Largest Chinese mine in Peru may stop work due to protests
2023.02.01 02:50
Largest Chinese mine in Peru may stop work due to protests
By Kristina Sobol
Budrigannews.com – Due to protests and blockades that are beginning to snarl production of the red metal amid an already constrained global supply, the massive Las Bambas copper mine in Peru, which is owned by China and typically supplies 2% of the metal worldwide, may stop producing this week.
Since the beginning of December, the Andean nation, the world’s second-largest producer of copper, has experienced growing social unrest. Protesters have attacked and roadblockaded key mines, primarily affecting copper transportation rather than production.
That might now shift. Early on Monday, China’s MMG Ltd. (1208.HK) stated that protests sparked by the ouster and arrest of leftist former President Pedro Castillo may force the Las Bambas mine, which is in the mountainous south of Peru, to stop operating on Wednesday.
MMG stated, “Due to shortages of critical supplies, the progressive slowdown of operations at Las Bambas has been forced by transportation interruptions affecting both the incoming and outgoing traffic.” The news had a big impact on its stock, sending it down 7.5%.
“The mine will not be able to continue the production of copper from February 1 if the situation does not change.”
The unrest in Peru is the worst it has been in decades, with 48 deaths from clashes and ten from accidents caused by road blockades.
The protesters want new elections to replace Congress and President Dina Boluarte quickly, but lawmakers have not yet established a new voting date. On Monday, they are scheduled to discuss a bill that would move the election to this year.
After legislators rejected a proposal late last week that would have allowed general elections to be held this year, Boluarte promised to offer a constitutional reform to move them to October.
According to a person who is close to the Las Bambas operation, road blockades were very effective and were typically rebuilt after they were cleared.
The person, who spoke on condition of anonymity, went on to say that the key to easing the situation would be for Congress to move the elections forward, and that if that didn’t happen, more blockades and protests were expected.
Glencore (GLEN.L), another significant player in the mining industry, temporarily halted operations at its enormous Antapaccay copper mine in Peru on January 20 following an attack by protesters.
While the protests have had an impact on transportation, they have not yet had a significant impact on production, according to a Reuters analysis of power consumption at key Peru copper mines, which can be a sign of mining activity.
