Peruvian road blockade forces MMG to stop production of Las Bambas copper mine

Minmetals Group MMG (HKG: 1208) will have to stop operations at its Las Bambas copper mine again because community protests in nearby Chumbivilcas province have affected supply logistics. It is reported that the mine is one of the largest copper mines in Peru.

The company said on Monday that the blockade of public roads along Peru's main copper transport corridor had affected its concentrate shipments and sales.

Although production at the mine continues, the company expects continued disruptions to force it to stop operations sometime this week.

MMG said the protests were related to local demands for more logistics contracts and the classification of these communities as directly affected areas.

LAS BAMBAS is the ninth largest copper mine in the world, with an annual output of about 400000 tons of industrial metals, accounting for about 2 per cent of global production.

The miner said locals had rejected the company's social development proposal, adding that it was seeking "active coordination" with the Peruvian government and community to reach an agreement.

Less than a month ago, a bus carrying Las Bambas contractors fell off a cliff in the Peruvian Andes, killing 16 people and injuring two others.

Road closures have been a common problem affecting the large copper mine since the increase in production in 2015-16, often accompanied by the suspension of shipments.

Overall, the mine was suspended for more than 100 days in 2019, with more than 70 communities along 450 km. The community demanded that MMG and the national government take action on truck emissions and reduce farmland around the roads in Port Matarani.

A three-week roadblock protest at the end of 2020 prevented MMG from exporting 189000 tons of copper concentrate from the mine, valued at US $530 million.

Las Bambas is the ninth largest copper mine in the world, with an annual output of about 400000 tons of industrial metals, accounting for about 2 per cent of global production.

Shares in MMG, which is majority owned by Minmetals, fell nearly 7.5 per cent on Monday, the worst day in more than a month.

Mining accounts for 60% of Peru's exports, mainly to the Chinese market.