One of the world’s top copper mines is running out of storage space, raising the risk of slowing or halting production in another threat to global supply of the metal.
(Bloomberg) — One of the world’s top copper mines is running out of storage space, raising the risk of slowing or halting production in another threat to global supply of the metal.
Las Bambas, Peru’s No. 3 copper mine that accounts for about 1.4% of the world’s production, has been forced to store semi-processed material on-site as protests restrict transportation, operator MMG Ltd. said in an emailed response. Stockpiles have reached about 500,000 metric tons of concentrate containing 125,000 tons of metal, said Raul Jacob, who heads Peru’s mining and energy society SNMPE. That’s worth $1 billion at today’s price.
“While mine operations continue largely as normal, stockpiles are fast approaching capacity,” the company controlled by state-owned China Minmetals Corp. wrote. “Las Bambas has implemented contingent arrangements which should allow production to continue until the end of the year.”
If Las Bambas runs out of room, it may have no choice but to halt production. The storage predicament would have implications for a tight global copper market, where prices are up 20% from a mid-July low. Traders are betting Beijing’s easing of Covid restrictions will spur demand in the world’s biggest consumer of the metal. Last month, China took in a record volume of copper concentrate.
Blockades at the mine pre-date political protests that erupted in the wake of Pedro Castillo impeachment last week. Las Bambas has been the target of multiple demonstrations since it opened in 2016 as indigenous groups seek greater compensation for land and roads used by mining companies. The latest round has simmered for most of this year, reaching a peak in April with clashes between security and protesters.
Las Bambas continues to operate, bringing in workers and supplies through unblocked access routes, though it stopped moving copper concentrate to ports for export to China. Last year, the mine churned out 290,106 tons, or about 13% of the national total, government data show.
MMG anticipates that protests may “continue to create flow-on impacts along the Southern Road Corridor,” it wrote.
–With assistance from Liz Ng.
(Adds stockpile calculation in second paragraph)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
