MMG to halt Las Bambas copper mine operations mid-December if roadblocks remain

MMG may halt operations by mid-December at its $10 billion Las Bambas copper mine in Peru unless community protesters lift long-running roadblocks, the company said Dec. 3.

The roadblocks have been ongoing for 20 days in the southern Andean Chumbivilcas province that have blocked deliveries of supplies to the mine, the Melbourne-based company said in a statement.

Several attempts at talks with protesters have failed to reach an agreement due to "excessive commercial demands," it added.

"Las Bambas has been forced to progressively wind down mine operations and production will cease by mid-December due to a lack of key consumables," MMG said in the statement. "Copper production to end-November was around 278,000 mt, with the length of the ongoing delay and production impacts for December remaining highly uncertain."

Production at the mine, which was curtailed by a coronavirus lockdown in 2020, has also been limited in 2021 by low ore grades at the Ferrobamba pit and permitting delays to develop the Chalcobamba pit

Andean villagers in the southeastern highland Apurimac region have been protesting since the mine started operating in early 2016 for greater social spending and to have the southern highland road to the port of Matarani paved.

The mine, which accounts for 16% of Peru's copper output, has been blocked for a total of 86 days this year and 401 days since starting operations, according to the National Society of Mining, Petroleum & Energy, which urged the government of leftist President Pedro Castillo to restore order.

"The situation is extremely critical," SNMPE manager Pablo de la Flor said in a statement. "It's impossible to continue operating under these conditions."

MMG, a unit of China Minmetals, cut 2021 Las Bambas copper production guidance to 300,000-305,000 mt from 311,020 mt last year. Production at the mine has declined steadily since peaking at 453,749 mt in 2016.

The mine produced 223,899 mt of copper — up 4% year on year — and 4,061 mt of molybdenum — up 119% — through the first three quarters of 2021, according to the company.

Las Bambas is designed to produce 2 million mt during its first five years of operations. The 140,000 mt/d capacity mine, designed to produce 450,000 mt/year of copper, 5,000 mt/year of molybdenum, 90,000 oz/year of gold, and 450,000 oz/year of silver, has an estimated mine life of 18 years.