Global mineral prices may come under pressure as Peru fixes broken railway

[LIMA] A railway used by copper, zinc and silver mines to transport concentrates from Peru's central Andes to port is likely be out of action for at least two to three weeks following deadly floods and mudslides, a minister said on Wednesday.The situation could put pressure global mineral prices. Peru is the world's second biggest copper producer and third biggest zinc and silver producer. The railway usually transports about half of the country's zinc and silver output, about 60 percent of its lead production and about 10 percent of its copper output, according to the energy and mines ministry.

Repairs should take about two weeks, but work in the field was unlikely to start until next week once dangerous river levels had eased, transportation minister Martin Vizcarra told Reuters.

The railway has been closed since Friday, when torrential downpours triggered flooding and mudslides that killed at least 75 people and ruptured the rail line in several places. "The damage wasn't mild, it was seriously damaged," Mr Vizcarra said by phone. "It'll take at least two to three weeks." Even after the railway resumes operations, exports from the port of Callao near Lima could be delayed by two to three weeks if ships wait for more concentrates to arrive in order to send full loads, said Deputy Mines Minister Ricardo Labo. "It's going to depend on where stock levels are in Callao,"Labo said.

The situation could put pressure global mineral prices.

Mr Vizcarra said the only available road routes took too long to be a practical alternative for transporting the minerals. "That's why we have to make a strong effort to make the railway operative again," Vizcarra said.

Mines in central Peru, from Chinalco's Toromocho copper deposit to Buenaventura's polymetallic mine Brocal, have been stockpiling their concentrates while they wait for the railway to be fixed.

REUTERS