Las Bambas: MMG announced that it will suspend operations in Peru due to the blocking of the mining corridor

MMG’s Las Bambas copper mine in Peru will shut down copper production in mid-December due to continued road blockages by residents of Chumbivilcas communities, the company announced Friday. Executives urged the Peruvian government to build a freight or rail link to avoid similar disruptions in the future.

“The freight rail has great social acceptance”Carlos Castro, Las Bambas’ head of corporate affairs, said in an interview with Reuters.

Las Bambas is one of Peru’s largest copper mines, but its operations have been disrupted about 400 days since it began operating in 2016, the executives said.

It is a dirt road that Las Bambas uses to transport copper from its mine to a seaport, but the communities along the highway have strongly opposed this method of transportation, citing environmental and social concerns.

Las Bambas even faced a production shutdown threat for the last time in October.

Executives acknowledged that the dirt road was not sustainable in the future, saying it was the government’s responsibility to pave the route in the medium term, but that in the long term building a separate freight train link would be the best solution.

While Peru’s current administration under Pedro Castillo has backed the train, the government’s own cost estimate is significant at US $ 9.2 billion and it would only start operating in 2028.

Las Bambas was originally going to transport its copper through an underground pipeline, but that plan was canceled when the mining project was sold to Chinese miner MMG.

“From the point of view of social profitability, it is unacceptable,” said Castro. “What local families tell us is that a pipeline would negatively affect the area, because all the businesses associated with (copper) transportation would cease to exist.”

Announcement by MMG about the closure of Las Bambas operations due to the road blockade

ROAD BLOCKING

Currently, the highway is blocked by residents of Chumbivilcas province, who are negotiating contracts for locals to be hired as drivers for the mine.

The Hong Kong-listed company said a resolution was not reached at a November 30 meeting between the Peruvian government and the community because of what the company considers to be “excessive commercial demands.”

In July, Las Bambas noted that production in 2021 was expected at the lower end of its forecast of 310.00-330,000 tonnes.

Las Bambas produces 400,000 tons of copper per year, or about 2% of the world’s copper.

Stocks at the site have now increased to around 50,000 tonnes of copper in concentrate.

Las Bambas produces 13% of the country’s copper.

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