Southern Copper is evaluating a 680 million dollar expansion of its Cuajone mine in southern Peru to counter declining ore grades and improve efficiency. The proposal would increase milling capacity by 33 percent, from 90,000 to 120,000 tonnes per day, with projected average annual production of 55,000 tonnes of copper and 1,400 tonnes of molybdenum. The company is also studying a further increase to 150,000 tonnes per day.
The pressure is visible in the group’s numbers. Southern Copper’s copper production fell 2.9 percent to 693,602 tonnes in the first nine months of 2026, largely because of lower ore grades at its Peruvian mines, according to its third quarter results released on October 20. Cuajone produced nearly 163,000 tonnes of fine copper in 2025 and, with the nearby Toquepala operation, remains central to the Peruvian business.
The company has forecast copper production of 911,400 tonnes in 2026 and about 900,000 tonnes in 2027, compared with 954,270 tonnes in 2025. Its longer term ambition is to lift annual output to 1.6 million tonnes by 2033, supported by investments across Peru and Mexico, including the 1.8 billion dollar Tia Maria project, which was 49.6 percent complete at September 30 and is expected to start operating in the first half of 2028.
Context matters more than the headline here. BloombergNEF estimates the industry needs 332 billion dollars in new mine investment to avert a supply shortage likely to begin in 2028, with the deficit widening to 3 million tonnes by 2035. Southern Copper has outlined preliminary targets for Cuajone but has announced no final investment decision or timetable, leaving the project’s contribution to future output uncertain.