Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Chile, and Ecuador. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and three SX-EW plants in Mexico. In addition, it operates five underground mines that produce zinc, lead, copper, silver, and gold; a coal mine that produces coal and coke; and a zinc refinery. It has interests in 81,979 hectares of exploration concessions in Peru; 154,937 hectares of exploration concessions in Mexico; 36,097 hectares of exploration concessions in Argentina; 58,138 hectares of exploration concessions in Chile; and 2,543 hectares of exploration concessions in Ecuador. Southern Copper Corporation was formerly known as Southern Peru Copper Corp. The company was founded in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation operates as a subsidiary of Americas Mining Corporation.
Business Analysis of Southern Copper
The Basic Materials Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Southern Copper compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Southern Copper to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Southern Copper with an interactive chart.
- Revenue Growth: Southern Copper reported a revenue growth of 6.6% year-on-year during 2016. Metal Mining Industry grew at -5.5% in the same period
- COGS share of Revenues: As a percentage of revenue, Southern Copper spent 56.4% of its total revenues on COGS. Metal Mining industry average (COGS share of revenue) in the same period was 86.3%
- R&D share of Revenues: As a percentage of revenue, Southern Copper spent 0.7% of its total revenues on R&D. Metal Mining industry average R&D spending in the same period was 0.5%
- SG&A share of Revenues: As a percentage of revenue, Southern Copper spent 1.8% of its total revenues on Sales, Marketing, and General Administration (SG&A). Metal Mining industry average SG&A spending in the same period was 6.3%
- Inventory share of Revenues: As a percentage of revenue, Southern Copper spent 33.8% of its total revenues on Inventories. Metal Mining industry average Inventory spending in the same period was 20.9%
- Accounts Payable share of Revenues: As a percentage of revenue, Southern Copper invested 10.9% of its total revenues on Accounts Payable (A/P) Metal Mining industry average Accounts Payable investment in the same period was 9.8%
- Accounts Receivable share of Revenues: As a percentage of revenue, Southern Copper invested 12.4% of its total revenues on Accounts Receivable (A/R). Metal Mining industry average Accounts Receivable investment in the same period was 10.1%
- PP&E share of Revenues: As a percentage of revenue, Southern Copper invested 163.0% of its total revenues on Property, Plants, and Equipments (PP&E). Metal Mining industry average PPE investment in the same period was 67.7%
- Intangibles share of Revenues: As a percentage of revenue, Southern Copper invested 2.9% of its total revenues on Intangibles. Metal Mining industry average Intangibles investment in the same period was 10.6%
- Net Margins: Southern Copper Net Margins in the year 2016 were 14.4%. Metal Mining industry average Net Margins in the same period were -3.7%
Sector and Industry Association of Southern Copper
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Southern Copper is associated with Basic Materials Sector and Metal Mining Industry.
Basic Materials sector is comprised of the following industries: Metal Mining; Coal Mining; Chemicals. The definitions for each of the industries is as follows:
- Metal Mining industry includes companies primarily engaged in mining, developing mines, or exploring for precious metals such as Gold, Silver, Platinum and base metals such as Iron, Copper, Aluminum, Lead, and Zinc. It also includes companies that manufacture alloys such as steel.
- Coal Mining industry includes companies engaged in the exploration for and/or mining of coal.
- Chemicals industry includes companies that produce and/or distribute commodity and specialty chemicals. The companies manufacture three general classes of products: (1) basic chemicals, such as acids, alkalies, salts, and organic chemicals; (2) chemical products to be used in further manufacture, such as synthetic fibers, plastics materials, dry colors, and pigments; and (3) finished chemical products to be used as materials or supplies in other industries, such as paints, fertilizers, and explosives.
Industry Ranking of Southern Copper
With $5.4 billion revenues, Southern Copper ranked number 11 of all the companies in the US Metal Mining industry. There were a total of 34 public companies in the US Metal Mining industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Metal Mining industry by revenues during 2016 were:
- Nucor ($16.2 billion)
- Freeport-McMoRan ($14.8 billion)
- Arconic ($12.4 billion)
- United States Steel ($10.3 billion)
- Alcoa ($9.3 billion)
- Reliance Steel & Aluminum ($8.6 billion)
- Steel Dynamics ($7.8 billion)
- A-Mark Precious Metals ($6.8 billion)
- Newmont Mining ($6.7 billion)
- AK Steel Holding ($5.9 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Southern Copperand its peers on select key performance indicators by clicking the reports provided below