Southern Copper CorporationSeptember 2010September 2010
0
I. Introduction
1
Management Presenters
Presenters TitleRaul Jacob Manager of Financial Planning & IR
2
Corporate Structure
100.0% (*)
Public Float
AMERICASMINING
CORPORATION
20.0% (*)
99.29 % 99.95 %
SCC Peru Branch Minera México
3(*) As of December 31, 2009
Copper – The Best Fundamental Story in Commodities
► Continued strong demand from China which grew from 26% in ’08 to 36% in ’09. Asia is now 57% of
Improving Fundamentals Copper Consumption by Region
Japan5%
All Other8%
world demand
► China’s monetary tightening should not derail country's sustained growth and copper demand
► Evidence of gradual OECD demand recovery
Europe21%
USA
Asia Ex China21%
► Evidence of gradual OECD demand recovery
► Limited production upside and falling grades result in a tight market going forward
CRU Feb 2010
USA9%
China36%
LME Copper Cash Price vs. Inventories Copper Consumption by End-use
Transport Equipment
12%Industrial Machinery
9%
Consumer Products
9%
1,400,000
1,600,000
4.00
4.50
Building400,000
600,000
800,000
1,000,000
1,200,000
1.00
1.50
2.00
2.50
3.00
3.50
4AME, Brook Hunt & Calyon Estimates
Electrical42%
Building28%
-
200,000
0.00
0.50
2-Ja
n-08
22-A
pr-0
8
11-A
u g-0
8
26-N
ov-0
8
19-M
ar-0
9
6-Ju
l-09
19-O
ct-0
9
3-Fe
b-10
20-M
a y-1
0
3-S
e p-1
0
Registered inventories in tons 3 month price US per ton
Southern Copper Strengths
Highest copper reserves in the mining industry
Excellent organic growth projects
Low cost fully integrated operationsLow cost fully integrated operations
Experienced management team
Strong financial performance / investment grade
Outstanding dividend historyOutstanding dividend history
Good long-term copper & molybdenum fundamentals
5
II. Overview of Operations
6
Company Overview
MexicoCopper Reserves 1: 55.4 mmtProduction capacity: 680 ktpy
Santa EulaliaLa Caridad
Cananea
E2010 Copper Production: 500 ktSales: $ 4,600 MEBITDA: $ 2 600 M
Santa Barbara
CharcasSan Luis Potosi
San Martin
Peru
EBITDA: $ 2,600 M57% of Sales
1H10 Cash Cost: $ 0.064/lb.
Taxco
Copper open pit mines
Underground mines
Smelters and Refineries
Key
#1 copper company by reserves 2
#6 copper producer 3
Il
Smelters and Refineries#6 copper producer #12 copper smelter 3
Source: Company FilingsN t
Cuajone
T l
7
IloNotes: 1 Copper contained in reserves based on US$1.80 per pound of copper as of December 31, 20092 Based on available companies reports3 CRU information for 2009 + Cananea at full capacity
Toquepala
World’s Largest Copper Reserves Support Substantial Organic Growth Potential
Copper Reserves as Reported SCC Highlights
#1 position in reported copper reserves
#1 mine life among copper producers
#6 world’s largest producer of mined copper
55.452.7
36.340
50
60
s (M
t)
Highly diversified geographical presence
Four large-scale open-pit mines
Mine Life
27.123.1
16.7 15.710.8 9 0
20
30
Cop
per R
eser
ves
10.8 9.0
0
10
SC
C
odel
co
reep
ort
BH
P
Ang
lo
mer
ican
Xst
rata
o Ti
nto
VA
LE
faga
sta
81
60
80
100
Source 10K Annual Rep. 10K 20F Annual Rep. Reserve Rep. 20F 20F Annual Rep.
Period 12/31/09 12/31/09 12/31/09 06/30/09 12/31/09 06/30/09 12/31/09 12/31/09 12/31/09
Cu Price $1.80 $1.98 $1.60 $3.14 (*) (*) (*) $2.91 $1.70
Co
Fr AA
m X
Rio
Ant
of
34 3425 21 21 18
0
20
40
SCC A l C d l F t BHP Ri Ti t X t t
8
SCC Anglo American
Codelco Freeport BHP Billiton
Rio Tinto Xstrata
Geographic Footprint & Product Diversification
1H-2010 Revenue by Product 1H-2010 Revenue by Market
Europe19%
Asia
Silver5%
Zinc5%
Other2%
Acid2%
United States24%Peru
3%
s a12%
Molybdenum15%
Other Latin American
22%
Mexico20%Copper
71%
15%
22%
9
Low Cost Operations
Cash Costs per Pound of Copper Produced Net of By-Products
Low Cost Drivers
Fully integrated low cost operations0.7 y g p
World class assets
Significant SX-EW production
Strong by-product credits
0.22
0.36
0.060.1
0.3
0.5
(US
$/lb
)
Cost Structure (1)Operating Cash Cost per Pound of
Strong by-product credits
Management focus on cost efficiency-0.25-0.3
-0.12007 2008 2009 6 mos. 2010
Operating Cash Cost per Pound of Copper Produced
Operating Materials
16%
Other12%
1.57 1 53
2.00
Fuel13%Maintenance
19%
1.29
1.571.36
1.53
0.50
1.00
1.50
(US$
/lb)
1010(1) As of 2Q 2010
Power24%
Labor16%
0.00
0.50
2007 2008 2009 6 mos. 2010
Operational Update - Cananea Minesite
Key Metal: Copper
C t t P d ti 125 kt d
Operating Capacity Largest copper mine worldwide in terms of
reserves
Cananea Minesite
Concentrator Production: 125 ktpd
SX-EW Plant Capacity: 55 ktpy
reserves
Board of Directors approved investment of
$2.1 billion to expand Cananea’s production
from 180ktpy to 450ktpy of copperReserve Information
R (1) 25 1 MTpy py pp
Estimated repair cost : US$ 120 M
Expansion
Reserves (1): 25.1 MT
Average Copper Grade:
Sulfide: 0.511%
Leachable Materials: 0.201%p Concentrator facilities expansion to produce
188ktpy of additional copper
New SX-EW plants to produce 82ktpy of Production (kt)
Stripping Ratio: 2.44x
copper
Molybdenum circuit, 2 ktpy164
99 150 180
11Source: SCCNote:(1) Reserves based on US$1.80 per pound of copper.
16 0 20
2006 2007 2008 2009 E 2010 E 2011 E 2012
III. Financial Overview
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SCC Financial Summary
(US$ MM) 2008 2009 LTM 2010 1H2010
Copper Price (LME) US$ per pound 3.16 2.33 3.04 3.23Income Statement:Net Revenues $4 851 $3 734 $4 680 $2 393Net Revenues $4,851 $3,734 $4,680 $2,393EBITDA 2,546 1,814 2,512 1,304EBITDA Margin 52% 49% 54% 55%Net Income 1,407 929 1,372 697Dividends paid per share 1.94 0.44 1.16 0.88Balance Sheet Statement:Cash & Equivalents $717 $772 $2,145 $2,145Total Assets 5,764 6,063 7,449 7,449Total Debt 1 1,290 1,280 2,765 2,765Total Liabilities 2,369 2,169 3,605 3,605Total Shareholders' Equity 3,381 3,875 3,825 3,825Cash Flow Statement:Capital Expenditures $517 $415 $377 $168Free Cash Flow 2 1 204 548 1 093 667Free Cash Flow 1,204 548 1,093 667Dividends paid to common shareholders 1,711 376 986 748
Net Debt / EBITDA 0.2x 0.3x 0.2x 0.5x
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1 Includes short-term and long-term debt2 Free Cash Flow defined as net cash from operating activities less capital expenditures
Solid Financial Performance
Top Tier Margins and Conservative Leverage for Increased Financial Flexibility
2010E Total Debt / EBITDA (x)2010 EBITDA Margin (%) No Amortizations Until 2015
58%
63%
Vale
Antofagasta
1
2
$5
$10
2010
20110.66
0.60
Antofagasta
Freeport
2
1
49%
54%
Freeport
SCCO
1
1 $10
$10
2012
20131.26
1.06
BHP
SCCO
g
1
3
36%
44%
Anglo
BHP
1
3
3$56
$200
$400
2015
2020
20282.11
2.03
Rio Tinto
Xstrata3
3
26%
30%
Rio Tinto
Xstrata
3$1,000
$1,100
2035
20404.22
3.19
Vale
Anglo
1
3
14
Source: Company Reports1 1H10 Results 2 1Q10 Results3 2009 Results
Source: Company Reports1 1H10 Results 2 1Q10 Results3 2009 Results
Investment Program to Increase ProductionCopper = +50%, Molybdenum = +35%
Attractive Organic Growth Prospects - Increase Copper Capacity 50% & Molybdenum Production 35% by 2013
Tia MaríaSX/EW
Toquepala C t t
2011 2012 20172016
Tía María SX/EW2H12 $934M
Cuajone - CuC
2012 2015 2016 2017 and on2013Cananea – Cu El Arco
Il R fi EEmpalmeSX/EW Concentrator
Expansion2H12 - $934M 120K Tons
Concentrator Expansion 1Q13 - $300M 72K Tons Toquepala
Concentrator Exp. 2H12 - $600M 100K Tons Cu –
Pilares Mine - Cu1Q13 - $195M
SX/EX IV Plant2Q15 - $300M 50K Tons
Cananea – CuConcentrator
Ilo Refinery Exp.Ilo Smelter Exp.
Los Chancas
Angangueo
B i tEmpalme
pCu Smelter2Q16 - $800M350K Tons Cap.
2010 2013 C P g O i Additi l C P d ti
100K Tons Cu –3.1K Tons MoCananea SX/EW III4Q12 -$180M 32K Tons
CananeaMolybdenum Plant 1Q13 - $30M 2K Tons Mo
40K Tons Concentrator3Q15 - $1,200M 188K Tons
BuenavistaMine
Zinc RefineryMine
Cu Refinery2Q16 - $500M330K Tons Cap.
2010-2013 Capex Program Overview$ MM ‘000 MT
Additional Copper Production
1,2001 0001200
1500
800
1000
1200
8021,000
811
0
300
600
900
1200
0
200
400
600
2010 2011 2012 2013 2014
15Source: SCC.
02010 2011 2012 2013
2010 2011 2012 2013 2014
Existing Copper Production Estimate. 2011 onwards includes production from Cananea
Production from New Projects
SCC’s Mayor Strengths
SCC is the Premier Copper Play• World class assets in investment grade countries
• #1 in reserves with various exploration prospects
- Increasing copper production
• Capacity to deliver projects through flexible capital structure and significant cash generation capability
• Fully integrated low cost operations
- Strategic investments focused on cost competitiviness
• Outstanding dividend history
• Experienced management with proven track record
(i US$ illi )SCC EBITDA and % Margin
(in US$ millions)
$2,348
$3,329$3,825
$2,529
$1,814$2,512
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57.4% 61.0% 62.9% 52.1% 48.6%54.0%
2005 2006 2007 2008 2009 LTM 2010
Safe Harbor Statement
This presentation contains certain statements that are neither reported financial results nor other
historical information These estimates are for ard looking statements ithin the meaning of thehistorical information. These estimates are forward-looking statements within the meaning of the
safe-harbor provisions of the Mexican securities laws. These forward-looking estimates are
subject to risk and uncertainties that could cause actual results to differ materially from the
expressed in the forward looking statements Many of these risks and uncertainties relate toexpressed in the forward-looking statements. Many of these risks and uncertainties relate to
factors that are beyond Grupo Mexico’s ability to control or estimate precisely, such as future
market conditions, commodity prices, the behavior of other market participants and the actions of
governmental regulators Readers are cautioned not to place undue reliance on these forwardgovernmental regulators. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date of this presentation. Grupo Mexico does not
undertake any obligation to publicly release any revision to these forward-looking estimates to
reflect events or circumstances after the date of this presentationreflect events or circumstances after the date of this presentation.
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Proposed Combination of SCC and ASARCO under Ownership of AMC
Pre Transaction Post TransactionSimplified Overview Simplified Overview
Grupo M é xico
83.4%
Public Stockholders
16.6%
Americas Mining
Grupo M é xicoPublic Stockholders
Americas Mining
Grupo M é xico
100%
Public StockholdersAmericas Mining
Corp.
Grupo M é xico
Public StockholdersAmericas Mining
Corp.
Simplified Overview Simplified Overview
Southern Copper ASARCO
100% 100%
Americas Mining Corp.
Southern Copper ASARCO
Americas Mining Corp.
Southern Copper ASARCO
80% 100%
Southern Copper ASARCO
20%
Key Transaction Terms
► 1.237 AMC shares per SCC share
► ~16.6% aggregate ownership of newly-listed AMC by SCC’s public stockholders, as compared to ~20% aggregate ownership of SCC
► Assumes an implied ASARCO equity value of ~$5.94Bn
► Results in publicly listed (NYSE, Lima and Mexico Stock Exchange) AMC with wholly-owned subsidiaries SCC and ASARCO
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