Southern Copper Unlocks Environmental Permits for El Pilar

Grupo México subsidiary Southern Copper secured the required environmental permits for the El Pilar project in Sonora. The company plans to begin preliminary site preparation work in September 2026. The group maintains that the advancement of its Mexican project pipeline remains contingent on federal decisions regarding electrical grid interconnections. 

The preliminary preparation for the El Pilar project includes the construction of power lines, water pipelines, access roads, and worker accommodation. Project construction is scheduled to start in 1Q27, with initial production anticipated during 2H29.

Located in Sonora, approximately 45km from the Cananea and Buenavista mines, El Pilar holds an estimated 317Mt in proven and probable copper oxide reserves with an average ore grade of 0.249% and an 18-year mine life. The open-pit operation will utilize solvent extraction and electrowinning (SX-EW) technology to achieve an annual production capacity of 36,000t of copper cathodes.

With an investment capital of US$551 million, the El Pilar project will generate 450 direct jobs during construction and 300 during the operational phase. According to the company’s 4Q24 report, El Pilar had an estimated CAPEX of US$310 million, representing a 77.7% increase.

Southern Copper Project Pipeline in Mexico

El Pilar is part of SCC's portfolio in Mexico, where the company maintains ongoing discussions with the current administration to execute US$10.2 billion in investments. Additional assets under evaluation include Angangueo, Chalchihuites, and the Empalme Smelter.

In Baja California, the El Arco deposit features copper reserves of more than 1,230Mt of sulfides with an average ore grade of 0.40%, alongside 141 Mt of leachable material with an average grade of 0.27%. The planned open-pit complex includes a 120,000 t/d concentrator operation and a 28,000 t/a SX-EW facility.

Under Mexican constitutional law, electrical transmission falls exclusively under state responsibility through CFE. Advancement of El Arco remains contingent on government action to interconnect the Baja California peninsula project with the national electrical grid.

El Pilar Among Mexico’s Most Important Copper Projects

CAMIMEX identified El Pilar as one of the country's most strategic copper developments for critical mineral supply and energy transition goals. According to the chamber’s 2025 list, these projects are Americas Gold and Silver Corporation advancing EC120 in Sinaloa, Torex Gold Resources’ expansion of the Media Luna project in Guerrero targeting, and GoGold Silver and Gold’s Los Ricos Sur and Los Ricos Norte in Jalisco. Additionally, an Agnico Eagle Mines and Teck Resources joint venture is executing feasibility studies for the San Nicolas project in Zacatecas, while Oroco Resource advances Santo Tomas in Sinaloa. Barksdale Resources Corp. is developing San Javier in Sonora, and Minera Alamos Inc. evaluates La Fortuna in Durango.

2Q26 Financial and Operating Performance

In its 2Q26 financial report, Southern Copper posted record quarterly net sales of US$4.289 billion, marking a 40.6% increase compared to 2Q25. Net income reached a historic record of US$1.670 billion, up 71.6% year-over-year from US$973.4 million. This financial performance was driven by favorable price variations across primary metals, led by an increase of 39.8% for LME copper, 30.5% for COMEX copper, 43.1% for molybdenum, 30.8% for zinc, and 118.6% for silver. Adjusted EBITDA reached US$2.85 billion, reflecting a 59.5% surge from 2Q25 and delivering an adjusted EBITDA margin of 66.6%. Net operating cash flow for the first six months of 2026 rose 116.9% to US$3.68 billion.

Total mined copper production for 2Q26 stood at 230,662t, down 3.5% quarter-over-quarter. Mexican operations recorded a 3.2% increase in copper output, partially offsetting a 12% decline in Peruvian operations caused by lower ore grades. Mined silver output dropped 3.8% to 5.76Moz, mined zinc declined 14.5% to 39,257t, and mined molybdenum fell 11.0% to 7,046t. Operating cash cost per lb of copper, net of byproduct credits, stood at US$0.05/lb for 2Q26, a 93% reduction compared to US$0.63/lb in 2Q25, driven by a 51.4% increase in byproduct credits. Capital expenditures for the quarter totaled US$422.8 million, representing a 79.4% increase over 2Q25.