Protests force Peru’s largest copper mine to halt operations

Protesters are demanding compensation for the use of their land to transport the ore produced by Antamina, which is owned by BHP (33.75%), Glencore (33.75%),Teck Resources (22.75%) and Mitsubishi (10%).

“We don’t want to wait until something happens that puts at risk the physical integrity of anybody. … We think it is necessary for the government and its authorities to act to re-establish order,” the company said in a statement.

The demonstration is the latest in a string of protests against mining companies since President Pedro Castillo took office in July.

The socialist leader swept to power pledging to strike a new deal with the copper mining sector and redistribute profits to Andean communities like those around Antamina, MMG’s Las Bambas and Glencore’s Antapaccay.

The country’s national society of mining, oil and energy, an industry body, said many protesters demand measures to restrict mining in the headwaters of a basin, ignoring that such areas are already protected by the water resources law.

“We see an intolerable violation of the state of law that puts the lives of workers and the population at great risk, as well as well as to public and private property,” executive director Pablo de la Flor said in a statement.
Supply concerns

Before the recent wave of social unrest in the Andean nation, Antamina — located in the country’s northern region of Ancash, at an altitude of about 4,200 metres — was expected to become the world’s fourth largest copper producing mine this year.

The operation’s manager, Víctor Gobitz, said in October that copper output was expected to jump by 11.8% this year to 443,000 tonnes, compared to Chile’s Escondida at 1.13 million tonnes, PT Freeport’s Grasberg mine in Indonesia at 620,300 tonnes, and Chile’s Collahuasi at 600,000 tonnes.

Government figures show Antamina churned out 302,958 tonnes of copper in the January-August period, a 25.6% increase compared to the same period last year. It also paid taxes representing about 4% of the country’s total tax revenue in 2020.

Peru is the world’s second biggest copper producer after neighbouring Chile and a major supplier of silver and zinc.

Social unrest in the nation’s mining areas deepens global concerns around a looming deficit of copper.

According to estimates from CRU Group, the copper industry needs to spend more than $100 billion to close what could be an annual shortage of 4.7 million tonnes by 2030.

What happened to the London Metal Exchange’s copper inventories earlier this month illustrates how tight the market can become.

The LME was caught off guard by a sudden emptying of available copper in its warehouses, which drove inventory levels to their lowest since 1974. Over the past two months, freely available inventories have shrunk by more than 90% in LME-monitored warehouses as orders surged.

Used in everything from construction materials to batteries and engines, copper is both an economic bellwether and a key ingredient in the push toward renewable energies and electric vehicles. If producers fail to address the deficit, prices will keep rising and present a challenge to the world leaders, who are counting on a worldwide energy transition to fight climate change.