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Derivative financial instruments | 12 Months Ended
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Dec. 31, 2018
Disclosure Of Embedded derivatives [Line Items] |
Disclosure of derivative financial instruments [text block] |
| 32. | Derivative financial instruments
Hedge derivative financial instruments - The volatility of copper prices during the last years has caused the Management of the subsidiary El Brocal to enter into future contracts. These contracts are intended to reduce the volatility of the cash flows attributable to the fluctuations in the cooper price i n 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. There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreign exchange and commodity forward contracts match the terms of the expected highly probable forecast transactions. The Group has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the commodity forward contracts are identical to the hedged risk components. To test the hedge effectiveness, the Group uses the hypothetical derivative method and compares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks. The hedge ineffectiveness can arise from:
| - | Differences in the timing of the cash flows of the hedged items and the hedging instruments
| - | Different indexes (and accordingly different curves) linked to the hedged risk of the hedged items and hedging instruments
| - | The counterparties’ credit risk differently impacting the fair value movements of the hedging instruments and hedged items
| - | Changes to the forecasted amount of cash flows of hedged items and hedging instruments
The table below presents the composition of open transactions included in the hedge derivative financial instruments as of December 31, 2018:
|  |  |  |  | Quotations |  |  |  |
Period of settlement |  | MT |  |  | Fixed |  | Futures |  |  | Fair value |
|  |  |  |  |  |  |  |  |  | US$(000) |
January 2019 |  |  | 1,000 |  |  | 7,345 |  | 5,961 |  |  |  | 1,381 |
February 2019 |  |  | 1,000 |  |  | 7,352 |  | 5,968 |  |  |  | 1,378 |
|  |  | 2,000 |  |  |  |  |  |  |  |  | 2,759 |
The table below presents the composition of open transactions included in the hedge derivative financial instruments as of December 31, 2017:
|  |  |  |  | Quotations |  |  |
Period of settlement |  | MT |  |  | Fixed |  | Futures |  |  | Fair value |
|  |  |  |  |  |  |  |  |  | US$(000) |
January 2018 |  |  | 3,000 |  |  | 5,972 – 6,050 |  | 7,275 |  |  |  | (3,787 | )
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 |  |  |  | (28 | )
|  |  | 36,000 |  |  |  |  |  |  |  |  | (28,705 | )
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, 2018 and 2017, information about the Company’s embedded derivatives is as follows:
|  |  |  |  |  |  |  | As of December 31, 2018
|  | Pounds payable |  |  | Maturity |  |  | Provisional pricing |  | Forward pricing |  |  | Fair value provision |
|  | (000) |  |  |  |  |  | US$/Pound |  | US$/Pound |  |  | US$(000) |
Copper Concentrate |  |  | 261,530 |  |  |  | January 2019 to May 2019 |  |  | Between 2.675 and 2.834 |  |  | Between 2.704 and 2.708 |  |  |  | (18,848 | )
Copper Cathode |  |  | 7,711 |  |  |  | January 2019 |  |  | 2.810 |  |  | 2.704 |  |  |  | (824 | )
Molybdenum |  |  | 3,545 |  |  |  | January 2019 to February 2019 |  |  | Between 10.787 and 10.810 |  |  | 10.675 |  |  |  | (441 | )
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (20,113 | )(a)
|  |  |  |  |  |  |  | As of December 31, 2017
|  | Pounds payable |  |  | Maturity |  |  | Provisional pricing |  | Forward pricing |  |  | Fair value provision |
|  | (000) |  |  |  |  |  | US$/Pound |  | US$/Pound |  |  | US$(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 | (a)
| (a) | Embedded derivative adjustments are recorded on the statement of financial position in “Trade account receivable – related parties” (US$(19.3) million as of December 31, 2018 and US$65.6 million as of December 31, 2017) and “Trade accounts receivable (net)” (US$(0.8) million as of December 31, 2018 and US$3.1 million as of December 31, 2017).

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