Southern Copper’s Strategic Pivot Amid Record Profits and Dividend Boost

Southern Copper US84265V1052

Shareholders of Southern Copper are set to receive enhanced returns following a year of record-breaking financial performance. The company concluded its 2025 fiscal year with unprecedented revenue and profit, providing a solid foundation even as it navigates a transitional period marked by operational headwinds.

The mining giant reported annual revenue of $13.42 billion, coupled with a net profit of $4.33 billion. This robust financial position has enabled management to increase direct returns to investors. The quarterly cash dividend is being raised to $1.00 per share, up from the previous $0.90.

In addition to the increased cash payment, a stock dividend has also been declared. Investors seeking to qualify for both distributions must take note of the ex-dividend date, which is set for February 10, 2026.

Navigating a Temporary Production Dip

Despite its financial strength, Southern Copper anticipates a modest decline in copper output for 2026. Production is forecast to dip by 4.7% to approximately 911,400 tonnes. This expected decrease is attributed to lower ore grades at its Peruvian mining operations, which will temporarily impact extraction efficiency.

The company's strategic response to this challenge centers on significant capacity expansion. Its major development project, Tía María in Peru, is currently 24% complete. Having already invested $800 million, Southern Copper plans to commit an additional $508 million to the site in 2026. Initial production is scheduled to commence in 2027, with the project expected to contribute meaningfully to overall volumes from 2028 onward.

A Supportive Macroeconomic Backdrop

The global copper market environment strongly supports the company's long-term strategy. A tightening supply landscape worldwide is meeting robust demand, fueled largely by the expansion of AI infrastructure and the global shift toward electric mobility. Management forecasts a global copper deficit of 320,000 tonnes for 2026.

With global inventories estimated to cover only about 14 days of demand, prices for the industrial metal remain elevated. Copper recently traded at $5.88 per pound. This positive market sentiment is reflected in the company's share price, which has advanced more than 24% over the past 30 trading days. Closing at €163.45 on Monday, the stock trades only modestly below its 52-week high of €173.75.

Market participants will gain further insight into the company's progress when Southern Copper releases its next detailed quarterly report on February 11, 2026. A key focus will be whether advancements in its capital projects continue to successfully offset the perceived impact of the near-term production forecast in the eyes of investors.