Letter to the Shareholders  2004 was an outstanding year for Southern Peru Cop- per Corporation (SPCC). In addition to the substantial  rise in the price of metals produced by the Company,  SPCC’s output and sales reached unprecedented levels.  The production of copper, molybdenum, and silver in- creased 6.06%, 17.79%, and 6.0%, respectively, as  compared to 2003. Company products sold (copper,  molybdenum, silver) also increased 115%. Price hikes were outstanding during 2004 as compared  to the previous year. Average price of products was:  copper, $1.30 per pound, that is, 60% higher than in  2003; molybdenum, $16.21 per pound, a 300% in- crease; silver, $6.68 per ounce, as compared to $4.87  in 2003.  With respect to 2004 production, mined copper totaled  876 million pounds in 2004. Higher copper output at  SPCC resulted mainly from expanded production at the  Toquepala mine and higher treated volumes after pro- cessing capacity increased at the concentration plant.  The Toquepala concentration plant produced 580,111  tons of concentrate, a new production record. Further- more, Toquepala mine also produced more molybdenum:  output increased from 4,153 tons to 6,004 tons. This  SOUTHERN PERU COPPER CORPORATION 6. growth also resulted from higher mined ore grades and  recoveries in 2004. to estimates, the pre-feasibility study will continue dur- ing 2005.  Greater output at Cuajone mine in 2004 also resulted  from higher ore grades in 2004 and improved recovery  in grinding that resulted in 752,941 tons of concentrate,  also an unprecedented production level. SX/EW cop- per output decreased 12.4 million pounds due to lower  grades in the pregnant leaching solutions (PLS). The  smelter also attained a new record by smelting 1,213,030  tons of concentrate. Net income was an outstanding item in 2004: it reached  $597 million, or 400% higher than in 2003. Operating  cash cost per pound of copper decreased from $0.399  to $0.046 due mainly to high price of molybdenum, a  by-product of copper mining. At present, SPCC has mining operations in Peru, Mexico  and Chile, with beds to be explored that might increase  the Company’s reserves and future profile. SPCC also  maintained its prospecting program in all of Peru, mainly  in the south, focusing in the finding of copper and gold  resources. With respect to Los Chancas project, the drill- ing program was maintained during 2004 and, according  SPCC continued its globalization efforts during 2004. The  Board of Directors appointed a special committee to ana- lyze the proposal to acquire Minera Mexico, a subsidiary  Also in 2004, as part of the Environmental Compliance  and Management Program agreed with the government  of Peru, SPCC began to upgrade the Ilo smelter. The up- graded smelter will use Australian Isasmelt technology to  process 1.2 million tons of copper annually, with anodes  as the final product instead of the blister bars produced at  present. Sulfur capture will be of the order of 95%, well  over the standards required by environmental regulations  in force. The smelter upgrading is the largest environ- mental project undertaken by our Company in Peru, and  once it is completed, it will mean the conclusion of SPCC’s  environmental commitments in the country. Southern Peru launched major projects in 2004, such as  the one related with the Leaching Dums Project, where  conveyor belts will be replaced with haulage trucks to  transport minerals at the Toquepala mine. Construction  works are scheduled to conclude in June 2005.  of Americas Mining Corporation (AMC), the holding of  Grupo Mexico engaged in mining operations. After eight  months of comprehensive work, the Special Committee  of Disinterested Directors advised the Board to accept  the offer. The proposal was approved by a majority of  the Board and, once authorized by the relevant regulat- ing authorities, the shareholders will vote on the matter  during the first quarter of 2005. Southern Peru foresees the investment projects it carries  out will further consolidate its position among the main  producers of metals worldwide, therefore signaling a  positive economic return for our shareholders, a contri- bution for the relevant countries and their communities,  and a benefit for SPCC workers.  On behalf of Southern Peru’s Board of Directors, we want  to express our gratitude to the workers and employees  for their effort and dedication, to our clients for their  trust and loyalty, and to you, our shareholders, for your  long-term support. SOUTHERN PERU COPPER CORPORATION 7. OSCAR GONZÁLEZ ROCHA President and Chief Executive Officer GERMÁN LARREA MOTA-VELASCO Chairman of the Board