SPCC Reports Fourth Quarter and Full-Year Results.

Business Editors

PHOENIX--(BUSINESS WIRE)--Jan. 30, 2003

Southern Peru Copper Corp. (NYSE: PCU) (LSE: PCUC1) (SPCC) today reported net earnings of $14.8 million, or diluted earnings per share of 18 cents, for the fourth quarter of 2002 compared with net earnings before extraordinary items of $13.9 million, or diluted earnings per share of 18 cents, for the fourth quarter of 2001. Net earnings after extraordinary items in the fourth quarter of 2002 represent an increase of 25 percent over the same period of 2001.

For the full-year 2002, net earnings before extraordinary items increased 42 percent to $69.1 million, or diluted earnings per share of 86 cents, compared with $48.7 million, or diluted earnings per share of 61 cents for 2001. EBITDA increased to $186.8 million in 2002 compared to $165.5 million in the year 2001. Net indebtedness (defined as debt less cash and marketable securities) decreased to $151.5 million in 2002 compared to $183.2 million in 2001.

Sales of products were $165.2 million in the fourth quarter of 2002 compared with $160.8 million in the fourth quarter of 2001, which represents an increase of 2.8 percent over the 2001 period. Sales of products for the full-year 2002 totaled $664.7 million compared with $657.5 million for 2001, an increase of 1.1 percent over the full-year 2001. Molybdenum and silver, the company's significant by-products, represented 11.9 percent of the total sales in the year 2002 and 8.0 percent in the year 2001. For the full-year 2002 molybdenum sales represented 9.0 percent, silver 2.9 percent and copper, the principal product of the company, 88.1 percent of the total sales.

Metal Prices

The average price for copper on the London Metals Exchange (LME) and the COMEX division of the New York Mercantile Exchange in the fourth quarter of 2002 was 70 cents and 71 cents per pound, respectively, compared with 65 cents and 66 cents in the year earlier period. The average price for molybdenum, a by-product of the company's copper production, was $3.28 per pound this quarter, compared with $2.32 in the fourth quarter of 2001. Silver, another by-product, averaged $4.52 per ounce on COMEX in the fourth quarter of 2002, compared with $4.27 in the fourth quarter of 2001.

For the full-year 2002, the average price for copper on the LME and COMEX was 71 cents and 72 cents per pound, respectively, compared with 72 cents and 73 cents per pound in 2001, a decrease of 1 percent in 2002. The price for molybdenum was higher in 2002 at $3.77 per pound compared to $2.36 per pound in 2001. The price for COMEX silver was higher in 2002 at $4.60 per ounce compared with $4.36 per ounce in 2001.

Production

Despite a loss of 5 million pounds of copper production due to strike activity in the fourth quarter of the year, for the full-year 2002, copper production increased 1.2 percent to 764 million pounds. In addition, the company processed 66 million pounds from purchased concentrates. The increase in SPCC production was principally due to higher ore grades for Cuajone material and higher throughput at the Toquepala concentrator related with the startup in September of the facility expansion. SX/EW copper production decreased by 3.5 million pounds because of lower grades of PLS (Pregnant Leaching Solution).

In 2002, SPCC's smelter processed 1.18 million tons of concentrates, a new record, and 1.6 percent higher than 2001; however, blister copper production decreased 3.7 percent to 692.6 million pounds, as concentrates with lower copper contents were treated. Improved operations at the Ilo refinery increased cathode production by 1.6 percent to 621 million pounds, another new production record at the refinery.

Results and Expansion Program

Commenting on the company's economic results, German Larrea Mota-Velasco, chairman of SPCC's board of directors, said, "The increase in the company's results for both the fourth quarter and the year 2002 with respect to the year 2001 is due to an increase of metal prices for molybdenum and silver, the most important by-products of the company, despite a slight decrease in copper volume for the fourth quarter and the year and a slight decrease in the copper price for the year. In addition, cost-cutting programs reduced costs in 2002. Administrative and production costs also were reduced. Operating break-even cost was reduced by 3.7 cents per pound to 45.6 cents in the year 2002 from 49.3 cents in the year 2001. This reduction represents a 7.5-percent improvement over 2001 costs."

Reporting on the company's expansion and modernization program, Oscar Gonzalez Rocha, president and general director of SPCC, said, "The Toquepala concentrator expansion and modernization project reached 100 percent completion at the end of August 2002, with an investment of US$69.5 million. With the completion of this project the Toquepala concentrator milling capacity has increased from 45,000 metric tons to 60,000 metric tons per day. This increased production now gives SPCC the ability to fill the Ilo smelter with its own concentrate production."

Southern Peru Copper Corp. (SPCC) is one of Peru's largest companies and one of the 10 largest copper producers worldwide. The ownership of SPCC shares, either directly or through subsidiaries, is as follows: Grupo Mexico (54.2 percent), Cerro Trading Co. (14.2 percent); Phelps Dodge Corp. (14.0 percent) and other shareholders (17.6 percent).