Production at Las Bambas hit by road blockades

Las Bambas copper mine in Peru, controlled by China’s MMG, said on Tuesday it is “progressively” reducing production due to local residents blocking a road in protest.

The mine, which supplies around 2% of global production of the red metal, said in a statement that since December 12 community members, who have long complained about a lack of benefits for locals flowing from the mine, had been blocking mining trucks from using a road in Velille district, Cusco region, 200 kilometers from the mine.

In a separate statement, the company said it had reached an agreement in September with the municipality of Velille to finance sustainable development projects for up to 1.25 million soles ($348,000) over two years, as well as making spot payments to families impacted by the effects of covid-19.

“Unfortunately, the people carrying out the blockade reject any possibility of dialogue, hampering the economic reactivation process this country needs,” the statement said.

On November 30th, a strike was launched by the Challhuahuacho district’s Farmers Federation, the Defense Front and the Youth Federation. They demanded that the national government complied with Supreme Decree N° 005-2016-PCM, which sets as a priority Challhuahuacho’s economic and social development, and the payment of a mining canon starting in 2021. 

The mining canon comprises 50% of the corporate income tax collected from mining firms by the national government and should be transferred to provincial and district municipalities, where extractive operations take place.

In a statement to the El Comercio newspaper, MMG said that Las Bambas had nothing to do with the protesters’ claims, as they were to be dealt with by the Peruvian government and the Challhuahuacho district.  

The mine said blockades of public roads have disrupted its operations for 95 days of the last year.

“We call on the national authorities to enforce the rule of law and guarantee the development of our operations,” MMG said.

Las Bambas is the world’s ninth-largest copper mine. In 2020, it was expected to produce between 350,000 and 370,000 tonnes of copper concentrate or about 2% of the global projected production.

In April, MMG withdrew the mine’s guidance due to the covid-19 pandemic and did not provide new full-year output guidance. 

(With files from Reuters)