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Southern Copper Corp., one of the biggest copper companies by mineral reserves, expects to challenge for top producer status by the end of the decade even as output stumbles this year.

The Peru-focused company reported a 4.3% drop in copper production last year and expects the decline to continue this year, guiding for 922,000 metric tons of the metal in 2022. Behind the temporary pullback is a mining plan that sees the company encountering sections of lower ore quality and recoveries.    

That’s bad news for a tight global copper market in which Covid-rattled producers and their supply chains have struggled to meet demand. But Southern Copper expects to return to richer veins from next year before ramping up to levels that are similar to the current output of the world’s No. 1 supplier Codelco.

“After this year, we believe our 2023 production will bounce back to one million tons of copper,” the company wrote in an earnings statement late Tuesday. “By the end of this decade, as our organic growth projects mature, we expect to hit the 1.8 million-ton copper production mark.” 

Southern is developing projects worth $2.8 billion in Peru. If the up-and-coming Michiquillay and Los Chancas projects are included, that figure jumps to $7.9 billion. Analysts will be looking for further guidance on the pipeline, including the controversial Tia Maria project, when executives speak on a call at 11 a.m. New York time.

(By James Attwood)