An upsurge in the violent protests racking Peru is crimping copper output in the world’s No. 2 supplier, with about 30 percent of its production at risk at a time of low global stocks and high prices.
One copper mine is offline after demonstrators stormed the site and another has seen shipments choked by roadblocks, while others have slowed operations as a precaution to manage scarce supplies of fuel and other inputs, the National Society of Mining, Petroleum and Energy (NSMPE) industry group said.
“The situation of protests and the escalation of violence have affected the industry,” NSMPE mining sector committee head Magaly Bardales said. “We hope an understanding, a dialog with authorities, can be found to provide a swift solution.”
Photo: Reuters
Demonstrators have blocked roads across Peru and clashed with security forces in more than six weeks of violent turmoil that began when former Peruvian president Pedro Castillo was impeached after he attempted to dissolve the Peruvian Congress.
Protesters are calling for Peruvian President Dina Boluarte and Congress to be replaced, with more than 50 deaths and the violence showing no signs of easing.
The disruption coincides with operational setbacks and regulatory headwinds in neighboring Chile and the prospect of a mine shutdown in Panama, as authorities seek a bigger share of profit.
Those supply chain risks have combined with optimism over Chinese demand after it lifted its COVID-19 curbs to send copper futures to seven-month highs.
With global stockpiles of the wiring metal at historically low levels, traders are keeping close watch on events in Peru.
The Andean nation accounts for about 10 percent of global copper supply and is a major exporter of zinc and silver.
About US$160 million of production has been lost in 23 days of protests, Bardales said.
Protests are nothing new in Peru, and the country’s emergence as a major mineral producer has exacerbated historically tense relations with poor rural communities.
The mining industry says not enough of the record-high revenue it generates for the state goes to improving local infrastructure and services.
However, the current wave of unrest stands out from past events.
“I haven’t seen this level of violence, the coordinated nature of action, seeking to affect mining and energy, during the time I have been working in the sector,” Bardales said.
Much of the unrest is centered in the southern region of Puno, where Minsur SA’s San Rafael tin mine has been targeted.
About 1,500 workers at San Rafael still cannot be evacuated, she said.
Tensions have fanned out into other areas of the south, including Espinar, Arequipa and Cusco. Glencore Plc’s Antapaccay mine has halted operations after protesters entered and damaged a worker camp.
The Las Bambas mining complex is operating at a reduced rate due to blockade-related supply challenges, said its Chinese-owned operator, MMG Ltd.
Bardales said Las Bambas is operating at just 20 percent of capacity, even as it continues to process ore on site.
The Cerro Verde mine in Arequipa is not directly affected by protests, but it has slowed mill operations by 10 to 15 percent in the past several days in a bid to conserve supplies such as lime amid a “very complicated” political situation, operator Freeport-McMoRan Inc said.
Other mines to the north, such as BHP Group-Glencore’s Antamina are running normally, as are mines in the south that do not depend on the so-called mining corridor for the transport of supplies, copper and people.
The transport of semi-processed copper to ports has seen some disruption, but the ports themselves are operating normally, Bardales said.
She said she had not heard of any “relevant” impacts on shipments.
The mining society continues to project an increase in Peruvian copper production this year as a new mine ramps up, although much depends on how long the current spate of protests lasts.
The unrest also jeopardizes the rollout of US$53.7 billion in possible investments at a time when the world needs to accelerate decarbonization and boost minerals required for electromobility, BTG Pactual analyst Cesar Perez-Novoa said.
“The combination of instability in other jurisdictions may exert upward pressure on copper prices,” Perez-Novoa said.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS