Somebody forgot to tell copper that commodity markets were supposed to be weak right now, and that same somebody forgot to tell Southern Copper (SCCO 4.58%) that related equities were supposed to be in the doldrums.

The miner's powerful third-quarter-earnings report, which we'll discuss in a moment, unlocks the secrets of Southern Copper's success. But that success certainly begins with copper's continued resilience.

Compared to most other segments of the commodity market, copper's impressive price resilience over the trailing year has been something to behold! Compared with much sharper declines from iron ore, molybdenum, zinc, lead, and a host of key industrial feedstocks, copper's modest 14% price decline represents a clear anomaly and a reflection of the red metal's solid market fundamentals. Accordingly, Teck Resources' (TECK 1.70%) copper unit effectively defended that miner's bottom line in the third quarter from the more heavily affected markets for metallurgical coal and zinc. In fact, even in the face of China's unmistakable deceleration over the period, Southern Copper points out that "copper inventories have decreased 34.4%" over the trailing twelve months.

But copper's relative strength alone can't explain Southern Copper's monumental outperformance of its peers over the same period. The following one-year chart reveals the glaring divide between Southern Copper's nearly 28% advance versus an 8% decline for the benchmark First Trust ISE Global Copper Index Fund (NASDAQ: CU).

SCCO data provided by YCharts.

That outperformance clearly resulted from a combination of sheer operational excellence along with the investor-friendly windfall of a $2.1 billion legal reward. Southern Copper confronted copper's 14% price decline with an 11.2% increase in production volume over the first nine months of 2012 that limited the dip in net sales to just 2.5% year-to-date. On the strength of its peer-leading cost structure, the company maintained a robust EBITDA margin of 57.3%, and a gorgeous net margin of 34% after accounting for one-time charges! Some of that income came quite easily, like the $38.2 million collected year-to-date from the Tantahuatay joint venture operated by Buenaventura (NYSE: BVN).

Southern Copper's cash cost, net of by-product credits, stands at $0.65 per pound year-to-date. Rival Freeport-McMoRan Copper & Gold (FCX 2.23%) will record a far higher cost of about $1.50 per pound for 2012, reflecting a challenging year at its flagship Grasberg mine.

And now for the windfall. Southern Copper shareholders will receive a lustrous dividend of $2.75 per share on Nov. 21, continuing the company's outstanding dividend record. This dividend represents 100% of third-quarter net income, plus the $2.1 billion cash reward granted by a Delaware court in a case relating to a 2005 merger.

With the industry's fattest cash margins, friendly dividend policies, and a massive trove of copper reserves that's more than twice as vast as that of BHP Billiton (BHP -1.36%), it's easy to understand why Southern Copper remains a popular favorite with a four-star rating at Motley Fool CAPS. I have added the stock to My Watchlist, and invite investors to follow my ongoing coverage of this and other copper producers by bookmarking my article list or following me on Twitter.