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RELATED PARTY TRANSACTIONS: | 6 Months Ended
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Jun. 30, 2026
RELATED PARTY TRANSACTIONS: |
RELATED PARTY TRANSACTIONS: | ​ NOTE 5 — 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. Article Nine of the Amended and Restated Certificate of Incorporation of the Company prohibits the Company from engaging in a Material Affiliate Transaction that was not the subject of prior review by a committee of the Board of Directors with at least three members, each of whom is independent, and defines a Material Affiliate Transaction as a transaction or series of related transactions between Grupo Mexico or one of its affiliates (other than the Company or its subsidiaries), on the one hand, and the Company or one of its subsidiaries, on the other hand, that involves consideration of more than $10.0 million in the aggregate. It is the Company’s policy that (i) a Material Affiliate Transaction not be entered into or continued without the review and approval by the Audit Committee or its subcommittee of related party transactions comprised of independent directors,(ii) any potential related party transaction process with aggregate consideration between $8.0 million and $10.0 million be authorized by the General Counsel and Chief Financial Officer of the Company and (iii) that all related party transactions, including any Material Affiliate Transaction, be reported to the Audit Committee of the Board of Directors or to its subcommittee of related party transactions. ​ Receivable and payable balances with related parties are shown below (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At June 30, | ​ | At December 31,
​ | ​ ​ ​ | 2026 | ​ ​ ​ | 2025
Related parties receivable current: | ​ | ​ | ​ | ​ | ​ | ​
Grupo Mexico and affiliates: | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 7.6 | ​ | $ | 7.1
AMMINCO Apoyo Administrativo, S.A. de C.V. (“AMMINCO”) | ​ | ​ | (*) | ​ | ​ | (*)
Ferrocarril Mexicano, S.A. de C.V. | ​ |  | (*) | ​ | ​ | (*)
Mexico Generadora de Energia S. de R.L. ("MGE") | ​ | ​ | 1.1 | ​ | ​ | 7.6
Mexico Compania Constructora S.A de C.V. | ​ | ​ | (*) | ​ | ​ | (*)
​ | ​ | ​ | ​ | ​ | ​ | ​
Related to the controlling group: | ​ | ​ | ​ | ​ | ​ | ​
Empresarios Industriales de Mexico, S.A. de C.V. | ​ | ​ | 1.9 | ​ | ​ | 1.5
Mexico Transportes Aereos, S.A. de C.V. ("Mextransport") | ​ | ​ | 0.3 | ​ | ​ | —
Operadora de Cinemas, S.A. de C.V. | ​ | ​ | 0.1 | ​ | ​ | 0.1
​ | ​ | $ | 10.9 | ​ | $ | 16.2
​ | ​ | ​ | ​ | ​ | ​ | ​
Related parties payable: | ​ | ​ | ​ | ​ | ​ | ​
Grupo Mexico and affiliates: | ​ | ​ | ​ | ​ | ​ | ​
AMMINCO | ​ | $ | 10.1 | ​ | $ | 15.9
Asarco LLC | ​ | ​ | 38.9 | ​ | ​ | 61.1
Eolica El Retiro, S.A.P.I. de C.V. | ​ |  | 0.5 | ​ |  | 0.3
Ferrocarril Mexicano, S.A. de C.V. | ​ |  | 4.4 | ​ |  | 4.0
Grupo Mexico Servicios | ​ | ​ | 2.3 | ​ | ​ | 3.3
MGE | ​ | ​ | 44.7 | ​ | ​ | 30.2
Mexico Compania Constructora S.A de C.V. | ​ | ​ | 9.7 | ​ | ​ | 12.4
Parque Eolico de Fenicias, S. de R.L. de C.V. | ​ | ​ | 8.4 | ​ | ​ | 7.5
Grupo Mexico Servicios de Ingenieria, S.A. de C.V. | ​ | ​ | 1.4 | ​ | ​ | 2.3
Related to the controlling group: | ​ | ​ | ​ | ​ | ​ | ​
Boutique Bowling de Mexico, S.A. de C.V. | ​ |  | 1.1 | ​ |  | 0.8
Mextransport | ​ |  | 0.5 | ​ |  | 0.4
Operadora de Cinemas, S.A. de C.V. | ​ | ​ | 0.5 | ​ | ​ | 0.3
​ | ​ | $ | 122.5 | ​ | $ | 138.4
(*) Less than $0.1 million. 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 six-month periods ended June 30, 2026 and 2025 (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ ​ ​ | 2026 | ​ ​ ​ | 2025
Purchase activity | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 3.0 | ​ | $ | 28.0
Eolica El Retiro, S.A.P.I. de C.V. | ​ |  | 0.3 | ​ |  | 1.0
Ferrocarril Mexicano, S.A. de C.V. | ​ |  | 23.6 | ​ |  | 21.3
Grupo Mexico Servicios | ​ | ​ | 10.1 | ​ | ​ | 10.1
AMMINCO | ​ | ​ | 6.0 | ​ | ​ | 5.0
MGE | ​ |  | 80.9 | ​ |  | 109.8
Mexico Compania Constructora S.A. de C.V. | ​ | ​ | 16.1 | ​ | ​ | 24.8
Parque Eolico de Fenicias, S. de R.L. de C.V. | ​ | ​ | 22.7 | ​ | ​ | 20.3
Grupo Mexico Servicios de Ingenieria S. A. de C.V. | ​ |  | 9.3 | ​ |  | 4.7
Total purchases | ​ | $ | 171.9 | ​ | $ | 225.0
Sales activity | ​ | ​ | ​ | ​ | ​ | ​
Asarco LLC | ​ | $ | 24.6 | ​ | $ | 27.4
AMMINCO | ​ | ​ | 0.1 | ​ | ​ | (*)
Ferrocarril Mexicano, S.A. de C.V. | ​ |  | (*) | ​ |  | —
MGE | ​ | ​ | (9.3) | ​ | ​ | 31.9
Total sales | ​ | $ | 15.5 | ​ | $ | 59.3
(*) Less than $0.1 million. ​ 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. The Company pays AMMINCO and Grupo Mexico Servicios, subsidiaries of Grupo Mexico, for these services and expects to continue requiring these services in the future. ​ The Company’s Mexican operations paid fees for freight services provided by Ferrocarril Mexicano, S.A. de C.V., which is a subsidiary of Grupo Mexico. The Company´s Peruvian and Mexican operations paid fees for engineering services provided by Grupo Mexico Servicios de Ingenieria, S.A. de C.V., and the Company’s Mexican operations paid fees for construction services provided by Mexico Compania Constructora S.A. de C.V. Both companies are subsidiaries of Mexico Proyectos y Desarrollos, S.A. de C.V., which is a subsidiary of Grupo Mexico. ​ The Company’s Mexican operations purchased copper cathodes, concentrate and starter sheets from Asarco LLC and also paid fees as reimbursement of freight fees. Additionally, the Company´s Mexican operations purchased power from MGE. Both companies are subsidiaries of Grupo Mexico. ​ In 2012, the Company signed a power purchase agreement with MGE, whereby MGE supplies 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. In the first six months of 2026, MGE supplied approximately 18.3% of its power output to third-party energy users, compared to 0.3% in the same period of 2025. ​ 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, S.A.P.I. de C.V. (“Eolica el Retiro”). Eolica el Retiro is a windfarm with 37 wind turbines. This company started operations in January 2014 and began 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. In the first six months of 2026, Eolica El Retiro supplied approximately 16.6% of its power output to IMMSA and Mexcobre, compared to 11.7% in the same period of 2025. ​ In 2020, the Company signed a power purchase agreement with Parque Eolico de Fenicias, S. de R.L. de C.V. (“Parque Eolico de Fenicias”), an indirect subsidiary of Grupo Mexico, located in Nuevo Leon, Mexico. This contract commits to supply 611,400 MWh of power per year to some of the Company´s Mexican operations for 20 years. This agreement started in the third quarter of 2024. In the first six months of 2026, Parque Eolico de Fenicias supplied approximately 98.0% of its power output to IMMSA, compared to 85.5% in the same period of 2025. ​ The Company sold copper starter sheets, lime and sulfuric acid to Asarco LLC. The Company´s Mexican operations received fees for transportation and administrative services that were provided to Asarco and also received fees for natural gas and services provided to MGE, a subsidiary of Grupo Mexico. In the second quarter of 2026, the price of natural gas sold to MGE experienced a significant decrease and turned negative due to market conditions, resulting in a net credit of $9.3 million. Additionally, the Company´s Mexican operations received fees for rental services provided to AMMINCO. ​ Companies with relationships to the controlling group: ​ The following table summarizes the purchase and sales activities with other Larrea family companies in the six-month periods ended June 30, 2026 and 2025 (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ ​ ​ | 2026 | ​ ​ ​ | 2025
Purchase activity | ​ | ​ | ​ | ​ | ​ | ​
Boutique Bowling de Mexico S.A. de C.V. | ​ | $ | 0.3 | ​ | $ | 0.3
Mextransport | ​ | ​ | 1.3 | ​ | ​ | 1.2
Operadora de Cinemas S.A. de C.V. | ​ | ​ | 0.2 | ​ | ​ | 0.2
Total purchases | ​ | $ | 1.8 | ​ | $ | 1.7
​ | ​ | ​ | ​ | ​ | ​ | ​
Sales activity | ​ | ​ | ​ | ​ | ​ | ​
Boutique Bowling de Mexico S.A. de C.V. | ​ | $ | 0.1 | ​ | $ | 0.1
Empresarios Industriales de Mexico, S.A. de C.V. | ​ | ​ | 0.4 | ​ | ​ | 0.2
Mextransport | ​ | ​ | 1.3 | ​ | ​ | 1.1
Operadora de Cinemas S.A. de C.V. | ​ | ​ | 0.1 | ​ | ​ | 0.1
Total sales | ​ | $ | 1.8 | ​ | $ | 1.5
​ 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. and Operadora de Cinemas, S.A. de C.V. The Company´s Mexican operations received fees from Mextransport for reimbursement of maintenance expenses for rental services and also received fees from Empresarios Industriales de Mexico S.A. de C.V. for security services. ​ Equity Investment in Affiliate: The Company has a 44.2% participation in Compañia Minera Coimolache S.A. (“Coimolache”), which it accounts for on the equity method. Coimolache owns Tantahuatay, a gold mine located in northern 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. The exploration results were not favorable; consequently, the Company is evaluating liquidating its participation in this company. ​ It is anticipated that in the future the Company will enter into similar purchase and sale transactions with these same parties.

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