The huge Chinese-owned Las Bambas copper mine in Peru, normally the supplier of 2% of the metal worldwide, could halt production this week due to protests and blockades that are starting to snarl output of the red metal amid already tight global supply.
The Andean nation, the world’s second-largest copper producer, has seen growing social unrest since early December, with key mines hit by road blockades and attacks by protesters, mainly impacting the transportation of copper rather than production.
That may now change. China’s MMG Ltd said early on Monday that its Las Bambas mine, located in Peru’s mountainous south, may have to halt operations from Wednesday due to protests that were sparked by the ouster and arrest of leftist former President Pedro Castillo.
“Transport interruptions affecting both the incoming and outgoing traffic have forced the progressive slowdown of operations at Las Bambas due to shortages of critical supplies,” MMG said. Its shares were hit hard by the news, falling 7.5%.
“If the situation does not change, the mine will not be able to continue the copper production from February 1.”
The unrest in Peru is the worst in decades, with 48 people having been killed in clashes and 10 others in accidents related to road blockades.
The protesters want quick new elections to replace President Dina Boluarte and Congress, but lawmakers have so far failed to set a new timeline for the voting. They are set to debate a bill on Monday to bring the ballot forward this year.
On Sunday, Boluarte pledged to offer a constitutional reform to move general elections to this October, after legislators late last week batted down a proposal that would have opened the door to holding elections this year.
A source close to the Las Bambas operation said road blockades had been extremely effective and usually were rebuilt after being cleared.
The person, speaking on condition of anonymity, added that the key to easing the situation would be for Congress to bring forward the elections, adding that more blockades and protests were expected if that was not done.
Another major player in the mining industry, Glencore, temporarily suspended operations at its huge Antapaccay copper mine in Peru on Jan. 20 after protesters attacked the premises.
A Reuters analysis of power usage by key Peru copper mines, which can be an indicator of mining activity, shows that the protests, while hitting transportation, have yet to fully weigh on production.
Copyright 2023 Thomson/Reuters