New Copper Mine Operation in Peru Threatened by Trucking Halt

(Bloomberg) -- Chinese-owned MMG Ltd. has signaled that its Las Bambas mine in Peru, a major source of new copper supply, may have to stop operating if a blockade of its only trucking route isn’t lifted soon.

Protesters have cut off the only road for moving concentrate amid a dispute over dust pollution generated by hundreds of trucks. One man died and 20 police were injured in clashes last week. The mine is still operating, but that could change because there is limited space to pile up inventory, Chief Executive Officer Andrew Michelmore said on a call with media and investors.

“With high current stocks and no trucking, the situation cannot extend much longer,” Michelmore said Friday. The company is working with government, regional and community leaders to keep the mine in operation, he said.

MMG, owned by China Minmetals Corp., bought the deposit from Glencore Plc in 2014. The open-pit mine started in December and the company forecasts output will reach 2 million tons annually in the next five years. The road from Las Bambas passes other significant copper operations, Michelmore said, including Antapaccay, Cerro Verde and Constancia, on the way to port.

Truck Dust

“A large portion of Peru’s national wealth, and its largest driver of current growth passes through these regions,” Michelmore said. The company is committed to giving technical, planning and operational support “that is essential to upgrading this road to a national standard,” he said. Farmers in Cotabambas in the Andes mountains blocked the road earlier this month and say dust is polluting their land and homes.

Community leaders demanded Peruvian President Pedro Pablo Kuczynski visit the area to discuss their grievances and refused on Wednesday to speak to a committee led by senior government officials. Cabinet chief Fernando Zavala has said the president won’t visit the area while the protest continues.

“There are no alternate routes currently available,” Jo Lynch, an MMG spokeswoman, said Thursday by e-mail. The company is nonetheless continuing shipments from the port because it has stockpiles there, she said.

Shipments of copper concentrate to China from Peru jumped 94 percent to 2.9 million tons in the first eight months from a year earlier, partly because of the extra supplies from Las Bambas.

To contact the reporters on this story: Martin Ritchie in Shanghai at mritchie14@bloomberg.net, John Quigley in Lima at jquigley8@bloomberg.net. To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, James Poole, Jake Lloyd-Smith