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.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in