NOTE 18-RELATED PARTY TRANSACTIONS:

Receivable and payable balances with related parties are shown below (in millions):

	As of December 31,
	2012		2011
Related parties receivable current:
Grupo Mexico, S.A.B de C.V. and affiliates	$	1.8	$	0.7
Asarco LLC	—		0.2
Compania Perforadora Mexico S.A.P.I. de C.V.	0.5		0.1
Mexico Proyectos y Desarrollos, S.A. de C.V. and affiliates	—		1.0
	$	2.3	$	2.0

Related parties receivable non-current:
Mexico Generadora de Energia S.de R.L. (“MGE”)	$	184.0	$	—

Related parties payable:
Grupo Mexico S.A.B. de C.V. and affiliates	$	—	$	2.0
Asarco LLC	15.3
Higher Technology S.A.C.	0.2		0.1
Breaker, S.A. de C.V	—		0.2
Mexico Transportes Aereos S.A. de C.V. (“Mextransport”)	0.1		0.5
Mexico Proyectos y Desarrollos, S.A. de C.V. and affiliates	2.1		0.3
Ferrocarril Mexicano S.A. de C.V.	2.6		1.3
	$	20.3	$	4.4

The Company has entered into certain transactions in the ordinary course of business with parties that are controlling shareholders or their affiliates. These transactions include the lease of office space, air transportation and construction services and products and services related to mining and refining. The Company lends and borrows funds among affiliates for acquisitions and other corporate purposes. These financial transactions bear interest and are subject to review and approval by senior management, as are all related party transactions. It is the Company’s policy that the Audit Committee of the Board of Directors shall review all related party transactions. The Company is prohibited from entering or continuing a material related party transaction that has not been reviewed and approved or ratified by the Audit Committee.

Purchase activity:

The following table summarizes the purchase activity with related parties in 2012, 2011 and 2010 (in millions):

	2012		2011		2010
Grupo Mexico and affiliates:
Grupo Mexico S.A B. de C.V	$	13.9	$	13.9	$	10.9
Ferrocarril Mexicano, S.A de C.V.	13.9		11.6		3.5
Mexico Proyectos y Desarrollos, S.A. de C.V. and affiliates	49.5		34.4		29.0
Compania Perforadora Mexico S.A.P.I. de C.V.	2.2		1.8		0.2
Consorcio Tricobre	—		0.5		5.3
Consorcio CESEL — CONSUTEC	—		3.3		—
Asarco LLC	58.6		23.4		6.6

Other Larrea family companies:
Mexico Compania de Productos Automotrices, S.A. de C.V.	—		0.2		2.3
Mextransport	2.7		2.8		3.0
Cadena Mexicana de Exhibicion S.A. de C.V.	—		—		0.2

Companies with relationships to SCC executive officers’ families:
Higher Technology S.A.C.	3.1		1.9		2.8
Servicios y Fabricaciones Mecanicas S.A.C.	0.2		0.6		0.2
Sempertrans France Belting Technology	0.3		0.2		0.4
PIGOBA, S.A. de C.V.	0.8		0.2		0.6
Breaker, S.A. de C.V.	2.3		5.3		1.5
Total purchased	$	147.5	$	100.1	$	66.5

Grupo Mexico, the Company’s ultimate parent and the majority indirect stockholder of the Company, and its affiliates provide various services to the Company. These services are primarily related to accounting, legal, tax, financial, treasury, human resources, price risk assessment and hedging, purchasing, procurement and logistics, sales and administrative and other support services. The Company pays Grupo Mexico for these services. The Company expects to continue to pay for these services in the future.

In addition, during 2010 the Company made donations of $0.8 million to Fundacion Grupo Mexico, an organization dedicated to promoting social and economic development of the communities close to the Company’s Mexican operations.

The Company’s Mexican operations paid fees for freight services provided by Ferrocarril Mexicano, S.A de C.V. and for drilling services provided by Compania Perforadora Mexico S.A.P.I. de C.V., both subsidiaries of Grupo Mexico.

The Company’s Mexican operations purchased from Asarco, a subsidiary of Grupo Mexico, scrap and other residual copper mineral. Also, in the second quarter of 2010 the Company recovered from Asarco $7.7 million related to a previously written-off net accounts receivable position. This recovery was recorded in the consolidated statement of earnings as follows: $5.0 million in cost of sales, $1.6 million in other income and $1.1 million as interest income.

The Company’s Mexican operations paid fees for construction services provided by Mexico Constructora Industrial and its affiliates and in 2011, the Company’s Peruvian operations paid fees for engineering and consulting services provided by Exploraciones Mineras del Peru S.A.C., a Peruvian company in which Grupo Mexico Servicios de Ingenieria, S.A. de C.V has a 99.97%. The three companies are subsidiaries of Mexico Proyectos y Desarrollos, S.A. de C.V. a direct subsidiary of Grupo Mexico.

In 2005, the Company organized MGE, as a subsidiary of Minera Mexico, for the construction of two power plants to supply power to the Company’s Mexican operations. In May 2010, the Company’s Mexican operations granted a $350 million line of credit to MGE for the construction of the power plants. That line of credit was due on December 31, 2012 and carried an interest rate of 4.18%. In the first quarter of 2012, Controladora de Infraestructura Energetica Mexico, S. A. de C. V., an indirect subsidiary of Grupo Mexico, acquired 99.999% of MGE through a capital subscription of 1,928.6 million of Mexican pesos (approximately $150 million), reducing Minera Mexico’s participation to less than 0.001%. As consequence, of this change in control MGE became an indirect subsidiary of Grupo Mexico. Additionally, at the same time, MGE paid $150 million to the Company’s Mexican operations partially reducing the total debt. At December 31, 2012, the outstanding balance of $184.0 million was restructured as subordinated debt of MGE. The $184.0 million includes $37.6 million drawn on the line of credit in 2012 and $146.4 million drawn through December 31, 2011. It is expected that MGE will complete the construction of the first power plant in 2013 and the second in 2014. MGE will repay its debt to the Company using a percentage of its profits until such time as the debt is satisfied.

The Company’s Peruvian operations paid fees for engineering and consulting services provided by Consorcio Tricobre and Consorcio CESEL-CONSUTEC. Both are Peruvian consortiums in which Servicios de Ingenieria Consultec, S.A. de C. V., a subsidiary of Grupo Mexico, had a 42.7% and 50% participation, respectively. These consortiums were dissolved in 2011.

The Larrea family controls a majority of the capital stock of Grupo Mexico, and has extensive interests in other businesses, including aviation and real estate. The Company engages in certain transactions in the ordinary course of business with other entities controlled by the Larrea family relating to the lease of office space and air transportation. In connection with this, the Company paid fees for maintenance services and sale of vehicles provided by Mexico Compania de Productos Automotrices, S.A. de C.V., a company controlled by the Larrea family liquidated in 2011.

Additionally, in 2007, the Company’s Mexican subsidiaries provided guaranties for two loans obtained by MexTransport, a company controlled by the Larrea family, from Bank of Nova Scotia in Mexico. One of these loans has been repaid and the remaining loan requires semi-annual repayments. Conditions and balance as of December 31, 2012 are as follows:

		Loan Open
Original loan balance (in millions)		$8.5
Maturity		August 2013
Interest rate		Libor + 0.15%
Remaining balance at December 31, 2012 (in millions)		$1.3

MexTransport provides aviation services to the Company’s Mexican operations. The guaranty provided to MexTransport is backed up by the transport services provided by MexTransport to the Company’s Mexican subsidiaries.

In 2010, the Company purchased publicity services from Cadena Mexicana de Exhibicion S.A. de C.V., a subsidiary of Grupo Cinemex, a company controlled by the Larrea family.

The Company purchased industrial materials from Higher Technology S.A.C., and paid fees for maintenance services provided by Servicios y Fabricaciones Mecanicas S.A.C. Mr. Carlos Gonzalez, the son of SCC’s Chief Executive Officer, has a proprietary interest in these companies.

The Company purchased industrial material from Sempertrans France Belting Technology, in which Mr. Alejandro Gonzalez is employed as a sales representative. Also, the Company purchased industrial material from PIGOBA, S.A. de C.V., a company in which Mr. Alejandro Gonzalez has a proprietary interest. Mr. Alejandro Gonzalez is the son of SCC’s Chief Executive Officer.

The Company purchased industrial material and services from Breaker, S.A. de C.V., a company in which Mr. Jorge Gonzalez, son-in-law of SCC’s Chief Executive Officer, has a proprietary interest.

Sales activity:

The Company sold copper cathodes, rod and anodes, as well as sulfuric acid, silver, gold and lime to Asarco. In addition, the Company received fees for building rental and maintenance services provided to Mexico Proyectos y Desarrollos, S.A. de C.V. and its affiliates, and to Perforadora Mexico S.A.P.I de C.V., both subsidiaries of Grupo Mexico and to Mextransport, a Company controlled by the Larrea family.

The following table summarizes the sales and other revenue activity with related parties in 2012 and 2011 (in millions).

	2012		2011		2010
Asarco	$	23.5	$	68.8	$	43.5
Mexico Proyectos y Desarrollos, S.A. de C.V. and affiliates	0.5		0.5		0.5
Perforadora Mexico S.A. de C.V.	—		0.2		0.2
Mextransport	0.9		—		—
Total	$	24.9	$	69.5	$	44.2

It is anticipated that in the future the Company will enter into similar transactions with these same parties.