Chinese miner MMG announced on Monday that the Las Bambas mine in Peru will likely have to halt production due to a “shortage of critical supplies” caused by transport disruptions from protests.
“If the situation does not change, the mine will not be able to continue copper production as of February 1, 2023, and the operation will enter a period of care and maintenance,” the company said in a statement translated to English.
Las Bambas, Peru’s third-largest copper mine, hasn’t dispatched copper concentrate since January 3 because of safety issues. Last week, an official said that mining at Las Bambas is taking place at a lower rate than usual, although processing is operating at full capacity. Due to frequent blockades set up by residents wanting greater benefits from the mine’s activities, the mine has decreased its output since late November.
This follows after Swiss miner Glencore had announced it is currently running the massive Antapaccay copper mine in Peru at a “restricted” capacity. Two Antapaccay company trucks were set on fire several weeks ago, and there were attacks in the neighborhood where the workers lived. Glencore responded by stating that it will evacuate its 2,400 employees from the area.
The Antapaccay and Las Bambas mines, which have the same highway access to ports, produce close to 2% of the copper used in the world.
Copper futures have reached past the $4.20 per pound mark, the highest level in seven months, as the promise of a demand boost from recovering China meets supply chain disturbance arising from the growing unrest in Peru. Protests in the world’s second largest copper exporter is threatening to choke off access to almost $4 billion worth of copper, as the country faces the worst wave of civil unrest in 20 years.
The South American nation has declared a state of emergency in the capital Lima as well as numerous other regions. Protests erupted following the expulsion and imprisonment of socialist President Pedro Castillo on December 7, who was accused of attempting to organize a coup by dissolving parliament, which was prepared to depose him.
Current President Dina Boluarte, his then-vice president from the same party, succeeded him in accordance with the Constitution. Demonstrators are calling for Boluarte’s resignation and new elections, mainly stemming from Castillo supporters seeing the newly installed president as a “traitor.”
Earlier on, Boluarte maintained that she will not step down despite the increasing conflicts resulting to a growing death toll. The deaths during the protests served as the focal point for a large portion of the outrage, with posters branding Boluarte a “murderer” and referring to the police and military killings as “massacres.”
Boluarte has declared her support for a proposal to move the 2026 presidential and congressional elections earlier to 2024. However, a large number of demonstrators claim that no conversation is conceivable with a government that has allegedly used such extreme violence against its people.
Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.