Copper mines target more production in 2023 as they recover from protests

Copper mines expect to raise production in 2023 as they recover from the impact of anti-government protests and road blockades earlier this year, although instability in the key mining sector remains latent due to unmet social demands.

Yields in Peru, the world's second largest copper producer, declined in January and February during the deadliest protests to hit Peru in more than 20 years, mainly in the southern part of the copper-rich Andean country.

However, the protests and blockades that disrupted transportation to the mines have largely dissipated, despite the continuing social unrest present since the ouster late last year of leftist former president Pedro Castillo, who illegally attempted to dissolve the opposition-dominated Congress.

"The southern (mining) corridor is operating normally, all the concentrate inventories that the mines had are being shipped to the coast," Victor Gobitz, president of the National Mining, Petroleum and Energy Society, told Reuters on Wednesday night.

STABLE MINING ACTIVITY

According to energy data from Peru's private electricity sector body COES, analyzed by Reuters, activity at Peru's main mines has stabilized since early March after outages in the first two months of this year stalled production and shipments.

This boosted workings at major mines such as Las Bambas of China's MMG Ltd, Glencore's Antapaccay, Hudbay's Constancia, as well as Antamina, Peru's largest copper mine co-owned by Glencore, BHP Group, Teck Resources Ltd and Mitsubishi Corp.

Gobitz said that the normalization of work at the mines will be joined by full production this year at Anglo American's Quellaveco, which began operating last year after an investment of some US$5.5 billion.

Quellaveco produced 94,201 tons of copper in 2022 and is expected to be about 250,000 tons this year, according to data from the firm.

"If we manage to solve the mining corridor issue and plus the 100% effect of Quellaveco, without a doubt in 2023 Peru will produce more copper than in 2022. That is our goal," said Gobitz, who is also president and general manager of Antamina.

Peru produced 2'438,631 tons of copper last year, up 4.8% versus 2021, and very close to its peak level reached before the global effects of the coronavirus pandemic.

Ratings agency Moody's said in a March report that most miners in Peru have survived the conflicts relatively unscathed, although "protests and blockades are likely to delay mining company permits for projects already under construction."

Road blockades have been drastically reduced since January and remain only sporadic in the Puno region, bordering Bolivia.

In Puno, where Minsur's San Rafael tin mine - the world's fourth largest - was shut down for almost two and a half months, there is a truce but blockades continue on weekends, according to protest leaders.

A Minsur spokesman told Reuters that they are "on the way to operating at full capacity, and it takes some time to get there, (but) it will depend on there being no other interruptions." The mine gradually restarted operations on March 20.

Gobitz said the protests had highlighted the need for the mining sector, which contributes large resources via taxes to the state, to take a more proactive role in supporting the development of local communities, which for years have complained that mining profits do not benefit them.

Otherwise, he warned, the population will continue to target mining operations with protests and blockades. "Political instability always takes its toll on the country," he said.

Reuters