Vale to produce up to 335 million tonnes of iron ore in 2025
The miner reported an output of about 328 million tonnes this year.
China-backed miner MMG Ltd has placed its vast Las Bambas copper mine in Peru, the world’s second largest producing nation of the metal, on care and maintenance due to ongoing community unrest triggered by the destitution of President Pedro Castillo late last year.
Nationwide protests continued on Wednesday, in the eighth week of the South American country’s political crisis, local news outlets reported. The wave of intermittently violent demonstrations has already imperilled 30% of its copper output.
According to Peru’s ombudsman’s office 58 people have been killed and 1,792 injured in protests since December 7, when Congress removed President Castillo and arrested him.
Las Bambas had been operating at a reduced rate since then, but after warning on Monday that it may have to suspend the mine, MMG confirmed Wednesday that it would start a period of care and maintenance.
The copper mine, which accounts for 2% of the metal worldwide, had faced a shortage of critical supplies due to disruptions to inbound and outbound transport.
It currently has about 85,000 tonnes of copper inventory at site.
Commodities analyst for BMO Capital Markets, Colin Hamilton, said the Las Bambas story echoes several around Peru’s southern mining corridor.
“As civil unrest fuels disruption, we expect shipments from Peru, which also produces significant volumes of zinc, tin and silver, to be impacted over the coming months, and congress shows no sign of calling a general election in the immediate future,” Hamilton wrote.
MMG noted it had made progress in dialogue processes and the implementation of agreements during the fourth quarter across the six communities that participated in the 2022 protests, as well as with other locals who live along the logistics corridor.
“Discussions with the Huancuire community resumed in January 2023 and ongoing dialogue forums to discuss implementation of agreements with the Fuerabamba community have been established,” MMG said in its fourth quarter report.
“Unfortunately, all dialogue tables have been forced to pause due to security concerns amid nation-wide protests. We look forward to progressing these discussions once the social unrest dissipates,” it noted.
According to Bloomberg, production disruptions in Peru are threatening to choke off access to almost $4 billion worth the orange metal.
MMG’s chief financial officer Ross Carroll said the company has lost 25,000 tonnes of copper production each month the mine has been suspended over the past year.
Adding to the company’s issues in Peru is a $160 million tax bill, issued after an audit on the basis that all of the interest paid under bank loans in 2026 was non-deductible.
The miner has said it would dispute the bill and would even seriously consider international arbitration if local appeal avenues failed.
The halt of Las Bambas comes at a particularly precarious moment for copper markets as inventories stand at historically low levels while miners warn demand is poised to skyrocket with the growing electrification of vehicles.
Besides political reasons, the current unrest is Peru is being fuelled by longstanding grievances about high poverty levels and discrimination felt by many in Peru’s Andean and Amazonian regions.
The country’s south is rich in copper but locals say the benefits of mining don’t reach the communities who live close to the many operations.
