Company: SCCO
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0001558370-25-005975
Chunk: 14

Company: SOUTHERN COPPER CORP/
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 3
Chunk 14
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Item 3. Quantitative and Qualitative Disclosure about Market Risk

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Commodity price risk:

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For additional information on metal price sensitivity, refer to “Metal Prices” in Part I, Item 2 of this quarterly report on Form 10-Q for the period ended March 31, 2025.

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Foreign currency exchange rate risk:

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Our functional currency is the U.S. dollar. Portions of our operating costs are denominated in Peruvian soles and Mexican pesos. Given that our revenues are primarily denominated in U.S. dollars, when inflation or deflation in our Mexican or Peruvian operations is not offset by a change in the exchange rate of the sol or the peso to the dollar, our financial position, results of operations and cash flows could be affected by local cost conversion when expressed in U.S. dollars. In addition, the dollar value of our net monetary assets denominated in soles or pesos can be affected by an exchange rate variance of the sol or the peso, resulting in a re-measurement gain or loss in our financial statements. Recent inflation and exchange rate variances are provided in the table below for the three-month periods ended March 31, 2025 and 2024:

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​​​​​​​    Three Months Ended     ​​March 31, ​​    2025    2024    Peru:       Peruvian inflation rate  0.9%   1.6%Initial exchange rate  3.770  3.713 Closing exchange rate  3.677  3.721 Appreciation/(devaluation)  2.5%   (0.2)%Mexico:       Mexican inflation rate  0.9%   1.4%Initial exchange rate  20.268  16.894 Closing exchange rate  20.318  16.678 Appreciation/(devaluation)  (0.2)%   1.3%

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Change in monetary position:

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Assuming an exchange rate variance of 10% at March 31, 2025, we estimate our net monetary position in Peruvian sol and Mexican peso would increase (decrease) our net earnings as follows:

​​​​​    Effect in net​ earnings​ ($ in millions)Appreciation of 10% in U.S. dollar vs. Peruvian sol​$ 15.