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Mining concessions, development costs, property, plant and equipment, net | 12 Months Ended
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Dec. 31, 2017
Disclosure of detailed information about property, plant and equipment [line items] |
Disclosure of property, plant and equipment [text block] |
11. | Mining concessions, development costs, property, plant and equipment, net
| (a) | Below is presented the movement in cost:
|  | Balance as of January 1, 2016 |  | Additions |  | Disposals |  | Sales |  | Reclassifications of assets held for sale |  | Reclassifications and transfers |  | Balance as of December 31, 2016 |  | Additions |  | Disposals |  | Sales |  | Reclassifications and transfers |  | Balance as of December 31, 2017 |
|  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  |  |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lands |  |  | 22,454 |  |  | 162 |  |  | - |  |  | (6) |  |  | 78 |  |  | 270 |  |  | 22,958 |  |  | - |  |  | - |  |  | - |  |  | (268) |  |  | 22,690 |
Mining concessions |  |  | 198,009 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 198,009 |  |  | 2 |  |  | - |  |  | (15,000) |  |  | (31,138) |  |  | 151,873 |
Development costs |  |  | 541,763 |  |  | 82,865 |  |  | - |  |  | - |  |  | 31,192 |  |  | (3,428) |  |  | 652,392 |  |  | 69,335 |  |  | - |  |  | (10,107) |  |  | 431 |  |  | 712,051 |
Buildings, constructions and other |  |  | 1,018,956 |  |  | 581 |  |  | - |  |  | (20) |  |  | 10,458 |  |  | 79,192 |  |  | 1,109,167 |  |  | 835 |  |  | (387) |  |  | (28,751) |  |  | 198,387 |  |  | 1,279,251 |
Machinery and equipment |  |  | 827,225 |  |  | 46,152 |  |  | (6,569) |  |  | (2,844) |  |  | 9,425 |  |  | 112,643 |  |  | 986,032 |  |  | 2,579 |  |  | (3,749) |  |  | (50,097) |  |  | (5,742) |  |  | 929,023 |
Transportation units |  |  | 10,649 |  |  | 174 |  |  | (341) |  |  | (396) |  |  | 357 |  |  | (27) |  |  | 10,416 |  |  | 11 |  |  | (190) |  |  | (1,079) |  |  | 788 |  |  | 9,946 |
Furniture and fixtures |  |  | 13,429 |  |  | 89 |  |  | (61) |  |  | (88) |  |  | 359 |  |  | 319 |  |  | 14,047 |  |  | 31 |  |  | (157) |  |  | (487) |  |  | 468 |  |  | 13,902 |
Units in transit |  |  | 26,291 |  |  | 15,797 |  |  | - |  |  | - |  |  | - |  |  | (12,037) |  |  | 30,051 |  |  | 2,822 |  |  | - |  |  | - |  |  | (28,124) |  |  | 4,749 |
Work in progress |  |  | 68,123 |  |  | 210,915 |  |  | (352) |  |  | - |  |  | 1,037 |  |  | (173,935) |  |  | 105,788 |  |  | 173,333 |  |  | - |  |  | (190) |  |  | (177,809) |  |  | 101,122 |
Stripping activity asset (e) |  |  | 106,838 |  |  | 17,631 |  |  | - |  |  | - |  |  | - |  |  | (2) |  |  | 124,467 |  |  | 18,282 |  |  | (13,573) |  |  | - |  |  | 1,271 |  |  | 130,447 |
Mine closure costs |  |  | 187,603 |  |  | 34,532 |  |  | - |  |  | - |  |  | 25,754 |  |  | - |  |  | 247,889 |  |  | 10,594 |  |  | - |  |  | (17,195) |  |  | - |  |  | 241,288 |
|  |  | 3,021,340 |  |  | 408,898 |  |  | (7,323) |  |  | (3,354) |  |  | 78,660 |  |  | 2,995 |  |  | 3,501,216 |  |  | 277,824 |  |  | (18,056) |  |  | (122,906) |  |  | (41,736) |  |  | 3,596,342 |
Accumulated depreciation and amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mining concessions |  |  | 77,450 |  |  | 16 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 77,466 |  |  | 8 |  |  | - |  |  | (13,845) |  |  | (23,390) |  |  | 40,239 |
Development costs |  |  | 199,211 |  |  | 18,225 |  |  | - |  |  | - |  |  | 25,596 |  |  | (1,396) |  |  | 241,636 |  |  | 30,886 |  |  | - |  |  | (7,910) |  |  | (241) |  |  | 264,371 |
Buildings, construction and other |  |  | 381,441 |  |  | 65,050 |  |  | - |  |  | (9) |  |  | 8,598 |  |  | 598 |  |  | 455,678 |  |  | 73,314 |  |  | (115) |  |  | (28,208) |  |  | 6,168 |  |  | 506,837 |
Machinery and equipment |  |  | 475,941 |  |  | 81,753 |  |  | (5,378) |  |  | (827) |  |  | 6,640 |  |  | (68) |  |  | 558,061 |  |  | 74,744 |  |  | (2,662) |  |  | (41,595) |  |  | (6,099) |  |  | 582,449 |
Transportation units |  |  | 7,932 |  |  | 1,103 |  |  | (250) |  |  | (365) |  |  | 358 |  |  | 14 |  |  | 8,792 |  |  | 837 |  |  | (114) |  |  | (1,057) |  |  | (68) |  |  | 8,390 |
Furniture and fixtures |  |  | 7,577 |  |  | 1,156 |  |  | (60) |  |  | (22) |  |  | 319 |  |  | 202 |  |  | 9,172 |  |  | 1,109 |  |  | (152) |  |  | (236) |  |  | (13) |  |  | 9,880 |
Stripping activity asset |  |  | 12,916 |  |  | 5,813 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 18,729 |  |  | 16,343 |  |  | - |  |  | - |  |  | 6,623 |  |  | 41,695 |
Mine closure costs |  |  | 99,993 |  |  | 22,417 |  |  | - |  |  | - |  |  | 19,335 |  |  | (470) |  |  | 141,275 |  |  | 25,254 |  |  | - |  |  | (8,408) |  |  | - |  |  | 158,121 |
|  |  | 1,262,461 |  |  | 195,533 |  |  | (5,688) |  |  | (1,223) |  |  | 60,846 |  |  | (1,120) |  |  | 1,510,809 |  |  | 222,495 |  |  | (3,043) |  |  | (101,259) |  |  | (17,020) |  |  | 1,611,982 |
Provision for impairment of long-lived assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mine closure costs |  |  | 4,080 |  |  | - |  |  | - |  |  | - |  |  | 6,910 |  |  | - |  |  | 10,990 |  |  | 17,916 |  |  | - |  |  | (8,785) |  |  | - |  |  | 20,121 |
Development costs |  |  | 3,803 |  |  | - |  |  | - |  |  | - |  |  | 5,684 |  |  | - |  |  | 9,487 |  |  | 2,864 |  |  | - |  |  | (2,198) |  |  | - |  |  | 10,153 |
Mining concessions, development costs, property, plant and other |  |  | 3,372 |  |  | - |  |  | - |  |  | - |  |  | 6,533 |  |  | - |  |  | 9,905 |  |  | 840 |  |  | - |  |  | (6,214) |  |  | - |  |  | 4,531 |
|  |  | 11,255 |  |  | - |  |  | - |  |  | - |  |  | 19,127 |  |  | - |  |  | 30,382 |  |  | 21,620 |  |  | - |  |  | (17,197) |  |  | - |  |  | 34,805 |
Net cost |  |  | 1,747,624 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,960,025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,949,555 |
| (b) | Impairment of long-lived assets
In accordance with its accounting policies and processes, each asset or CGU is evaluated annually at year end, to determine whether there are any indications of impairment. If any such indications of impairment exist, a formal estimate of the recoverable amount is performed. In assessing whether impairment is required, the carrying value of the asset or CGU is compared with its recoverable amount. The recoverable amount is the higher of the CGU’s fair value less costs of disposal (FVLCD) and value in use (VIU). Given the nature of the Group’s activities, information on the fair value of an asset is usually difficult to obtain unless negotiations with potential purchasers or similar transactions are taking place. Consequently, the recoverable amount for each CGU is estimated based on discounted future estimated cash flows expected to be generated from the continued use of the CGUs using market based commodity price and exchange assumptions, estimated quantities of recoverable minerals, production levels, operating costs and capital requirements, and its eventual disposal, based on the latest life of mine (LOM) plans. These cash flows were discounted using a real pre-tax discount rate that reflected current market assessments of the time value of money and the risks specific to the CGU. The estimates of quantities of recoverable minerals, production levels, operating costs and capital requirements are obtained from the planning process, including the LOM plans, one-year budgets and CGU-specific studies. During 2017, the subsidiary La Zanja recorded an impairment loss related to its mining property for US$21,620,000. The principal factor in the impairment loss was the depletion of its reserves. As a result of the sale of the mining units of Breapampa and Recuperada, as well as the sale of the assets of the Shila Paula mining unit, the Group recorded in 2017 a reversal of impairment losses by US$7.4 million, US$7.1 million and US$2.7 million, respectively, see note 1(e). During 2016, the Group recorded an impairment loss with respect to its Shila-Paula mining unit for US$2,043,000. As a result of the recoverable amount analysis performed as of December 31, 2015, the Group recognized impairment losses for its mining units La Zanja by US$3,803,000 and Breapampa by US$7,452,000. Key assumptions The determination of value in use is most sensitive to the following key assumptions:
| - | Production volumes
| - | Commodity prices
| - | Discount rate
Production volumes: Estimated production volumes are based on detailed life-of-mine plans and take into account development plans for the mines agreed by management as part of planning process. Production volumes are dependent on a number of variables, such as: the recoverable quantities; the production profile; the cost of the development of the infrastructure necessary to extract the reserves; the production costs; the contractual duration of mining rights; and the selling price of the commodities extracted. As each producing mining unit has specific reserve characteristics and economic circumstances, the cash flows of the mines are computed using appropriate individual economic models and key assumptions established by management. The production profiles used were consistent with the reserves and resource volumes approved as part of the Group’s process for the estimation of proved and probable reserves and resource estimates. Commodity prices: Forecast commodity prices are based on management’s estimates and are derived from forward price curves and long-term views of global supply and demand, building on past experience of the industry and consistent with external sources. These prices were adjusted to arrive at appropriate consistent price assumptions for the different qualities and type of commodities, or, where appropriate, contracted prices were applied. These prices are reviewed at least annually. Estimates prices for the current and long-term periods that have been used to estimate future cash flows are as follows:
|  | 2018 |  |  | 2019 - 2022 |  |
|  | US$ |  |  | US$ |  |
Gold |  |  | 1,300.00 | /Oz |  |  | 1,300.00 | /Oz |
Silver |  |  | 17.00 | /Oz |  |  | 18.00 | /Oz |
Copper |  |  | 6,000.00 | /MT |  |  | 6,000.00 | /MT |
Lead |  |  | 2,250.00 | /MT |  |  | 2,250.00 | /MT |
Zinc |  |  | 2,750.00 | /MT |  |  | 2,600.00 | /MT |
Discount rate: In calculating the value in use, pre-tax discount rates of 8.33%, 9.30% and 5.89% were applied to the pre-tax cash flows of Buenaventura, El Brocal and La Zanja, respectively. These discount rates are derived from the Group’s post-tax weighted average cost of capital (WACC), with appropriate adjustments made to reflect the risks specific to the CGU. The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group’s investors. The cost of debt is based on its interest bearing borrowings the Group is obliged to service. The beta factors are evaluated annually based on publicly available market data.
| (c) | The book value of assets held under finance leases, and assets under trustworthy equity, amounted to US$522.0 million as of December 31, 2017 (US$524.6 million as of December 31, 2016) and is presented in various items of property, plant and equipment. During the year 2017 and 2016 no acquisitions of assets under lease agreements were made. Leased assets are pledged as security for the related finance lease liabilities.
| (d) | The amount of capitalized finance costs during the year 2017 was US$6.3 million (US$7.5 million during the year 2016) and is presented under investing activities in the consolidated statements of cash flows. The average rate used to determine the financial cost to be capitalized was 4.19 percent (3.52 percent during the year 2016).
| (e) | In mid-2016, a landslide occurred in the west wall of the Tajo Norte; consequently, it was decided not to mine this area due to stability and operational design issues. According to the distribution of reserves, this area (Phase 10) contained 5.5 MT of ore and 9.2 MT of waste valued at US$13,573,000, which were withdrawn from the reserves.
Minera Yanacocha SRL and subsidiary [Member] |
Disclosure of detailed information about property, plant and equipment [line items] |
Disclosure of property, plant and equipment [text block] |
10. | Property, plant and equipment, net
| (a) | Below is presented the movement in cost:
|  | Opening |  |  |  |  |  |  | Final |
|  | balance |  | Additions |  | Sales and disposals |  | Transfer/Other changes | balances |
|  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) | US$(000) |
Year 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  |  | 9,459 |  |  | - |  |  | - |  |  | - |  | 9,459 |
Land improvements |  |  | 36,454 |  |  | - |  |  | - |  |  | - |  | 36,454 |
Building and constructions |  |  | 236,551 |  |  | - |  |  | (42) |  |  | 61,289 |  | 297,798 |
Machinery and equipment |  |  | 379,164 |  |  | - |  |  | (92,299) |  |  | - |  | 286,865 |
Leach pads |  |  | 1,670,835 |  |  | - |  |  | - |  |  | 51,951 |  | 1,722,786 |
Vehicles |  |  | 11,024 |  |  | - |  |  | - |  |  | - |  | 11,024 |
Furniture and fixtures |  |  | 2,556 |  |  | - |  |  | - |  |  | - |  | 2,556 |
Other equipment |  |  | 57,773 |  |  | - |  |  | - |  |  | - |  | 57,773 |
Work in progress |  |  | 483,225 |  |  | 51,624 |  |  | - |  |  | (134,439) |  | 400,410 |
Mining rights |  |  | 37,521 |  |  | - |  |  | - |  |  | - |  | 37,521 |
Asset retirement and mine closure |  |  | 409,797 |  |  | 97,326 |  |  | - |  |  | - |  | 507,123 |
Stripping activity asset |  |  | 148,487 |  |  | - |  |  | - |  |  | - |  | 148,487 |
Mine development |  |  | 701,156 |  |  | - |  |  | - |  |  | 21,199 |  | 722,355 |
|  |  | 4,184,002 |  |  | 148,950 |  |  | (92,341) |  |  | - |  | 4,240,611 |
Accumulated depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land improvements |  |  | 35,053 |  |  | 90 |  |  | - |  |  | - |  | 35,143 |
Building and constructions |  |  | 235,340 |  |  | 5,020 |  |  | (12) |  |  | - |  | 240,348 |
Machinery and equipment |  |  | 329,965 |  |  | 8,431 |  |  | (88,421) |  |  | - |  | 249,975 |
Leach pads |  |  | 1,588,205 |  |  | 33,061 |  |  | - |  |  | - |  | 1,621,266 |
Vehicles |  |  | 11,003 |  |  | 21 |  |  | - |  |  | - |  | 11,024 |
Furniture and fixtures |  |  | 2,556 |  |  | - |  |  | - |  |  | - |  | 2,556 |
Other equipment |  |  | 55,645 |  |  | 269 |  |  | - |  |  | - |  | 55,914 |
Mining rights |  |  | 29,457 |  |  | - |  |  | - |  |  | - |  | 29,457 |
Asset retirement and mine closure |  |  | 337,173 |  |  | 19,172 |  |  | - |  |  | - |  | 356,345 |
Stripping activity asset |  |  | 142,170 |  |  | 1,082 |  |  | - |  |  | - |  | 143,252 |
Mine development |  |  | 622,604 |  |  | 16,846 |  |  | - |  |  | - |  | 639,450 |
|  |  | 3,389,171 |  |  | 83,992 |  |  | (88,433) |  |  | - |  | 3,384,730 |
Net cost |  |  | 794,831 |  |  |  |  |  |  |  |  |  |  | 855,881 |
|  | Opening |  |  |  |  |  | Transfer/Other |  | Impairment |  | Final |
|  | balance |  | Additions |  | Sales and disposals |  | changes |  | loss |  | balances |
|  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |
Year 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  |  | 11,521 |  |  | - |  |  | - |  |  | 201 |  |  | (2,263) |  |  | 9,459 |
Land improvements |  |  | 41,909 |  |  | - |  |  | - |  |  |  |  |  | (5,455) |  |  | 36,454 |
Building and constructions |  |  | 274,262 |  |  | - |  |  | (26,410) |  |  | 26,396 |  |  | (37,697) |  |  | 236,551 |
Machinery and equipment |  |  | 511,942 |  |  | - |  |  | (125,064) |  |  | 22,865 |  |  | (30,579) |  |  | 379,164 |
Leach pads |  |  | 1,890,823 |  |  | - |  |  |  |  |  | 15,276 |  |  | (235,264) |  |  | 1,670,835 |
Vehicles |  |  | 15,198 |  |  | - |  |  | (4,168) |  |  |  |  |  | (6) |  |  | 11,024 |
Furniture and fixtures |  |  | 2,556 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 2,556 |
Other equipment |  |  | 60,462 |  |  | 353 |  |  | - |  |  | 217 |  |  | (3,259) |  |  | 57,773 |
Work in progress |  |  | 476,353 |  |  | 78,609 |  |  | - |  |  | (70,282) |  |  | (1,455) |  |  | 483,225 |
Mining rights |  |  | 49,544 |  |  | - |  |  | (3,113) |  |  |  |  |  | (8,910) |  |  | 37,521 |
Asset retirement and mine closure |  |  | 452,145 |  |  | 351,798 |  |  | - |  |  |  |  |  | (394,146) |  |  | 409,797 |
Stripping activity asset |  |  | 157,048 |  |  | 26,148 |  |  | - |  |  |  |  |  | (34,709) |  |  | 148,487 |
Mine development |  |  | 814,563 |  |  | - |  |  | - |  |  | 5,079 |  |  | (118,486) |  |  | 701,156 |
|  |  | 4,758,326 |  |  | 456,908 |  |  | (158,755) |  |  | (248) |  |  | (872,229) |  |  | 4,184,002 |
Accumulated depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land improvements |  |  | 35,266 |  |  | 298 |  |  | - |  |  | (511) |  |  | - |  |  | 35,053 |
Building and constructions |  |  | 196,515 |  |  | 61,530 |  |  | (22,705) |  |  | - |  |  | - |  |  | 235,340 |
Machinery and equipment |  |  | 429,910 |  |  | 12,230 |  |  | (112,175) |  |  | - |  |  | - |  |  | 329,965 |
Leach pads |  |  | 1,565,508 |  |  | 22,697 |  |  | - |  |  | - |  |  | - |  |  | 1,588,205 |
Vehicles |  |  | 14,620 |  |  | 2,735 |  |  | (6,352) |  |  | - |  |  | - |  |  | 11,003 |
Furniture and fixtures |  |  | 2,547 |  |  | 9 |  |  | - |  |  | - |  |  | - |  |  | 2,556 |
Other equipment |  |  | 53,964 |  |  | 1,681 |  |  | - |  |  | - |  |  | - |  |  | 55,645 |
Mining rights |  |  | 29,457 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 29,457 |
Asset retirement and mine closure |  |  | 318,405 |  |  | 18,768 |  |  | - |  |  | - |  |  | - |  |  | 337,173 |
Stripping activity asset |  |  | 138,178 |  |  | 3,992 |  |  | - |  |  | - |  |  | - |  |  | 142,170 |
Mine development |  |  | 613,646 |  |  | 8,447 |  |  | - |  |  | 511 |  |  | - |  |  | 622,604 |
|  |  | 3,398,016 |  |  | 132,387 |  |  | (141,232) |  |  | - |  |  | - |  |  | 3,389,171 |
Net cost |  |  | 1,360,310 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 794,831 |
Additions to work in progress in 2017 are primarily related to the Water treatment project and Yanacocha Laybacks Checkpoint 2A and Asset Componentization project. The depreciation and amortization expense for the year ended December 31, 2017 was recorded as Cost applicable to sales in the statement of comprehensive income.
| (b) | Impairment of long-lived assets -
In accordance with its accounting policies and processes, each asset or Cash Generating Unit “CGU” is evaluated annually at year end, to determine whether there are any indications of impairment. If any such indications of impairment exist, a formal estimate of the recoverable amount is performed. The Company has two CGU: Yanacocha mine and Conga project. In December 2017, the Company performed a formal evaluation of its cash generating units and concluded that there were no impairment indicators at December 31, 2017. In December 2016, the Company determined that an impairment indicator existed as a result of the updated long-term mining and closure plans and the related increases in estimated future closure costs that resulted in the increase to the asset retirement cost asset. As a result of the recoverable amount analysis performed during 2016, the Company recorded an impairment loss related to Yanacocha mine of US$889.5 million (US$872.2 million and US$17.3 million related to property, plant and equipment and intangible assets, respectively). In assessing whether impairment was required, the carrying value of the asset or CGU was compared with its recoverable amount. The recoverable amount is the higher of the CGU’s fair value less costs of disposal (FVLCD) and value in use (VIU). Given the nature of the Company’s activities, information on the fair value of an asset is usually difficult to obtain unless negotiations with potential purchasers or similar transactions are taking place. Consequently, the recoverable amount for each CGU was estimated based on estimated discounted future estimated cash flows expected to be generated from the continued use of the CGUs using market based commodity price and exchange assumptions, estimated quantities of recoverable minerals, production levels, operating costs and capital requirements, and its eventual disposal, based on the latest life of mine (LOM) plans. These cash flows were discounted using a real pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU. Estimates included quantities of recoverable minerals, production levels, operating costs and capital requirements and sourced from out planning process, including the LOM plans, one-year budgets and CGU-specific studies. Key assumptions used for the impairment testing as of December 31, 2016: The determination of value in use was most sensitive to the following key assumptions:
| - | Production volumes
| - | Commodity prices
| - | Discount rate
Production volumes: Estimated production volumes are based on detailed life-of-mine plans and take into account development plans for the mines agreed by management as part of planning process. Production volumes are dependent on a number of variables, such as: the recoverable quantities; the production profile; the cost of the development of the infrastructure necessary to extract the reserves; the production costs; the contractual duration of mining rights; and the selling price of the commodities extracted. As each producing mining unit has specific reserve characteristics and economic circumstances, the cash flows of the mines were computed using appropriate individual economic models and key assumptions established by management. The production profiles used were consistent with the reserves and resource volumes approved as part of the Company’s process for the estimation of proved and probable reserves and resource estimates. Commodity prices: Forecasted commodity prices were based on management’s estimates and were derived from forward price curves and long-term views of global supply and demand, building on past experience of the industry and consistent with external sources. These prices were adjusted to arrive at appropriate consistent price assumptions for the different qualities and type of commodities, or, where appropriate, contracted prices were applied. Estimated prices for the current and long-term periods that have were used to estimate future revenues were as follows:
|  | Current |  | Long-term |
|  | US$ |  | US$ |
Gold (per ounce) |  |  | 1,221 |  |  | 1,300 |
Discount rate: In calculating the value in use, a pre-tax discount rate of 7.1% was applied to the pre-tax cash flows. This discount rate was derived from the Company’s post-tax weighted average cost of capital (WACC), with appropriate adjustments made to reflect the risks specific to the CGU.
Sociedad Minera Cerro Verde S.A.A. [Member] |
Disclosure of detailed information about property, plant and equipment [line items] |
Disclosure of property, plant and equipment [text block] |
8. | Property, plant and equipment, net
The changes in cost and accumulated depreciation accounts as of December 31, 2017 are shown below:
|  | January 1, |  |  |  |  |  |  |  |  |  | December 31, |  |  |  |  |  |  |  |  |  | December 31, |
|  | 2016 |  | Additions |  | Adjustments |  | Disposals |  | Transfers |  | 2016 |  | Additions |  | Adjustments |  | Disposals |  | Transfers |  | 2017 |
|  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |  | US$(000) |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  |  | 20,384 |  |  | - |  |  | - |  |  | - |  |  | 3,299 |  |  | 23,683 |  |  | - |  |  | - |  |  | - |  |  | 784 |  |  | 24,467 |
Buildings and other constructions |  |  | 2,202,122 |  |  | - |  |  | (11,114) |  |  | (5,633) |  |  | 191,586 |  |  | 2,376,961 |  |  | - |  |  | (13,532) |  |  | (1,169) |  |  | 7,782 |  |  | 2,370,042 |
Machinery and equipment |  |  | 4,203,431 |  |  | - |  |  | 11,114 |  |  | (4,427) |  |  | 232,062 |  |  | 4,442,180 |  |  | - |  |  | 13,532 |  |  | (4,540) |  |  | 102,336 |  |  | 4,553,508 |
Transportation units |  |  | 19,627 |  |  | - |  |  | - |  |  | (730) |  |  | 213 |  |  | 19,110 |  |  | - |  |  | - |  |  | (261) |  |  | 1,708 |  |  | 20,557 |
Furniture and fixtures |  |  | 950 |  |  | - |  |  | - |  |  | (1) |  |  | - |  |  | 949 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 949 |
Other equipment |  |  | 24,728 |  |  | - |  |  | - |  |  | (1,065) |  |  | 1,008 |  |  | 24,671 |  |  | - |  |  | - |  |  | (34) |  |  | 340 |  |  | 24,977 |
Construction in progress and in-transit units |  |  | 362,058 |  |  | 154,876 |  |  | - |  |  | - |  |  | (428,168) |  |  | 88,766 |  |  | 173,845 |  |  | - |  |  | - |  |  | (112,950) |  |  | 149,661 | (a)
Stripping activity asset (see Note 2(j)) |  |  | 263,498 |  |  | 61,261 |  |  | - |  |  | - |  |  | - |  |  | 324,759 |  |  | 153,623 |  |  | - |  |  | - |  |  | - |  |  | 478,382 |
Asset retirement costs (see Note 12(b) |  |  | 149,724 |  |  | 3,743 |  |  | (16,091) |  |  | - |  |  | - |  |  | 137,376 |  |  | 2,661 |  |  | (3,710) |  |  | - |  |  | - |  |  | 136,327 |
|  |  | 7,246,522 |  |  | 219,880 |  |  | (16,091) |  |  | (11,856) |  |  | - |  |  | 7,438,455 |  |  | 330,129 |  |  | (3,710) |  |  | (6,004) |  |  | - |  |  | 7,758,870 |
Accumulated depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Buildings and other constructions |  |  | 60,903 |  |  | 88,925 |  |  | (30) |  |  | (4,936) |  |  | - |  |  | 144,862 |  |  | 86,391 |  |  | (457) |  |  | (1,169) |  |  | - |  |  | 229,627 |
Machinery and equipment |  |  | 966,525 |  |  | 275,388 |  |  | 30 |  |  | (3,964) |  |  | - |  |  | 1,237,979 |  |  | 283,250 |  |  | 457 |  |  | (4,349) |  |  | - |  |  | 1,517,337 |
Transportation units |  |  | 9,723 |  |  | 1,828 |  |  | - |  |  | (686) |  |  | - |  |  | 10,865 |  |  | 1,593 |  |  | - |  |  | (237) |  |  | - |  |  | 12,221 |
Furniture and fixtures |  |  | 777 |  |  | 26 |  |  | - |  |  | (1) |  |  | - |  |  | 802 |  |  | 32 |  |  | - |  |  | - |  |  | - |  |  | 834 |
Other equipment |  |  | 12,582 |  |  | 2,423 |  |  | - |  |  | (1,052) |  |  | - |  |  | 13,953 |  |  | 2,474 |  |  | - |  |  | (27) |  |  | - |  |  | 16,400 |
Stripping activity asset |  |  | 111,552 |  |  | 97,513 |  |  | - |  |  | - |  |  | - |  |  | 209,065 |  |  | 76,262 |  |  | - |  |  | - |  |  | - |  |  | 285,327 |
Asset retirement costs |  |  | 7,171 |  |  | 6,018 |  |  | - |  |  | - |  |  | - |  |  | 13,189 |  |  | 5,511 |  |  | - |  |  | - |  |  | - |  |  | 18,700 |
|  |  | 1,169,233 |  |  | 472,121 |  |  | - |  |  | (10,639) |  |  | - |  |  | 1,630,715 |  |  | 455,513 |  |  | - |  |  | (5,782) |  |  | - |  |  | 2,080,446 |
Net cost |  |  | 6,077,289 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,807,740 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,678,424 |
(a) | As of December 31, 2017 construction in progress relates to the tailing cyclone relocation (US$47.5 million), mine maintenance truck shop (US$38.4 million) and the purchase of used Komatsu 930E haul trucks from PT Freeport Indonesia (related party) (US$17.1 million).

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