MMG Limited, listed on the Hong Kong Stock Exchange (1208:HK) announced on 07 February 2022 that it would have to stop production at its Las Bambas copper mine by the 20th of February as a result of an ongoing blockade of the road used by the company. Las Bambas is Peru’s fourth-largest copper mine and the ninth largest in the world, starting operations in 2015-2016. Its operation has been halted for over 400 days since opening and has prevented the export of 189,000 tonnes of copper concentrate, worth USD $530 million. The mine has an annual production capacity of 400,000 tonnes of copper and significant quantities of gold and silver, which accounts for around 2% of the total global primary output of copper.
From 20th November 2021, residents of the Chumbivilcas province have intermittently blocked access to Las Bambas, forcing the Chinese mining company to reduce production capacity. The residents are demanding jobs and economic contributions from MMG, which is a subsidiary of the state-owned China Minmetals. The mine employs over 6000 workers with 25% being residents of the Apurímac region.
Communities living along the road have asked for more logistics transport contracts, financial compensation for the land used to build the road serving the mine and compensation for alleged damages to their crops caused by the trucks transporting materials. MMG agreed to integrate the communities into its value chain in early October.
The company has offered financing for individual social projects, but local residents have also demanded the creation of a fund using 8% of the mine’s annual profits to finance social development projects. MMG believes that the Peru government should pave the route, and has considered creating a separate freight train link as a long-term solution. Peru’s transport and communications ministry expects that such a railway would take more than 5 years to construct and cost USD $9.2 billion.
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