Jan 30, 2023
Peru Protests Put Huge China-Owned Copper Mine on Brink of Halt
(Bloomberg) -- One of Peru’s biggest copper mines will stop production Wednesday if transport disruptions linked to nationwide political unrest don’t end, according to its owner MMG Ltd.
Protests have rocked the country for almost two months following the impeachment and replacement of former President Pedro Castillo. About 30% of Peru’s copper production is at risk, according to industry association SNMPE.
The Las Bambas facility will be unable to keep producing copper from Feb. 1 amid “a shortage of critical supplies” caused by road blockages in the area, Hong Kong-listed MMG said in a statement on Monday. The mine is a major source of copper in a country that churns out about a 10th of the world’s supplies.
See also: Why a President’s Arrest Triggered Violence in Peru: QuickTake
The strife in Peru has seen roadblocks, street demonstrations and the storming of a Glencore Plc mine. If the situation worsens there’s potential for the copper market to tighten further, with prices for the industrial metal having already risen by 10% this year. There are also supply risks in neighboring Chile, while demand in the biggest buyer in China looks poised to rebound.
Copper was little changed on Monday, while MMG shares fell as much as 6.4% in Hong Kong.
MMG, controlled by state—owned China Minmetals Corp., was already operating Las Bambas at just 20% of its 400,000 ton-a-year capacity by week, according to to SNMPE. Peru is also a significant producer of silver, zinc and tin.
Las Bambas has had a troubled history since it started production in 2016, with shipments frequently disrupted by community protests blocking the vehicles that carry ore to port from high in the Andes. Output fell 30% in the first half of last year, when the mine was forced to shut for 50 days.
©2023 Bloomberg L.P.
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