Cost of sales

12 Months Ended

Dec. 31, 2017

Disclosure of cost of sales [Line Items]

Disclosure of cost of sales [text block]

21.

Cost of sales, without considering depreciation and amortization

(a)

The cost of sales of goods is made up as follows:

	2017		2016		2015
	US$(000)		US$(000)		US$(000)

Beginning balance of finished goods and products in process, net of depreciation and amortization		58,633		69,932		105,944
Cost of production
Services provided by third parties		262,195		211,325		230,148
Consumption of materials and supplies		134,070		100,401		100,241
Direct labor		87,886		72,344		66,745
Electricity and water		44,345		41,989		34,972
Rentals		26,591		10,852		5,783
Maintenance and repair		22,839		17,792		7,401
Transport		16,254		10,880		9,502
Insurances		6,637		4,347		5,247
Provision (reversal) for impairment of finished goods and product in progress, note 8(b)		2,118		(7,581)		13,096
Cost of concentrate purchased to associates		439		2,958		-
Other production expenses		10,464		9,789		7,078
Total cost of production of the period		613,838		475,096		480,213
Final balance of products in process and finished goods, net of depreciation and amortization		(45,038)		(47,216)		(72,667)
Cost of sales of goods, without considering depreciation and amortization		627,433		497,812		513,490

(a)

The cost of services is made up as follows:

	2017		2016		2015
	US$(000)		US$(000)		US$(000)

Direct labor		7,398		5,983		18,314
Services provided by third parties		1,782		1,689		16,247
Consumption of materials and supplies		1,026		868		7,865
Maintenance and repair		946		217		637
Electricity and water		586		633		7,134
Rentals		423		480		2,544
Insurances		246		212		1,233
Transport		98		213		3,868
Other		449		459		1,770
Cost of sales of services, without considering depreciation and amortization		12,954		10,754		59,612

Sociedad Minera Cerro Verde S.A.A. [Member]

Disclosure of cost of sales [Line Items]

Disclosure of cost of sales [text block]

16.

Cost of sales

This item is made up as follows:

	For the year ended		For the year ended		For the year ended
	December 31, 2017		December 31, 2016		December 31, 2015
	US$(000)		US$(000)		US$(000)

Materials and supplies		556,022		496,918		364,234
Depreciation and amortization		456,467		472,997		244,477
Labor (a)		286,058		215,839		146,395
Energy		229,272		229,035		118,019
Third parties services		144,829		100,897		95,087
Change in work in process inventory		51,412		(3,789)		(118,327)
Management Fees		2,867		2,793		3,565
Change in finished goods inventory		2,060		(3,951)		467
Other costs		39,251		42,301		8,087
		1,768,238		1,553,040		862,004

(a)

Labor includes an expense of US$86.4 million related to profit sharing for the year ended December 31, 2017 (US$36.8 million for the year ended December 31, 2016 and credit of US$1.6 million for the year ended December 31, 2015).

In compliance with corporate policies, the Company recognizes administrative costs directly to cost of production (approximately U$34.4 million for the year ended December 31, 2017, and US$23.4 million for the year ended December 31, 2016 and US$19.5 million for the year ended December 31, 2015). The effect of this policy is immaterial to the financial statements as a whole.

Minera Yanacocha SRL and subsidiary [Member]

Disclosure of cost of sales [Line Items]

Disclosure of cost of sales [text block]

16.	Costs applicable to sales

This caption is made up as follows:

	2017		2016		2015
	US$(000)		US$(000)		US$(000)

Beginning balance of finished goods and in-process		446,503		544,325		660,763
Beginning balance of provision for net realizable value, note 8(b)		(84,374)		(90,298)		(163,094)
Consumption of supplies		240,881		228,376		210,384
Personnel expenses		99,702		87,258		102,867
Other services		66,408		73,779		82,787
Maintenance		24,033		36,213		38,646
Power		23,565		27,270		27,713
Depreciation and amortization		87,783		140,712		223,142
Workers' profit participation		1,242		12,394		28,852
Reclamation expenses related to leach pads, note 12(b)		124,124		78,494		-
Ending balance of provision for net realizable value, note 8(b)		62,540		84,374		90,298
Ending balance of finished goods and in-process		(345,489)		(446,503)		(544,325)
		746,918		776,394		758,033