Chinese miner MMG to halt production at Peru’s Las Bambas copper mine amid blockades, stand-off with villagers
- Hong Kong-listed MMG says ‘production is expected to cease on around 20 February’ if the roadblock is not removed
- MMG’s shares fell by as much as 4.6 per cent to HK$2.48 on the news
Chinese mining firm MMG said production at the Las Bambas copper mine in Peru could stop in two weeks’ time, after new roadblocks set up by a local community forced the company to curtail operations.
The Hong Kong-listed company said in an exchange filing on Monday that “production is expected to cease on around 20 February” if the roadblock set up on January 28 by the Ccapacmarca community in Chumbivilcas province continues.
MMG’s shares fell by as much as 4.6 per cent on Monday, before recovering to close 0.8 per cent lower at HK$2.58.
Since its opening in 2016, the Las Bambas project has faced repeated protests as the Chumbivilcas communities – the poorest in Peru – accused the Chinese mining group of failing to provide jobs and money to the region.
In December, the protesters had blocked the roads leading to Las Bambas, forcing MMG to suspend operations for over a month. The Peruvian government reached an agreement with the protesters on December 30 to remove roadblocks and restart operations at the mine.
The community leaders later rejected the proposal and erected new blockades again, which led MMG to make its announcement on Monday.
“MMG remains committed to ensuring the health, safety and security of employees, contractors and the community members involved and actively engaging in transparent and constructive dialogue. The company seeks the immediate removal of the illegal roadblocks,” it said.
As one of the world’s largest copper mines, Las Bambas has an annual throughput capacity of 51.1 million tonnes and its annual production is expected to be between 300,000 to 305,000 tonnes of copper concentrate, according to the company’s website.
The mine is an example of China’s rising interest in overseas mining acquisitions. In 2014, MMG acquired the Las Bambas copper project for US$5.85 billion through a joint venture with its partners Guoxin International Investment and state-owned Citic Metal. MMG holds 62.5 per cent of the joint venture.
The Melbourne-headquartered MMG is backed by Chinese state-owned enterprise China Minmetals, which is MMG’s largest shareholder with a 68 per cent stake.