Tia Maria Copper Project Feasibility Study: $676M NPV, 16.6% IRR
Southern Copper Corporation's Tia Maria Copper Project in Peru has a Feasibility Study outlining an after-tax NPV of $676M, an after-tax IRR of 16.6%, and initial capital of $1.75B. The mine plan runs 20 years at about 36 Mt/a per year.
Southern Copper Corporation's Tia Maria Copper Project has reported Feasibility Study results for the copper project in Peru. The study headlines an after-tax net present value of $676M at a 10% discount rate. It reflects Southern Copper Corporation's (SCCO) latest disclosed economics for the asset.
Economics. The after-tax NPV is $676M using a 10% discount rate. After-tax IRR is 16.6%. Initial capital expenditure is estimated at $1.75B, with life-of-mine sustaining capital of $320M. The study models a payback period of 4.3 years. Economics are based on US$3.80/lb Cu (resource pit shell), copper cathode premium US$0.03/lb Cu, transportation/freight US$0.04/lb Cu.
Production and mine plan. The project envisions an open-pit operation. Life of mine is 20 years. Average annual production is approximately 36 Mt/a. Metallurgical recovery averages 69%.
Resources and ownership. Royalties and streams: 1% royalty payable; modified mining royalty included in cashflow analysis.
These figures are extracted from Southern Copper Corporation's technical disclosures and reflect the most recent Feasibility Study on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Indicated | 35.5 Mt | 0.17% Cu | 135.2 M lbs |
| Inferred | 21.8 Mt | 0.22% Cu | 107.8 M lbs |
Our Analysis
- IRR after-tax
- 16.6%
higher than 27% of 26 projects we track
- NPV after-tax
- $676M
higher than 48% of 31 projects we track
- Initial capex
- $1.75B
259% of NPV
costlier than 74% of 35 projects we track
- Payback
- 4.3yrs
slower than 77% of 26 projects we track
- Mine life
- 20yrs
- Discount rate
- 10%
- Study price assumption
- US$3.80/lb Cu (resource pit shell), copper cathode premium US$0.03/lb Cu, transportation/freight US$0.04/lb Cu
- Spot copper today
- $6.52/lb
A 16.6% after-tax IRR places this project in the lower half of the 26 copper projects we track, ranking higher than just 27% of them. That is not a headline number, but it clears the practical ~15% hurdle developers typically need to secure project finance, and this is a feasibility study, the build-ready estimate with a plus or minus 15% band, so the figure carries real weight. The payback of 4.3 years is long, ranking lower than 23% of peers, which stretches the window of commodity-price risk before capital is returned. The NPV of $676M ranks higher than 48% of the 31 projects we track, a middle-of-the-pack result that matches the IRR's modest positioning.
The constraint that matters most is capital intensity. Initial capex of $1.75B is 259% of NPV, a capital-intensive build that ranks lower than 26% of the 35 copper projects we track. Yet the sharpest funding signal here is the build cost relative to the company's market cap of US$145.05B: the $1.75B outlay is small for a large-cap with 12 projects in our tracked portfolio. Financing this is not the risk it would be for a smaller developer; the question is whether this project earns a place in that diversified capital budget. The study's price assumption of US$3.80/lb Cu sits well below the current spot of $6.52/lb, implying the returns are conservative on price, though the long payback tempers that upside.
Peru is a copper jurisdiction with established mining infrastructure, and a 20-year mine life gives the asset longevity. The single question that decides whether this works is whether the company's capital allocation committee, facing a portfolio of a dozen projects, prioritizes a lower-return, capital-intensive build here over alternatives. The market, with an NPV well below the company's market cap, has not needed to price this project for the stock to work, which cuts both ways: it removes financing pressure but also means the project must clear a high internal bar to matter.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.