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Access to Almost 2% of Global Copper Supply Under Threat Over Peru Unrest

© AFP 2023 / DENIS MAYHUAAerial view of the copper concentrate plant of the Mining Society of Cerro Verde, in Yarabamba, Arequipa, in southern Peru.
Aerial view of the copper concentrate plant of the Mining Society of Cerro Verde, in Yarabamba, Arequipa, in southern Peru. - Sputnik International, 1920, 21.01.2023
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Peru has been gripped by a wave of political and social unrest sweeping the country, denouncing the government of President Dina Boluarte, in place after the impeachment of former President Pedro Castillo on December 7, 2022. Demonstrators have called for an immediate presidential election and the dissolution of the country's parliament.
Almost $4 billion worth of copper may not find its way to markets as unrest continues to sweep Peru, prompting security restrictions and upending supply chains.
Loss of nearly 2 percent of the world’s copper output churned out by two of Peru's largest mines - Glencore's Antapaccay copper mine, and Las Bambas, operated by MMG Ltd. - would come as inventory levels of this critical metal have been dropping to historical lows across the world. Copper is a crucial input metal in a number of industries, used in everything from wind turbines and electric wires to electric vehicles.
© AP Photo / Nardus EngelbrechtWind turbines are seen at the Gouda Wind Farm located 115 km north east of Cape Town, South Africa, Monday, Nov. 7, 2022. The wind farm is one of the biggest in Southern Africa.
Wind turbines are seen at the Gouda Wind Farm located 115 km north east of Cape Town, South Africa, Monday, Nov. 7, 2022. The wind farm is one of the biggest in Southern Africa. - Sputnik International, 1920, 21.01.2023
Wind turbines are seen at the Gouda Wind Farm located 115 km north east of Cape Town, South Africa, Monday, Nov. 7, 2022. The wind farm is one of the biggest in Southern Africa.
In southern Peru, Glencore's mine, which employs 2,400 workers, suspended operations on January 20 after protesters attacked the premises for the third time in January. The infiltrators torched the workers' area of the camp and began looting, demanding the mine cease its operations and join the demonstrators' call for President Dina Boluarte's resignation, Glencore said in a statement. According to the country's Energy and Mines Ministry, Antapaccay represents around 6 percent of Peruvian copper production, or 135,987t between January and November 2022. It accounts for 8 percent of total red metal exports.
However, the currently raging unrest has forced the mine to operate at 38 percent of its workforce, the company added.
© AFP 2023 / FABRICE COFFRINIHeadquarters of Swiss commodity trading giant Glencore.
Headquarters of Swiss commodity trading giant Glencore. - Sputnik International, 1920, 21.01.2023
Headquarters of Swiss commodity trading giant Glencore.
The Antapaccay mine, as well as Las Bambas - Peru’s third-largest copper mine - operates on the southern mining corridor and share highway access to ports. Restrictions have plagued both mines, with Las Bambas failing to dispatch any copper concentrate since January 3. MG Ltd’s Las Bambas put operations on hold on January 13 over the violent turmoil, with Erick Ramos Luna, union leader, explaining the decision by the need to keep workers safe from violence.
MMG Ltd. is controlled by state-owned China Minmetals Corp., and its Las Bambas facility, launched in 2016, has been targeted continuously by demonstrations. Indigenous groups have been demanding more compensation for land and roads used by mining companies.
© Photo : TwitterScreenshot of Twitter account of Peruvian Ministry of Energy and Mines.
Screenshot of Twitter account of  Peruvian Ministry of Energy and Mines. - Sputnik International, 1920, 21.01.2023
Screenshot of Twitter account of Peruvian Ministry of Energy and Mines.
Upended supply chains in Peru - the world’s second-largest copper producer - come at a time when there is boosted demand for the metal. First of all, copper is crucial to all energy transition plans currently embraced by many governments amid the energy crisis and its surging oil and gas bills. However, since the mid-2020s, analysts have been warning of the potential supply-demand gap feeding into a huge deficit of copper, driven by rising demand for the metal in wind and solar farms, electric vehicle (EV) production, etc.
A building burns amid anti-government protests in downtown Lima, Peru, Thursday, January 19, 2023.  - Sputnik International, 1920, 20.01.2023
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Fire and Fury: Protesters Rage in Peru
Limited supply in the market has been driving a surge in copper prices. Furthermore, experts such as Wood Mackenzie global research and consultancy group have been warning that about 9.7 million tonnes of new copper will be needed in the next decade. However, there are growing concerns that many projects expected to account for this new copper supply have often failed to obtain needed investment or environmental permits.
Accordingly, investors forcast that the copper market may well see a deficit by the end of the decade.
Police in riot gear block a street as a building burns behind them after a day a day of clashes with anti-government protesters in Lima, Peru, Thursday, Jan. 19, 2023. Protesters are seeking immediate elections, Boluarte's resignation, the release of ousted President Pedro Castillo and justice for protesters killed in clashes with police. - Sputnik International, 1920, 20.01.2023
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