SCCO — Deep Dive (cost-curve position and the governance discount)

Thesis: Lowest-cost-quartile copper pure-play at a governance discount; cost-curve position now numerically grounded, control-structure claim still needs the DEF 14A read; mid-pullback tape, watch not entry.

What SCCO is

Southern Copper Corporation mines, smelts, and refines copper (plus molybdenum, zinc, silver) across Peru, Mexico, and smaller Argentina/Chile exploration ground — the Toquepala/Cuajone complex in Peru and the La Caridad/Buenavista complex in Mexico are its core assets (data/stocks/SCCO/info.json). It is NYSE-listed but the same source states plainly: "Southern Copper Corporation operates as a subsidiary of Americas Mining Corporation." That is the one on-disk confirmation of a controlling-parent structure — it does not name Grupo México or state a voting percentage (see governance section).

Fundamentals — SCCO vs FCX, cross-checked

Like-for-like quarter (period end 2025-09-30, both 10-Qs):

FY2025 (10-K annual tags, EDGAR): SCCO revenue $13,420.0M / operating income $7,001.7M / net income $4,348.2M (filed 2026-02-27); FCX revenue $25,186.0M / operating income $6,518.0M / net income $4,152.0M (filed 2026-02-13). SCCO's summed Massive quarters tie to EDGAR annual figures to the dollar on all three lines.

Cross-check findings:

• SCCO: revenue, operating income, and net income tie exactly between Massive and EDGAR on every overlapping quarter. EDGAR also carries a quarter Massive hasn't absorbed — Q1 2026 (10-Q filed 2026-04-30): revenue $4,251.4M, operating income $2,480.4M, net income $1,581.9M. EDGAR-only, unreconciled against Massive.
• FCX comparison caution: summed Massive quarterly revenue for FY2025 ($25,915.0M) runs ~$729M above EDGAR's tagged FY2025 revenue ($25,186.0M), while profit lines match exactly — treat FCX's Massive revenue line with more caution than its profit lines (engine follow-up filed).
• Neither company currently tags GrossProfit in EDGAR XBRL (SCCO's last tagged value is FY2019; FCX has none) — gross-profit figures above are Massive's own computation, not independently EDGAR-verified.

Balance sheet (clean quarters only — see data flag): SCCO Q4 2025 total assets $21,381.4M, total liabilities $10,276.5M, total equity $11,104.9M, long-term debt $6,750.7M; FCX Q1 2026 total assets $58,840.0M, total equity $31,511.0M, long-term debt $9,414.0M (Massive balance-sheets.json). Data flag: SCCO's Q1/Q2 2025 and Q1/Q2 2024 balance-sheet rows carry total_liabilities equal to the NEGATIVE of total_equity — an internal sign error in the Massive file, not a real figure. Those four quarters are excluded here; FCX's file shows no equivalent issue. Engine follow-up filed.

Operating cash flow, most recent quarter each: SCCO $1,494.3M (Q4 2025), FCX $1,495.0M (Q1 2026) — nearly identical dollars on very different revenue bases (Massive cash-flow-statements.json).

Tape state (data/summaries/copper.json, 2026-07-17 close)

SCCO: $172.48, RSI 45.5, trend weak-down, regime pullback, −10.6% 30d, −22.19% from 52wk high, vs SMA50 −4.6% ($180.83), vs SMA200 +4.8% ($164.51), goldenCross true / deathCross false, nearest support shelf $126.33. FCX: $58.38, RSI 40.4, weak-down. COPX: $73.35, RSI 41, down, −26.64% from high. All three read as a sector-wide pullback, not an SCCO-specific move — the whole copper-miner complex is below its 20/50-day averages while holding above its 200-day.

Cost-curve read, bounded by reported figures

On raw Q3 2025 numbers, FCX's revenue line is roughly double SCCO's, but the gap between the two companies' gross-profit and operating-income lines is far narrower than the gap between their revenue lines ($2,020.5M vs $2,142.0M gross profit; $1,768.8M vs $1,972.0M operating income, against $3,377.3M vs $6,972.0M revenue). That pattern is consistent with the "lowest-cost quartile" framing the prior copper investigation used for SCCO — no margin percentage is computed here; the reader is looking at the same raw components both sources report. The prior characterization (research/investigations/2026-07-01-copper-supply-chain-electrification-bottleneck.md: "cleanest pure copper, lowest-cost quartile") was qualitative; this pass is the first on-disk numeric look at that claim.

Governance-discount frame — verification status

The prior copper investigation named "Grupo México control (minority-holder discount)" as a standing risk but cited no filing. This pass adds one confirmed data point — SCCO's own business description says it "operates as a subsidiary of Americas Mining Corporation" (info.json) — and one open lead: SCCO's EDGAR filing index (edgar/submissions.json) shows a DEF 14A proxy filed 2026-04-17 (accession 0001104659-26-044982), the correct primary source for the controlling shareholder's exact ownership percentage and any board-designation mechanics. That filing was not read this session. The governance-discount frame is named but unverified on disk — a parent-subsidiary relationship is confirmed; the "Grupo México" identity and control percentage are not sourced here; a proxy-statement read is the concrete next step.

One data point on investor tolerance for the governance question: Duquesne (Druckenmiller) initiated a new SCCO position at 0.39% weight in the 2025-12-31 13F (research/actions/2025-12-31-druckenmiller-13f-buy-scco.md) — a named investor took the size despite the standing frame, though one 13F entry is not verification of the control structure.

What would make this an entry (trend-hold terms)

At RSI 45.5 and 4.6% below its 50-day average, SCCO is mid-pullback — not basing, not breaking out (regime: pullback, trend: weak-down). Long-term structure intact: +4.8% above the 200-day with a live golden cross and no death cross — a correction inside an uptrend, not a trend break. The entry shape: RSI back through 50, price reclaiming the 20-day ($175.52) then the 50-day ($180.83), with the $126.33 support shelf never broken. None of that is in place at the current read.

Conviction: low (watch, not entry) — cost-curve position favorable on raw dollars and cross-checks cleanly; the governance frame needs the DEF 14A read before it can be cited as fact; the tape has no flag/breakout structure yet. Revisit on a proxy-statement pass plus a 50-day reclaim with RSI above 50.

Sources

research/market-engine/data/stocks/SCCO/massive/*.json, data/stocks/SCCO/edgar/key-financials.json + submissions.json + info.json, data/stocks/FCX/massive/*.json, data/stocks/FCX/edgar/key-financials.json (all fetched 2026-07-18), data/summaries/copper.json (2026-07-17 close), research/investigations/2026-07-01-copper-supply-chain-electrification-bottleneck.md, research/actions/2025-12-31-druckenmiller-13f-buy-scco.md.