Peru Protests Could Disrupt $4 Billion Worth Copper Production

Protests and social unrest in Peru jeopardizes the country’s almost $4 billion worth of copper production, as China’s emergence from Covid lockdowns is poised to ramp up demand. Peru’s third largest copper mine, Las Bambas, has not produced any copper concentrate since Jan. 3 due to security concerns. Glencore’s Antapaccay mine has also been facing disruptions. The two mines, which share the same access to ports, together account for almost 2% of global output.

Peru has been facing social unrest since the country’s former President Castillo was ousted and arrested. The country’s commodity supply chains from metals to food products have been hampered as a result. The disruption comes at a particularly precarious moment for copper markets. Inventories stand at historically low levels while miners warn demand for the world’s most critical metal is poised to skyrocket with the growing demand for electric vehicles.

Base metal prices have been on a rise since the beginning of the year after China abruptly abandoned its zero-Covid policy. Although prices settled Wednesday after a seven month high on the London Metal Exchange, the prediction of deficits cause a record $11,000 a ton forecast within 12 months.

Las Bambas, whose operator MMG is controlled by state-owned China Minmetals, has been the target of multiple demonstrations since it opened in 2016 as indigenous groups seek greater compensation for land and roads used by mining companies.

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