36% Zinc Surge Cuts Copper Cash Costs to $0.58 While Volumes Dip 4.7%
NEM•Zinc output surged 36% in 2025 via the new Buenavista concentrator, raising byproduct credits by $0.34 per pound and cutting net cash cost of copper to $0.58 per pound. Management projects copper volumes will fall 4.7% next year due to lower Peruvian ore grades but says zinc credits will offset cost increases.
1. Zinc Production Surge
Southern Copper’s mined zinc output climbed 36% year-over-year in 2025 following the commissioning of the Buenavista zinc concentrator, marking the largest annual increase from this site.
2. Cost Reduction via Byproduct Credits
Higher zinc volumes generated an additional $0.34 per pound in byproduct revenue credits, driving the company’s net cash cost for copper down to $0.58 per pound in 2025, a material improvement over the prior year.
3. Copper Production Decline Forecast
Management forecasts a 4.7% decline in copper production next year, a result of lower ore grades at its Peruvian operations, which could pressure unit costs without offsetting factors.
4. Strategic Response and Profit Shield
By prioritizing zinc-rich ore at Buenavista, the company is deliberately optimizing its asset mix to bolster byproduct credits, aiming to insulate overall margins from the temporary dip in copper grades.
