According to media reports, Peru's largest copper mines have been able to maintain production despite more than two months of protests.
Peru, the world's second-largest copper producer, accounts for about 10% of global copper supplies and is a major exporter of zinc and silver. Peru has been rocked by anti-government protests since the ouster of leftist President Castillo on December 7. Highways have been blocked across the country's copper-rich south, threatening production and transport of the metal.
Mining activity is key to keeping global copper supplies stable, and Jefferies said in a Jan. 31 report that about 30 percent of Peru's copper supply was at risk due to the unrest, putting upward pressure on prices.
While the risk of a shutdown is rising, activity at the mines remains close to normal, according to people familiar with the situation. This is backed up by electricity consumption data, with COES data showing that almost all mines are using normal or near normal levels of electricity. COES is the body representing companies in Peru's domestic energy sector, and these data have historically been a reliable indicator of mining activity.
Las Bamba, Peru's third-largest copper mine, for example, had been scheduled to shut down from February 1 after critical supplies could not reach the mine, but has been able to operate at a minimum level after securing last-minute supplies, sources said.
Las Bamba, which normally supplies about 2% of the world's copper, has been subject to blockades for years, and its electricity consumption typically drops sharply during production disruptions. Las Bamba did not face a similar situation during the recent protests.
However, the sources warned that Las Bamba could completely run out of supplies by Wednesday, which would force the mine into care and maintenance mode, when its machinery will consume half of its normal power.
Some mines, including Glencore's Antapaccay and Antamina, which it co-owns with BHP Billiton, have seen temporary drops in electricity use recently, the data show. After a temporary shutdown, Antapaccay reopened on January 31 local time and is now operating at full capacity.
