Peru protests force Las Bambas to stop production after having surpassed 2022 output expectations

Peruvian miner Las Bambas, which is owned by China's MMG, saw production surpass expectations in 2022 but was forced on Wednesday to halt operations due the Andean nation's deep and violent political crisis. 

The company said that protests and blockades had forced the stoppage and that the Las Bambas mine had been placed on care and maintenance. It had warned earlier this month that it could not bring any supplies into the mining camp. 

At the end of last year, the miner had 85,000t of copper stored in inventories as it could not be transported due to the protests.

2022 PRODUCTION

Located in Apurímac region, Las Bambas produced 73,093t of copper in Q4 and 254,836t in the full year. 

In mid-2022, the company adjusted its output forecast after having been forced to halt operations for more than 50 days due to protests. The initial projection was 240,000t and it was later upgraded to 250,000t as it resumed operations.

However, the rebound with output of 153,827t in July-December was not enough to reach 2021 levels. Compared to that year, production was down 12%.

According to the company's results presentation, the third ball mill – an investment announced at the Perumin event – was commissioned in Q4, which helped the mine register the highest quarterly milling throughput since 2020.

CHALCOBAMBA

The future of the new Las Bambas pit – which will expand production capacity to 400,000t/y – remains uncertain. The dialogue with Huancuire, a peasant community that blocks development, was resumed in January but the talks were paused as a result of the protests throughout the territory. Las Bambas was expecting to have Chalcobamba commissioned by the end of 2022.

"We hope to advance with the talks once the social unrest dissipates...reaching a positive, sustainable and lasting agreement is the key to unlocking the next phase of growth through the development of the Chalcobamba deposit," said Liangang Li, interim CEO at Melbourne-based MMG, which is controlled by state-run China Minmetals that owns 62.5% of Las Bambas.

If an agreement is reached, Las Bambas expects pit development to begin in the second half of this year.

2023 OUTLOOK

The Peruvian mining sector has seen a difficult start to 2023 but Las Bambas aims to surpass 2022 with an output of between 265,000t and 305,000t. 

The upbeat forecast is strongly linked to the end of the protests, the resumption of normal operations, and the recovery of the logistics capacity to transport the mineral.