Provisions

12 Months Ended

Dec. 31, 2025

Provisions

Provisions

14. Provisions

(a)

This caption is made up as follows:


		As of						Reclassifications				As of						Reclassifications				As of
		January 1,				Accretion		and				December 31,				Accretion		and				December 31,
		2024		Changes		expense		others		Disbursements		2024		Changes		expense		others		Disbursements		2025
		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)

Closure of mining units and projects (b)		259,366		73,090		8,476		(6,642)		(17,372)		316,918		75,510		11,021		1,054		(17,371)		387,132
Environmental liabilities		22,266		4,062		—		5,133		(6,634)		24,827		875		440		(1,054)		(3,824)		21,264
Environmental contingencies		3,689		2,987		—		—		(1,166)		5,510		3,604		—		849		(32)		9,931
Safety contingencies		4,963		(373)		—		—		76		4,666		(145)		—		547		(35)		5,033
Labor contingencies		3,824		643		—		—		(181)		4,286		407		—		498		(486)		4,705
Tax contingencies		2,991		(1,043)		—		—		—		1,948		923		—		42		—		2,913
Obligations with communities		1,838		(1,048)		—		—		—		790		(654)		—		42		—		178
Other provisions		1,763		(408)		—		—		—		1,355		64		—		28		—		1,447
		300,700		77,910		8,476		(1,509)		(25,277)		360,300		80,584		11,461		2,006		(21,748)		432,603

Classification by maturity:
Current portion		107,491										53,900										62,075
Non-current portion		193,209										306,400										370,528
		300,700										360,300										432,603

See related accounting policies in Note 2.4(n).

(b)

Provision for closure of mining units and exploration projects -

The table below presents the movement of the provision for closure of mining units and exploration projects:


		2025		2024
		US$(000)		US$(000)

Beginning balance		316,918		259,366

Additions (reversals) in estimates and reclassifications:
Continuing mining units		67,231		65,397
Discontinued mining units		3,550		555
Exploration projects, note 27(a)		5,783		496
		76,564		66,448
Accretion expense:
Continuing mining units, note 28(a)		9,573		7,563
Exploration projects, note 28(a)		1,278		518
Discontinued mining units		170		395
		11,021		8,476

Disbursements		(17,371)		(17,372)

Ending balance		387,132		316,918

Classification by maturity:
Current portion		32,279		25,758
Non-current portion		354,853		291,160

		387,132		316,918

The provision for closure of mining units and exploration projects represents the present value of the closure costs that are expected to be incurred between the years 2026 and 2039. The Group recognizes the provision for closure of mining units and exploration projects based on estimates of studies and activities that meet the environmental regulations in effect and that will be approved by the Ministry of Energy and Mines. The Group recognizes the provision of continued operations which is prepared by independent advisors and reviewed by the Group´s management. Provisions related to discontinued operations are based on estimates prepared by internal advisors.

The provision for closure of mining units and exploration projects corresponds mostly to activities that must be carried out for restoring the mining units and areas affected by exploration and production activities. The principal work to be performed correspond to earthworks, re-vegetation efforts and dismantling of the plants. Closure budgets are reviewed regularly to take into account any significant change in the studies conducted. Nevertheless, the closure costs of mining units will depend on the market prices for the closure works required, which would reflect future economic conditions. Moreover, the time when the disbursements will be made depends on the useful life of the mine, which in turn will be influenced by future metal price quotations. Certain closure activities have been affected by the presence of illegal and informal mining; accordingly, remediation works were required in areas that had already been closed and subsequently disturbed.

As of December 31, 2025, the future value of the provision for closure of mining units and exploration projects was US$448 million, which has been discounted using annual risk-free rates (Peru - cupón cero Exterior Dólares Soberana) from minimum of 1.16 percent to a maximum of 4.03 percent, in a period of 1 to 16 years, obtaining as a result an updated liability amounting to US$387.1 million (as of December 31, 2024, the provision was US$316.9 million). The Group believes that this liability is sufficient to meet the current environmental protection laws approved by the Ministry of Energy and Mines.

As of December 31, 2025, the Group has constituted letters of credit in favor of the Ministry of Energy and Mines for US$194.8 million (US$186.3 million as of December 31, 2024) to secure current mine closure plans of its mining units, exploration projects and environmental liabilities to date.

Sociedad Minera Cerro Verde S.A.A.

Provisions

Provisions

11. Provisions

This item is made up as follows:


		December 31,		December 31,
		2025		2024
		US$(000)		US$(000)

Current
Provision for legal contingencies (a)		2,345		2,411
Provision for remediation and mine closure (c)		99		—
Provision for social commitments (b)		92		4,600
Total current		2,536		7,011

Non–current
Provision for remediation and mine closure (c)		237,252		234,126
Provision for social commitments (b)		10,188		5,783
Provision for legal contingencies (a)		1,836		1,127
Provision for uncertainty over income tax treatments (d)		1,231		2,964
Provision for tax contingencies		—		3,427
Total non-current		250,507		247,427

Total provisions		253,043		254,438

(a)

The provision for legal contingencies is mainly associated with penalties incurred with OSINERGMIN and SUNAFIL (National Superintendence of Labor Inspection), which have been appealed by the Company.

(b)

The provision for social commitments is associated with repaving Alata-Congata Road (US$6.1 million as of December 31, 2025, and December 31, 2024) and an irrigation project in La Joya (US$4.2 million as of December 31, 2025, and US$4.3 million as of December 31, 2024).

(c)

The Company’s mineral exploration and exploitation activities are subject to environmental protection standards. In order to comply with these standards, the Company has obtained the approval for the Environment Adequacy Program (PAMA) and for the Environmental Impact Studies (EIA), required for the operation of Cerro Verde’s production unit and a mine closure plan approved by the Ministry of Energy and Mines.

During 2006, in compliance with the applicable law, the Company completed the closure plans for its mine site and presented it to the Ministry of Energy and Mines. The closure plans for its mine site were approved by Resolution No 302-2009 MEM-AAM and its modifications were approved by Resolution No 207-2012 MEM-AAM, Resolution No 186-2014 EM-DGAAM, Resolution No 032-2018 MEM-DGAAM and its last modification approved with Resolution No 0358-2023 MEM-DGAAM.

To date, the Company has issued a letter of credit totaling US$153.1 million as guarantee of the most recently approved plan.

The estimate of remediation and mine closure costs is based on studies prepared by independent consultants and based on current environmental regulations. This provision corresponds mainly to the activities to be performed in order to restore the areas affected by mining activities. The main tasks to be performed include ground removal, soil recovery, and dismantling of plant and equipment.

Under the closure regulations, the Company must submit a closure plan that includes the reclamation methods, closure cost estimates, methods of control and verification, closure and post-closure plans, and financial assurance. In compliance with the requirement for five-year updates, during the year 2023, the Company submitted its updated closure plan which was approved in December 2023 by the Ministry of Energy and Mines.

Presented below is a summary of change in the provision for mine remediation and closure:


		December 31,		December 31,
		2025		2024
		US$(000)		US$(000)

Beginning balance		234,126		259,844
Accretion expense		11,392		11,160
Changes in estimates (see Note 7)		(8,167)		(36,885)
Exchange rate effect		—		7

Final balance		237,351		234,126

As of December 31, 2025, the Company recognized a provision for mine remediation and closure of US$237.4 million (reflecting the future value of the mine remediation and closure provision of US$726.9 million, which was discounted using an annual risk‑free rate of 4.81%). As of December 31, 2024, the Company recognized a provision for mine remediation and closure of US$234.1 million (reflecting the future value of the mine remediation and closure provision of US$726.9 million, which was discounted using an annual risk-free rate of 4.78%). The Company considers this liability to be sufficient to comply with the applicable environmental protection laws issued by the Ministry of Energy and Mines.

For the year ended December 31, 2025, the Company recorded changes in its estimate of the remediation and mine closure asset (decrease of US$8.2 million) mainly due to an increase in the discount rate. For the year ended December 31, 2024, the changes in the estimate (decrease of US$36.9 million) were mainly related to an increase in the discount rate partially offset by higher future nominal flows (see Note 7).

(d)

As of December 31, 2025, represents interest and penalties related to mining taxes and income taxes for the years 2017 through 2023 (As of December 31, 2024, correspond to the years 2018, 2020, 2021, 2022, and 2023), determined in accordance with IFRIC 23, “Uncertainty over Income Tax Treatments.”