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RELATED PARTY TRANSACTIONS: | 3 Months Ended
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Mar. 31, 2020
RELATED PARTY TRANSACTIONS: |
RELATED PARTY TRANSACTIONS: | ​ NOTE 6 — RELATED PARTY TRANSACTIONS: ​ 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 and railroad transportation, construction services, energy supply, and other 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. ​ Receivable and payable balances with related parties are shown below (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At March 31, | ​ | At December 31, | ​
​ |  | 2020 |  | 2019 | ​
Related parties receivable current: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grupo Mexico and affiliates: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 15.9 | ​ | $ | 10.8 | ​
AMMINCO Apoyo Administrativo, S.A. de C.V. (“AMMINCO”) | ​ |  | — | ​ |  | 0.1 | ​
Compania Perforadora Mexico S.A.P.I. de C.V. and affiliates | ​ |  | 0.3 | ​ |  | 0.3 | ​
Grupo Mexico | ​ |  | 2.7 | ​ |  | 2.7 | ​
Mexico Generadora de Energia S. de R.L. ("MGE") | ​ | ​ | 15.5 | ​ | ​ | 15.3 | ​
Mexico Proyectos y Desarrollos, S.A. de C.V. and affiliates | ​ | ​ | 0.2 | ​ | ​ | 0.2 | ​
Related to the controlling group: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Boutique Bowling de Mexico, S.A. de C.V. | ​ | ​ | 0.1 | ​ | ​ | 0.1 | ​
Mexico Transportes Aereos, S.A. de C.V. ("Mextransport") | ​ | ​ | 0.5 | ​ | ​ | 0.4 | ​
Operadora de Cinemas, S.A. de C.V. | ​ | ​ | 0.1 | ​ | ​ | 0.1 | ​
​ | ​ | $ | 35.3 | ​ | $ | 30.0 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Related parties receivable non-current: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grupo Mexico and affiliates: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 59.0 | ​ | $ | 59.5 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Related parties payable: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grupo Mexico and affiliates: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 23.8 | ​ | $ | 4.3 | ​
AMMINCO | ​ | ​ | 9.1 | ​ | ​ | 16.9 | ​
Eolica El Retiro, S.A.P.I. de C.V. | ​ |  | 0.1 | ​ |  | — | ​
Ferrocarril Mexicano, S.A. de C.V. | ​ |  | 6.1 | ​ |  | 6.4 | ​
Grupo Mexico | ​ |  | 1.3 | ​ |  | 1.1 | ​
MGE | ​ | ​ | 34.7 | ​ | ​ | 40.2 | ​
Mexico Proyectos y Desarrollos, S.A. de C.V. and affiliates | ​ | ​ | 6.1 | ​ | ​ | 16.0 | ​
Related to the controlling group: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Boutique Bowling de Mexico, S.A. de C.V. | ​ |  | 0.3 | ​ |  | 0.2 | ​
Mexico Transportes Aereos, S.A. de C.V. (“Mextransport”) | ​ |  | — | ​ |  | 1.2 | ​
Operadora de Cinemas, S.A. de C.V. | ​ | ​ | 0.1 | ​ | ​ | 0.1 | ​
​ | ​ | $ | 81.6 | ​ | $ | 86.4 | ​
​ Purchase and sale activity: ​ Grupo Mexico and affiliates: ​ The following table summarizes the purchase and sale activities with Grupo Mexico and its affiliates in the three months ended March 31, 2020 and 2019 (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019
Purchase activity | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 62.5 | ​ | $ | 10.0
AMMINCO | ​ | ​ | 4.4 | ​ | ​ | 2.4
Eolica El Retiro, S.A.P.I. de C.V. | ​ |  | 0.1 | ​ |  | 0.8
Ferrocarril Mexicano, S.A. de C.V. | ​ |  | 12.0 | ​ |  | 10.6
Grupo Mexico | ​ | ​ | 2.5 | ​ | ​ | 2.5
MGE | ​ |  | 51.6 | ​ |  | 55.2
Mexico Proyectos y Desarrollos S.A. de C.V. and affiliates | ​ |  | 14.3 | ​ |  | 10.8
Total purchases | ​ | $ | 147.4 | ​ | $ | 92.3
Sales activity | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 5.9 | ​ | $ | 2.0
MGE | ​ | ​ | 9.8 | ​ | ​ | 15.1
Total sales | ​ | $ | 15.7 | ​ | $ | 17.1
​ Grupo Mexico, the 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. In 2018, AMMINCO, a subsidiary of Grupo Mexico, began providing these services for the Company's Peruvian operations. The Company pays Grupo Mexico and AMMINCO for these services and expects to continue requiring these services in the future. ​ In the first quarter of 2020, the Company did not make donations to Fundacion Grupo Mexico, A.C., an organization dedicated to promoting the social and economic development of the communities close to the Company’s Mexican operations. In the first quarter of 2019, the Company made donations of $3.4 million to this this organization. ​ The Company’s Mexican operations paid fees for freight services provided by Ferrocarril Mexicano, S.A de C.V. and for construction services provided by Mexico Proyectos y Desarrollos, S.A. de C.V. and its affiliates, which are all subsidiaries of Grupo Mexico. ​ The Company’s Mexican operations purchased scrap, concentrate and other copper mineral from Asarco LLC, and power from MGE. Both companies are subsidiaries of Grupo Mexico. ​ In 2012, the Company signed a power purchase agreement with MGE, whereby MGE will supply some of the Company’s Mexican operations with power through 2032. MGE has two natural gas-fired combined cycle power generating units, with a net total capacity of 516.2 megawatts and has been supplying power to the Company since December 2013. Currently, MGE is supplying approximately 1% of its power output to third-party energy users; compared to 2.1% at March 31, 2019. ​ In 2014, Mexico Generadora de Energia Eolica, S. de R.L. de C.V, an indirect subsidiary of Grupo Mexico, located in Oaxaca, Mexico, acquired Eolica el Retiro. Eolica el Retiro is a windfarm with 37 wind turbines. This company started operations in January 2014 and started to sell power to Industrial Minera Mexico, S.A. de C.V. and subsidiaries (IMMSA) and other subsidiaries of Grupo Mexico in the third quarter of 2014. Currently, Eolica el Retiro is supplying approximately 3% of its power output to IMMSA and Mexcobre, compared to 20.9% at March 31, 2019. ​ The Company sold copper rod as well as sulfuric acid, silver and gold to Asarco LLC. ​ In September 2019, Asarco LLC signed a promissory note to pay to the Company´s Mexican operations $62.0 million plus interest no later than October 31, 2021, with quarterly payments of $0.5 million. The annual interest rate of the note is Libor plus 200 basis points, which will be reviewed annually. As of March 31, 2020, $59.0 million is recorded in a separate line as a long-term related party receivable in the condensed consolidated balance sheet. Related to this promissory note, the Company recorded interest income of $0.6 million in the first quarter of 2020. ​ In addition, the Company received fees for natural gas and services provided to MGE; a subsidiary of Grupo Mexico. ​ Companies with relationships to the controlling group: ​ The following table summarizes the purchase and sales activities with other Larrea family companies in the three months ended March 31, 2020 and 2019 (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019
Purchase activity | ​ | ​ | ​ | ​ | ​ | ​
Boutique Bowling de Mexico S.A. de C.V. | ​ | $ | 0.1 | ​ | $ | 0.1
Mextransport | ​ | ​ | 1.9 | ​ | ​ | —
Operadora de Cinemas S.A. de C.V. | ​ | ​ | 0.1 | ​ | ​ | (*)
Total purchases | ​ | $ | 2.1 | ​ | $ | 0.1
​ | ​ | ​ | ​ | ​ | ​ | ​
Sales activity | ​ | ​ | ​ | ​ | ​ | ​
Boutique Bowling de Mexico S.A. de C.V. | ​ | $ | (*) | ​ | $ | (*)
Empresarios Industriales de Mexico, S.A. de C.V. | ​ | ​ | — | ​ | ​ | 0.1
Mextransport | ​ | ​ | 0.4 | ​ | ​ | 0.5
Operadora de Cinemas S.A. de C.V. | ​ | ​ | (*) | ​ | ​ | (*)
Total sales | ​ | $ | 0.4 | ​ | $ | 0.6
(*) amount is lower than $0.1 million ​ The Larrea family controls a majority of the capital stock of Grupo Mexico, and has extensive interests in other businesses, including transportation, real estate and entertainment. 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, air transportation and entertainment. ​ The Company’s Mexican operations paid fees for entertainment services provided by Boutique Bowling de Mexico, S.A de C.V. and Operadora de Cinemas, S.A. de C.V. Both companies are controlled by the Larrea family. ​ Mextransport provides aviation services to the Company´s Mexican operations. This is a company controlled by the Larrea family. ​ In addition, the Company received fees for building rental and maintenance provided to Boutique Bowling de Mexico, S.A. de C.V., Operadora de Cinemas, S.A. de C.V and Mextransport. The Company´s Mexican operations also received fees for security services provided to Empresarios Industriales de Mexico, S.A. de C.V. This is also a company controlled by the Larrea family. ​ Equity Investment in Affiliate: The Company has a 44.2% participation in Compania Minera Coimolache S.A. (“Coimolache”), which it accounts for on the equity method. Coimolache owns Tantahuatay, a gold mine located in the northern part of Peru. ​ In addition, the Company has a 30.0% participation in Apu Coropuna S.R.L. (“Apu Coropuna”), which it accounts for on the equity method. Apu Coropuna is a company which undertakes exploration activities in the Pucay prospect, located in Arequipa, Peru. ​ It is anticipated that in the future the Company will enter into similar transactions with these same parties. ​ In the first quarter of 2020, the Company did not have purchase or sales activities with companies having relationships with SCC executive officers.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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