Southern Copper in talks with Mexico’s Sheinbaum government to unlock $10.2B mining investment

Southern Copper is negotiating with Mexico’s new administration to unlock $10.2B in mining investments. Key projects like El Arco, Empalme, and Tía María in Peru lead the company’s expansion plans.

Southern Copper Corporation (NYSE, LON: SCCO), one of the world’s largest copper producers, confirmed it is in talks with Mexico’s new administration under President Claudia Sheinbaum to unlock mining investments totaling $10.2 billion. These plans had been delayed due to stalled permits and licenses under the previous government.

In its second-quarter earnings report, the company said discussions with federal authorities aim to secure environmental and operational approvals needed to move forward with several key projects in the country.

Through its subsidiary Minera México, Southern Copper plans to invest more than $600 million by the end of 2025 in both open-pit and underground operations. About half of the investment will go toward modernizing infrastructure to ensure long-term viability, while the rest will focus on water efficiency, tailings management, and operational improvements to boost productivity and sustainability.

Pipeline Projects in Mexico

Among the company’s strategic projects are Angangueo, Chalchihuites, and the Empalme smelter — initiatives that Southern Copper says will strengthen its position as a fully integrated copper producer. The company also highlighted the El Arco copper deposit in Baja California and the El Pilar greenfield project in Sonora, a region also rich in gold, silver, and lithium.

According to Mexico’s mining chamber Camimex, as of late 2024, there were 116 pending environmental permits with Semarnat and 107 with water authority Conagua. These bureaucratic delays are holding up an estimated $6.9 billion in mining investment and the creation of 50,000 new jobs.

Tía María Project Advances in Peru

Beyond Mexico, Southern Copper is also advancing the long-delayed Tía María copper project in Peru’s Arequipa region. The company has increased its investment in the project from $1.4 billion to $1.8 billion and is targeting 2027 to begin production.

At current copper prices, Tía María is expected to generate $18.2 billion in exports and contribute $3.8 billion in taxes and royalties over its first 20 years. Southern Copper reports that it has already created 1,376 jobs, including 802 positions filled by local workers. During construction, the company expects to hire around 3,500 people, mostly from the Islay province. Once operational, the mine will generate 764 direct jobs and 5,900 indirect ones.

Construction has reached 90% completion on access roads and platforms, while mass earthworks are underway, a temporary camp is being built, and 59 kilometers of fencing have been installed around the site.

Tía María faced strong local opposition over environmental concerns, with protests between 2011 and 2015 leaving six people dead. Although the Peruvian government approved the project in 2019, it remained stalled until development resumed in 2024 amid improved local conditions.

Positive Outlook Despite Global Headwinds

Southern Copper estimates that its projects in Peru — either under construction or in engineering stages — could represent more than $10.3 billion in investment over the next decade. Despite global economic uncertainty and ongoing U.S.-China trade tensions, the company remains confident in the long-term fundamentals of copper.

“We maintain a positive long-term outlook for copper,” said CFO Raúl Jacob during a recent earnings call.