Peru protests threaten production at China-owned copper mine

ONE of Peru’s biggest copper mines will stop production on Wednesday (Feb 1) if transport disruptions linked to nationwide political unrest persist, its owner said.

MMG, a company controlled by China Minmetals Corporation, said on Monday that the Las Bambas mine would not be able to continue producing copper amid “a shortage of critical supplies”, caused by road blockages in the area. The mine is a major source of copper in a country that churns out about one-tenth of the world’s supplies.

The National Society of Mining, Petroleum and Energy (SNMPE) said about 30 per cent of Peru’s copper production is at risk. Prices of the industrial metal have already risen 10 per cent this year; if the situation worsens, there is potential for the market to tighten further.

Peru is also a significant producer of silver, zinc and tin. 

Protests have rocked the country for almost two months, following the impeachment and replacement of former president Pedro Castillo. The strife has included roadblocks, street demonstrations and the storming of a Glencore mine.

There are also copper supply risks in neighbouring Chile. This comes as demand from the biggest buyer in China looks poised to rebound. 

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Copper was little changed on Monday. MMG shares fell as much as 6.4 per cent in Hong Kong, where it is listed.

The SNMPE said that MMG was already operating Las Bambas at just 20 per cent of its 400,000 tonne annual capacity by week.

The mine has had a troubled history since starting production in 2016, with shipments frequently disrupted by community protests. Output fell 30 per cent in the first half of 2022, when the mine was forced to shut for 50 days. BLOOMBERG