachusetts.
degree in Business Administration from the Anáhuac
university in Mexico city, Mexico, and a Master’s
CARLOS RuIZ SACRISTAN
degree in Business Administration from northwestern
DiREcTOR.
university in chicago, illinois.
carlos Ruiz Sacristán, Director. Mr. Ruiz Sacristán has
been a director of the company since February 12, 2004
ANNUAL REPORT 2014 102
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
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
EXEcuTiVE OFFicERS
NEXT OF KIN
To the best of the Company’s knowledge, no relationship of
103
A company of which more than 50% of the voting power
affinity and/or consanguinity exists among the members of
is held by a single entity, a “controlled company”, need not
the Board, and between them and the Executive Officers of
comply with the requirements of the New York Stock Exchange
Southern Copper Corporation.
(“NYSE”) corporate governance rules requiring a majority of
independent directors and independent compensation and
SpEcIAL cOmmITTEES OF THE BOARD
nomination/corporate governance committees.
SCC’s Board of Directors has organized the following Special
Committees:
SCC is a controlled company as defined by the rules of the
1. Executive committee. it is comprised of five members
NYSE. Grupo Mexico owns indirectly 84.6 % of the stock of
who substitute for the Board when sessions or
the Company, as of December 31, 2014. The Company
decisions are required concerning urgent matters, or
has taken advantage of the exceptions to comply with the
matters for which the Board would have expressly
corporate governance rules of the NYSE. The Board of
delegated its mandate.
Directors of the Company determined that Messrs. Luis
Miguel Palomino Bonilla, Gilberto Perezalonso Cifuentes, and
2. Audit committee. it is comprised of three independent
Emilio Carrillo Gamboa, the three members of the Company’s
Board members who are knowledgeable in accounting
Audit Committee, are independent of management and
and financial matters. its main purpose is to: (a) assist
financially literate in accordance with the requirements of the
the Board in monitoring (i) the quality and integrity of the
NYSE and the Securities and Exchange Commission (“SEC”),
company’s financial statements; (ii) the qualifications
as such requirements are interpreted by the Company’s
and independence of the independent auditors; (iii)
Board of Directors in its business judgment. In 2012, we had
the performance of the internal audit function and
three special independent directors nominated by the Special
of the independent auditors; and (iv) the company’s
Nominating Committee, Messrs. Luis Miguel Palomino Bonilla,
compliance with legal and regulatory requirements;
Gilberto Perezalonso Cifuentes, and Carlos Ruiz Sacristan.
and (b) prepare the report required by SEc rules.
Additionally in 2012, Messrs. Emilio Carrillo Gamboa and
Enrique Castillo Sánchez Mejorada were our fourth and
3. compensation committee. it is comprised of four
fifth independent directors. At its meeting on January 29,
Board members and its principal objective is to
2015, the Board of Directors determined that Messrs. Luis
evaluate and establish the remunerations of principal
Miguel Palomino Bonilla, Gilberto Perezalonso Cifuentes,
officers and key employees of the company and its
Carlos Ruiz Sacristán, Emilio Carrillo Gamboa, and Enrique
subsidiaries.
Castillo Sánchez Mejorada are independent of management
in accordance with the requirements of the NYSE as such
4. Special nominating committee. it is comprised
requirements are interpreted by our Board of Directors in its
of two independents Board members and one
business judgment.
nominated by the Board and it has the exclusive
ANNUAL REPORT 2014 104
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 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
at Edificio Parque Reforma, campos Eliseos no. 400, 9th Floor, col. Lomas de
chapultepec, Mexico city, c.P. 11000, Mexico, on Thursday, April 30, 2015 at
9:00 A.M., Mexico city time.
SPEciAL cOMMiTTEES
105
CORPORATE OFFICES:
united StateS
meXiCo
peru
1440 E. Missouri Avenue,
Edificio Parque Reforma,
Av. caminos del inca no. 171
Suite 160,
campos Eliseos no. 400
chacarilla del Estanque
Phoenix, AZ 85014, u.S.A.
col. Lomas de chapultepec, Mexico D.F
Santiago de Surco Lima 33, Peru
Phone: +(602) 264-1375
Phone. +(52-55) 1103-5000,
Phone. +(511) 512-0440, Anexo 3181
Transfer Agent, Registrar and Stockholder
Others
Services
computershare
480 Washington Boulevard
Jersey city, nJ 07310-1900
Phone: +1(866)230-0172
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
Dividend Reinvestment Program
are provided by Banco de credito of Peru at Avenue
Scc
stockholders can have
their dividends
centenario 156, La Molina, Lima 12, Peru.
automatically reinvested in Scc common shares.
Scc pays all administrative and brokerage fees.
Phone +(511) 313-2478, Fax +(511) 313-2556.
This plan is administered by The Bank of new York
Mellon corporation. For more information, contact
1 PROXY STATEMENT, extension 3325
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.
ANNUAL REPORT 2014 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
En Mexico: Campos Eliseos No. 400, 11 floor, Col. Lomas de Chapultepec
Mexico D.F.
Phone +(52-55) 1103-5000, Extension 5855.
En 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
Formulario 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
106
cORPORATE inFORMATiOn
Members of the Board of Directors
107
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, and
Gilberto Perezalonso Cifuentes
Enrique Castillo Sanchez Mejorada
ANNUAL REPORT 2014 108
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 2014. 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.
SOUTHERN COPPER CORPORATION
CORPORATE OFFICES
UNITED STATES
11811 North Tatum Blvd.
Suite 2500, Phoenix, AZ 85028, U.S.A.
Phone: +(602) 494 5328
Fax: +(602) 494 5317
MEXICO
Campos Eliseos No. 400, 9 floor
Col. Lomas de Chapultepec, Mexico D.F.
Phone: + (52-55) 1103-5320, Extension 5855
Fax: + (52-55) 1103-5583
PERU
Avenue Caminos del Inca 171 (B-2)
Chacarilla del Estanque, Santiago de Surco
Lima 33 - Peru
Phone: +(511) 512-0440, Extension 3354
Symbol: SCCO
E-mail
southerncopper@southernperu.com.pe
www.southerncoppercorp.com
2014
IN DETAIL
ANNUAL REPORT
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