By Marcelo Rochabrun and Arundhati Dutta
(Reuters) -MMG Ltd’s Las Bambas copper mine has stopped operations, an executive said on Thursday, after it failed to reach agreement with a Peruvian community that has blocked a transport road used by the facility for almost 30 days.
The company had said earlier in the day that production would stop on Saturday, while Las Bambas head of corporate affairs Carlos Castro told reporters operations had already stopped on Wednesday.
The blockade against Chinese-owned Las Bambas by residents of the Chumbivilcas province has been in place since Nov. 20. The mine accounts for 2% of world copper supply while Peru is the world’s no. 2 copper producer.
The news sent Hong Kong-listed shares of MMG plunging 12%, before they recouped some losses to close 5% lower at HK$2.30.
The suspension is a blow for leftist President Pedro Castillo, who is the midst of trying to raise taxes on the mining sector to fund social programs. Las Bambas is the second mine to announce a halt this week, after Nexa Resources said it would do the same at its Cerro Lindo zinc mine due to a similar road blockade.
Mining conflicts in Peru are on the rise and the president of Peru’s mining chamber Raul Jacob said protests this year had resulted in 150,000 fewer tonnes of copper being produced. Protests have also targeted Glencore’s Antapaccay, Hudbay’s Constancia and top producer Antamina, co-owned by Glencore and BHP
Victor Villa, an advisor for Chumbivilcas residents, said on Thursday there had been no progress in reaching a deal. He said Chumbivilcas was considering unblocking the road for the Christmas holidays, but would immediately restart the blockade afterward.
If put in place, the temporary truce is unlikely to meaningfully help Las Bambas to restart production. The firm and the main mining industry chamber are set to host a press conference later on Thursday.
The point of contention between Chumbivilcas and Las Bambas is a dirt road used by the mine to transport copper to a seaport. Residents from several regions who live along the road allege the dust raised by the trucks pollutes their crops and affects their livelihoods. They have been asking the mine for jobs and economic contributions.
“We cannot sustain this situation for much longer, Prime Minister Mirtha Vasquez told reporters on Wednesday about the conflict https://www.reuters.com/markets/commodities/peru-pm-says-las-bambas-standoff-cannot-be-sustained-much-longer-2021-12-15.
The government failed earlier this week to facilitate a meeting between the parties as talks stalled, with Villa saying the company’s latest proposal on jobs and contributions was a “joke.”
(Editing by Bernadette Baum)
