The mine thinks in decades. The model thinks in quarters

CAIDTech Research Series  |  Lima, Peru  | World Mining Congress | July 2026 

At WMC 2026, Roque Benavides said something the industry's financial models are not built to reflect. This article is about what that gap costs.

Roque Benavides · Chairman, Compañía de Minas Buenaventura · NYSE: BVN

1. THE QUESTION ON THE PANEL

The panel at the 27th World Mining Congress was called "Does The Mining Business Model Have to Change?" It was a question posed to some of the most experienced operators in the industry. Roque Benavides, Chairman of Buenaventura Mining Company, was among them.

Buenaventura was founded in 1953 by his father, Alberto Benavides de la Quintana, a geologist who spent decades prospecting Peru's Andes before discovering what would become one of the country's most significant silver and gold producers. Roque Benavides joined the company in 1977 and has led it through commodity cycles, political upheaval, pandemic shutdowns, and the kind of sustained operational complexity that few executives in any industry accumulate over decades. In 2026, Buenaventura marked 73 years of continuous operation and 30 years of listing on the New York Stock Exchange [1][2].

That context is not incidental to what Benavides said at WMC 2026. It is the foundation of it.

"You cannot do mining thinking in the short term, but in the long term," he said. And then he added the number that gives that statement its urgency: by 2035, global copper supply is projected to face a deficit of 35% [3].

That is nine years away. Most mining projects currently in the pipeline will not reach production within that window. The projects that will close the gap are the ones being evaluated and financed today, under conditions of simultaneous uncertainty in prices, costs, regulation, and community acceptance. The question the WMC panel posed, does the mining business model have to change, is therefore not primarily a question about operational practice. It is a question about how the industry makes decisions when the horizon it needs to serve is longer than most of its analytical tools were designed to reach.

"You cannot do mining thinking in the short term, but in the long term."

— Roque Benavides, WMC 2026

ANALYTICAL NOTE · CAIDTECH The 35% copper supply deficit projected for 2035 is not a forecast generated by a single model. It is a consensus estimate that appears across major analytical institutions including the International Energy Agency, S&P Global, and Wood Mackenzie, each using different methodologies but converging on the same structural conclusion: the pipeline of copper projects currently approved, financed, and under development is insufficient to meet projected demand from electrification, data infrastructure, and defense systems.

For investment decision-making, this structural deficit creates a particular analytical challenge. The standard DCF model evaluates a project against a base case price assumption. A structural deficit changes the probability distribution of future prices in ways that a single base case cannot capture. The value of a copper project evaluated today at current forward curves is not the same as the value of a copper project evaluated against a range of scenarios that includes the deficit scenario and all the price paths it implies.

2. WHAT 73 YEARS ACTUALLY MEANS

Buenaventura's longevity is unusual in any industry. It is extraordinary in mining, where commodity cycles, political risk, geological depletion, and community conflict have ended far more companies than they have sustained. Understanding what allowed Buenaventura to survive and grow across seven decades is not a question of corporate biography. It is a question of decision-making under uncertainty, applied repeatedly, over a horizon long enough that the compounding of good decisions and the avoidance of fatal ones becomes visible.

Benavides has described the architecture of those decisions consistently across years of public statements. Exploration is not a cost center. It is research. "Exploration and development is the equivalent of research and development," he wrote in El Comercio in March 2025, making explicit the analogy that most mining companies treat as a metaphor rather than a methodological commitment [4]. Buenaventura has operated continuously in eight of Peru's 24 regions, maintaining presence in communities across cycles when other operators have entered and exited based on price conditions.

That continuity is itself a form of risk management. A mining company that exits a region when prices fall and re-enters when they recover faces a different community relations landscape, a different permitting environment, and a different labor market than one that maintained its presence through the downturn. The cost of continuity in the short term is often lower than the cost of rebuilding trust, relationships, and institutional knowledge after an exit.

Benavides has also been direct about the moments when long-term thinking required absorbing short-term losses. The suspension of Uchucchacua, Buenaventura's silver mine in Oyon, between 2021 and 2023 was described by Benavides himself as one of the company's recent failures. Low ore grades, high capital requirements, and pandemic-elevated costs made continued operation uneconomic. The mine was placed in maintenance for nearly two years, generating fixed costs with no production. "In this case, I made a mistake," Benavides said [5]. The mine resumed operations in 2023 and by 2025 was processing nearly 1,500 tonnes per day with plans to reach 2,000 tonnes per day by year's end.

The Uchucchacua case is instructive not because it illustrates failure but because it illustrates the decision architecture that makes recovery possible. The choice to maintain rather than close preserved the option to restart without the full capital cost and timeline of a greenfield development. That is real options thinking applied in practice, whether or not it was formalized as such in the decision process. "Exploration and development is the equivalent of research and development."

— Roque Benavides, El Comercio, March 2025

ANALYTICAL NOTE · CAIDTECH

The Uchucchacua decision has a precise equivalent in real options analysis. The choice to maintain a non-producing asset rather than close it is the exercise of a deferral option: the right to restart production at a future date if conditions improve, without the sunk cost of recommissioning a closed asset. The value of that option depends on the volatility of silver prices, the cost of maintenance relative to the cost of closure and recommission, and the probability that conditions will improve within a meaningful time horizon.

In a deterministic DCF framework, the Uchucchacua decision looks like a loss: two years of fixed costs with no production. In a probabilistic framework that captures the value of the restart option, the decision looks like insurance: a fixed premium paid to preserve a future right. The difference between those two evaluations is not a matter of optimism or pessimism. It is a matter of analytical framework.

3. THE WATER NUMBER AND WHAT IT REVEALS

The most quoted statement from Benavides at WMC 2026 was also the most specific: "Peruvian mining can recirculate up to 97% of water in open-pit operations" [6]. The figure was cited in coverage across Peruvian media as evidence of the industry's environmental progress, and it is a genuine achievement. Water management in high-altitude Andean mining is technically complex and operationally critical, and a 97% recirculation rate represents years of investment in infrastructure, monitoring, and process optimization.

But the figure is also a data point about something larger. It is evidence that the mining industry, when it commits to a technical objective over a sufficiently long time horizon, can achieve outcomes that seemed implausible at the start of the commitment. The 97% figure was not achieved in a single capital cycle. It was the result of sustained investment, iterative improvement, and operational learning accumulated over years.

The same logic applies to the deficit problem Benavides identified. A 35% copper supply gap by 2035 is not a problem that can be solved by optimizing existing operations. It requires new mines, developed from projects that are currently in exploration or early feasibility stages. Those projects need to attract capital today, against a price environment that has not yet fully priced the deficit, under regulatory frameworks that were not designed for the scale and urgency the energy transition requires.

Benavides has been consistent on what makes that capital attraction possible. "We must defend legal stability, streamline processes and strengthen the rule of law," he has written, framing institutional quality not as a policy preference but as a prerequisite for investment at scale [7]. The Buenaventura track record is itself an argument for that proposition: 73 years of continuous operation in eight Peruvian regions required not just geological endowment but institutional relationships that could survive political cycles and commodity downturns.

ANALYTICAL NOTE · CAIDTECH

The tension between urgency and quality in project development is not new, but the energy transition has sharpened it considerably. The copper deficit Benavides cited is a function of timeline: there are not enough projects sufficiently advanced to close the gap by 2035. The industry response, accelerating development timelines, directly increases the technical and social risks embedded in project execution.

For quantitative risk analysis, this tension has a precise expression. A project evaluated at an accelerated schedule carries higher uncertainty in cost, timeline, and community acceptance than the same project evaluated at a standard development pace. That additional uncertainty has a calculable impact on the probability distribution of project outcomes. It is not a soft risk. It is a quantifiable one, and ignoring it in the investment decision does not make it disappear. It makes it invisible until it materializes.

4. NYSE STANDARDS AND THE VALUATION PROBLEM

Buenaventura was the first Latin American mining company to list on the New York Stock Exchange, 30 years ago. Benavides referenced that milestone at WMC 2026 as evidence of the company's commitment to international governance standards [2]. That reference is more consequential for the investment decision problem than it might appear.

The NYSE listing subjects Buenaventura to disclosure requirements and investor expectations that are among the most demanding in global capital markets. Quarterly earnings, annual reports, and periodic filings must present the company's financial position and risk profile in ways that institutional investors can evaluate and compare. That discipline, imposed externally and sustained over 30 years, has shaped how Buenaventura thinks about and communicates its long-term strategy.

The SK-1300 standard, which the SEC implemented to replace the older Industry Guide 7 for mineral resource disclosure, represents the most recent evolution of that discipline. It requires that mineral resource and reserve estimates be prepared by qualified persons using internationally recognized methodologies, and that the uncertainty associated with those estimates be disclosed in ways that allow investors to assess the range of possible outcomes rather than relying on a single point estimate [8].

That is precisely the direction that quantitative risk analysis points for the broader investment decision. SK-1300 requires probabilistic thinking about resource estimates. The same rigor should apply to the economic evaluation that follows: the translation of a resource estimate into a project NPV, and the translation of that NPV into an investment decision, should be conducted with the same acknowledgment of uncertainty that SK-1300 now requires for the geological inputs.

Benavides' emphasis on governance standards is not separate from the analytical argument. It is the institutional framework that makes the analytical argument enforceable. A company committed to international disclosure standards cannot, consistently, present a single deterministic NPV as a complete representation of a project's value. The same rigor that SK-1300 applies to geological estimates should extend to the financial evaluation that uses those estimates as inputs.

ANALYTICAL NOTE · CAIDTECH

The transition from Industry Guide 7 to SK-1300 in US securities regulation is directly relevant to how mining projects are evaluated for capital markets purposes. Under the old standard, resource estimates could be presented with limited disclosure of the uncertainty surrounding them. Under SK-1300, the qualified person responsible for the estimate must disclose the key assumptions and parameters used, the sensitivity of the estimate to those parameters, and the material risks that could affect the estimate.

That disclosure requirement creates a direct link between geological uncertainty and financial disclosure. A company that presents a deterministic NPV without disclosing how that NPV changes under different commodity price assumptions, or under different interpretations of the geological model, is not providing investors with the information they need to assess the investment. CAIDTech's quantitative risk analysis framework is designed to produce exactly that disclosure: a probability distribution of project outcomes under a range of scenarios, rather than a single expected value.

5. THE COPPER THE ANDES STILL HOLDS

One of Benavides' most consistent arguments across years of public statements concerns the geological potential that remains undeveloped in Peru's Andes. "We have not discovered a hidden, deep deposit" in Peru, he noted in 2021, contrasting the country's exploration track record with the deep discoveries that have been made in other jurisdictions [9]. Buenaventura's own pipeline reflects that observation: the company's projects in Cajamarca and Piura represent a shift from the aureous deposits that defined its history toward the copper deposits that the energy transition requires.

Peru holds the largest number of copper projects in the world, according to Benavides' own statements at the 2026 National Mining Congress, alongside 17 critical minerals required for the global energy transition [3]. The Andean corridor, extending from Peru through Bolivia and Chile, contains a disproportionate share of the world's copper resources. The question is not whether the resource exists. The question is whether the analytical and institutional frameworks exist to evaluate, finance, and develop it at the scale and pace the energy transition requires.

That question is the one Benavides was implicitly posing at WMC 2026 when he said you cannot do mining thinking in the short term. The 73-year track record of Buenaventura is evidence that long-term commitment to a mining jurisdiction, combined with the technical discipline to manage uncertainty across commodity cycles, can produce sustained value creation. The 35% copper deficit projected for 2035 is evidence that the industry needs to replicate that model at greater scale, in shorter time, with more projects, in jurisdictions where the track record is thinner and the institutional frameworks are still developing.

Doing that requires better tools for evaluating investment decisions under uncertainty. Not better forecasts of copper prices, which are ultimately unknowable at the 20 to 30 year horizon of a mine life, but better frameworks for making decisions that are robust across a range of price scenarios, that capture the value of operational flexibility, and that communicate the range of possible outcomes to investors in ways that allow them to make informed commitments.

ANALYTICAL NOTE · CAIDTECH

Peru's position as the holder of the largest number of copper projects in the world creates a specific analytical challenge. Many of those projects are at early feasibility stages, with resource estimates that carry substantial geological uncertainty and project economics that are highly sensitive to copper price assumptions. The convergence of geological uncertainty, economic uncertainty, and institutional uncertainty, particularly in regions where community engagement is complex, means that the standard approach of evaluating each project against a single base case price is systematically inadequate.

The Buenaventura model, sustained investment across commodity cycles with active management of the option to expand or contract operations as conditions evolve, is precisely the behavior that real options analysis is designed to capture and value. The fact that Buenaventura has practiced this model for 73 years without necessarily formalizing it in those terms does not diminish its analytical validity. It suggests that the formalization, the systematic quantification of the optionality embedded in long-term mining operations, would strengthen rather than replace the judgment-based approach that has produced Buenaventura's track record.

ANALYTICAL CONCLUSION · CAIDTECH

Roque Benavides did not present a new methodology at WMC 2026. He did something more useful: he described, in precise terms, the decision architecture that has allowed a single mining company to operate continuously for 73 years across one of the world's most complex mining jurisdictions. The long-term horizon. The treatment of exploration as equivalent to research and development. The commitment to governance standards that make investment decisions legible to global capital markets.

Each of those elements has a precise analytical counterpart. Long-term horizons require probability distributions, not point estimates. Exploration as R&D requires sequential decision frameworks that plan each action to reduce uncertainty efficiently. Governance standards require disclosing the range of possible outcomes, not just the expected one.

The 35% copper deficit projected for 2035 will not be closed by better forecasts. It will be closed by better investment decisions, made with analytical tools adequate to the length of the horizon and the complexity of the uncertainty. That is the work CAIDTech has been doing for ten years on the methodological side of the same problem that Roque Benavides has been working on from the operational side for seventy-three.

REFERENCES

[1] Benavides, R. (2021). Interview: Roque Benavides, Chairman of the Board, Buenaventura. The Business Year, Peru. https://thebusinessyear.com/interview/roque-benavides-chairman-of-the-board-buenaventura/

[2] Mineria Chilena. (2026, June). Roque Benavides: "El cobre es el metal del futuro." Interview at World Mining Congress 2026. https://www.mch.cl/roque-benavides-el-cobre-es-el-metal-del-futuro-y-creo-que-chile-y-peru-tienen-una-posicion-expectante-en-ese-sentido/

[3] Proactivo. (2026, June). CONAMIN 2026: Roque Benavides advierte que combatir la mineria ilegal es clave para atraer inversiones. https://proactivo.com.pe/conamin-2026-roque-benavides-advierte-que-combatir-la-mineria-ilegal-es-clave-para-atraer-inversiones/

[4] Benavides, R. (2025, March 6). El reto de la exploracion en hidrocarburos y mineria. El Comercio Peru. https://elcomercio.pe/economia/opinion/el-reto-de-la-exploracion-en-hidrocarburos-y-mineria-por-roque-benavides-noticia/

[5] Gestion. (2025, February). Buenaventura: Lecciones de una mina. Como la mayor productora de plata en Peru supero su crisis. https://gestion.pe/g-de-gestion/reportaje/buenaventura-roque-benavides-lecciones-de-una-mina/

[6] Horizonte Minero. (2026, June 25). Roque Benavides: la mineria peruana puede recircular hasta 97% del agua en sus operaciones. https://www.horizonteminero.com/roque-benavides-la-mineria-peruana-puede-recircular-hasta-97-del-agua-en-sus-operaciones/

[7] Benavides, R. (2026). Opinion columns, El Comercio Peru. Author page: https://elcomercio.pe/autor/roque-benavides/

[8] U.S. Securities and Exchange Commission. (2018). Modernization of Property Disclosures for Mining Registrants. Final Rule, Release No. 33-10570. SK-1300 standard for mineral disclosure.

[9] Global Business Reports. (2021). Interview: Roque Benavides, Buenaventura. https://gbreports.com/interview/roque-benavides

[10] International Energy Agency. (2023). Critical Minerals Market Review 2023. IEA, Paris. Global copper supply-demand projections to 2035.

[Note] All direct quotations attributed to Roque Benavides in this article come from verified public sources: coverage of WMC 2026 (June 2026), CONAMIN 2026 (June 2026), published opinion columns in El Comercio Peru (2025), and interviews with The Business Year (2021) and Global Business Reports. CAIDTech was present at the 27th World Mining Congress, Lima Convention Center, June 2026.

CAIDTech - Centro Avanzado de Investigación y Desarrollo de Tecnología Minera

www.caidtechnology.com  ·  luis.martinez@tmsac.net  ·  Lima, Peru