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Derivative financial instruments | 12 Months Ended
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Dec. 31, 2017
Disclosure Of Embedded derivatives [Line Items] |
Disclosure of derivative financial instruments [text block] |
31. | Derivative financial instruments
Hedge derivative financial instruments -
| (a) | The volatility of copper prices during the last years has caused the Management of the subsidiary El Brocal to enter into future contracts which are recorded under cash flow accounting, see note 2.4(v). These contracts managed during 2017 are intended to reduce the volatility of the cash flows attributable to the fluctuations in the cooper price, from January to December 2018, in accordance with existing copper concentrate sales commitments, which are related to 50 percent of the annual production of copper according to the risk strategy approved by the Board of Directors of this subsidiary.
The counterpart fair value as of December 31, 2017, net of deferred income tax, amounts to a liability balance of US$19,602,000 (US$2,723,000 as of December 31, 2016), and it is shown in the caption "Other reserves of equity". The table below presents the composition of open transactions included in the hedge derivative financial instruments as of December 31, 2017:
|  |  |  |  | Quotations |  |  |
Period of settlement |  | MT |  | Fixed |  | Futures |  | Fair value |
|  |  |  |  |  |  |  |  | US$(000) |
January 2018 |  |  | 3,000 |  | 5,972 – 6,050 |  |  | 7,275 |  |  | (3,788) |
February 2018 |  |  | 3,000 |  | 5,972 – 6,050 |  |  | 7,260 |  |  | (3,736) |
March 2018 |  |  | 3,000 |  | 5,972 – 6,050 |  |  | 7,247 |  |  | (3,693) |
April 2018 |  |  | 3,000 |  | 5,805 – 6,050 |  |  | 7,259 |  |  | (3,973) |
May 2018 |  |  | 3,000 |  | 5,900 – 6,300 |  |  | 7,269 |  |  | (3,484) |
June 2018 |  |  | 3,000 |  | 5,900 – 6,325 |  |  | 7,277 |  |  | (3,468) |
July 2018 |  |  | 3,000 |  | 5,960 - 6,350 |  |  | 7,285 |  |  | (3,359) |
August 2018 |  |  | 3,000 |  | 6,520 |  |  | 7,290 |  |  | (2,288) |
September 2018 |  |  | 3,000 |  | 7,100 |  |  | 7,296 |  |  | (580) |
October 2018 |  |  | 3,000 |  | 7,200 |  |  | 7,300 |  |  | (296) |
November 2018 |  |  | 3,000 |  | 7,300 |  |  | 7,305 |  |  | (13) |
December 2018 |  |  | 3,000 |  | 7,300 |  |  | 7,309 |  |  | (27) |
|  |  | 36,000 |  |  |  |  |  |  |  | (28,705) |
The table below presents the composition of open transactions included in the hedge derivative financial instruments as of December 31, 2016:
|  |  |  |  | Quotations |  |  |  |
Period of settlement |  | MT |  | Fixed |  | Futures |  | Fair value |
|  |  |  |  |  |  |  |  |  |  | US$(000) |
January 2017 |  |  | 2,542 |  |  | 4,917 |  |  | 5,526 |  |  | (1,548) |
February 2017 |  |  | 2,270 |  |  | 5,001 |  |  | 5,530 |  |  | (1,199) |
March 2017 |  |  | 1,795 |  |  | 4,860 |  |  | 5,535 |  |  | (1,208) |
April 2017 |  |  | 500 |  |  | 5,720 |  |  | 5,536 |  |  | 92 |
|  |  | 7,107 |  |  |  |  |  |  |  |  | (3,863) |
| (b) | Embedded derivative of commercial contracts -
The Group’s sales of concentrates are based on commercial contracts, under which a provisional sales value is determined based on future quotations (forward). The adjustment to sales is considered an embedded derivative, which is required to be separated from the host contract. Commercial contracts are linked to market prices (London Metal Exchange) at the dates of the expected settlements of the open positions as of December 31, 2017 and 2016. The embedded derivative does not qualify for hedge accounting; therefore, changes in the fair value are recorded as an adjustment to net sales. Embedded derivatives held by the Group as of December 31, 2017 are:
|  |  |  |  |  | Quotations |  |  |  |
Metal |  | Quantity |  | Period of quotations |  | Provisional |  | Future |  | Fair value |
|  |  |  | 2018 |  | US$ |  | US$ |  | US$(000) |
Copper |  | 24,846 DMT |  | January – March |  | 6,645.36 – 6,841.95 |  | 7,112.50 – 7,275.00 |  |  | 2,508 |
Gold |  | 64,898 DMT |  | January – March |  | 1,256.45 – 1,317.67 |  | 1,258.00 – 1,317.10 |  |  | 1,066 |
Silver |  | 326,095 Oz |  | January – April |  | 16.02 – 18.00 |  | 16.07 – 17.21 |  |  | 1,815 |
Lead |  | 22,735 DMT |  | January – April |  | 2,333.23 – 3,110.69 |  | 2,488 – 2,579.75 |  |  | 229 |
Zinc |  | 54,603 DMT |  | January – April |  | 3,103.72 – 3,275.47 |  | 3,226.50 – 3,343.50 |  |  | 1,806 |
Total asset, net |  |  |  |  |  |  |  |  |  |  | 7,424 |
Embedded derivatives held by the Group as of December 31, 2016 are:
|  |  |  |  |  | Quotations |  |  |  |
Metal |  | Quantity |  | Period of quotations |  | Provisional |  | Future |  | Fair value |
|  |  |  | 2017 |  | US$ |  | US$ |  | US$(000) |
Copper |  | 29,121 DMT |  | January - April |  | 2,985.28 – 5,824.00 |  | 5,535.76 – 5,642.25 |  |  | 397 |
Gold |  | 15,370 DMT |  | January – February |  | 1,139.75 – 1,145.90 |  | 1,151.00 – 1,179.40 |  |  | 481 |
Silver |  | 17,124 Oz |  | January - April |  | 16.32 – 19.35 |  | 16.42 – 16.66 |  |  | (1,825) |
Lead |  | 23,636 DMT |  | January - April |  | 1,871.58 – 2,380.60 |  | 2,017.00 – 2,080.00 |  |  | (801) |
Zinc |  | 29,407 DMT |  | January – March |  | 2,291.08 – 2,732.10 |  | 2,578.00 – 2,612.50 |  |  | (172) |
Other |  | 15,082 Oz |  |  |  |  |  |  |  |  | 396 |
Total liability, net |  |  |  |  |  |  |  |  |  |  | (1,524) |
Sociedad Minera Cerro Verde S.A.A. [Member] |
Disclosure Of Embedded derivatives [Line Items] |
Disclosure of derivative financial instruments [text block] |
22. | Embedded derivatives
As discussed in Note 2(d), the Company’s sales create exposure to changes in the market prices of copper and molybdenum which are considered embedded derivatives. As of December 31, 2017 and 2016, information about the Company’s embedded derivatives is as follows:
|  |  |  |  |  | As of December 31, 2017 |
|  | Pounds |  |  |  |  |  |  |  |  |  |  |
|  | payable |  | Maturity |  | Provisional pricing |  |  | Forward pricing |  |  | Fair value provision |
|  | (000) |  |  |  | US$ |  |  | US$ |  |  | US$(000) |
Copper Concentrate |  | 252,830 |  | January 2018 to May 2018 |  | Between 2.903 and 3.166 |  |  | Between 3.274 and 3.297 |  |  | 62,870 |
Copper Cathode |  | 2,756 |  | January 2018 |  | Between 2.970 and 3.246 |  |  | 3.274 |  |  | 179 |
Molybdenum |  | 3,340 |  | January 2018 to February 2018 |  | Between 7.229 and 7.231 |  |  | 8.950 |  |  | 5,687 |
|  |  |  |  |  |  |  |  |  |  |  | 68,736 |
|  |  |  |  |  | As of December 31, 2016 |
|  | Pounds |  |  |  |  |  |  |  |  |  |
|  | payable |  | Maturity |  | Provisional pricing |  | Forward pricing |  |  | Fair value provision |
|  | (000) |  |  |  | US$ |  | US$ |  |  | US$(000) |
Copper Concentrate |  | 344,787 |  | January 2017 to May 2017 |  | Between 2.091 and 2.656 |  | Between 2.507 and 2.512 |  |  | 68,130 |
Copper Cathode |  | 7,936 |  | January 2017 |  | Between 2.488 and 2.678 |  | 2.507 |  |  | (1,000) |
Molybdenum |  | 3,455 |  | January 2017 to February 2017 |  | Between 5.431 and 5.484 |  | 5.542 |  |  | 319 |
|  |  |  |  |  |  |  |  |  |  | 67,449 |

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