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Copper price drops to April lows as market loses momentum

Members of the Nueva Fuerabamba community at a town hall held at Las Bambas. Photo by the Ministers Cabinet of Peru.

The copper price edged lower on Wednesday despite fears of supply disruption at Las Bambas mine in Peru amid ongoing labour strikes in top producer Chile.

Copper for delivery in September fell 2.7% from Tuesday’s settlement price, touching $4.0985 per pound ($9,035 per tonne) on the Comex market in New York. If the metal were to close at these levels it would be the lowest since mid-April.

Click here for an interactive chart of copper prices

Residents near MMG’s Las Bambas mine have blocked a road used to transport the metal after a two-week truce, community leaders said on Tuesday. Last month, a four-day-long blockade disrupted operations of the mine, which produces about 400,000 tonnes of copper a year. 

Strikes began last week at the Caserones and Andina mines in Chile while Teck suspended Highland Valley operations in Canada due to wildfire risk before announcing a resumption today.

Despite the supply risk, the copper price has been weighed down by possible policy tightening in some major economies and rising global coronavirus cases, which could drag on recovery.

Top consumer China announced this week that its refined copper imports fell for the fourth straight month in July, adding to the sense of lost momentum.

New government

Peru’s new socialist government said this week it is working with the mining industry on a new approach to community relations to unlock more of the country’s mineral wealth.

“All companies are happy, so far,” Minister of Energy and Mines Ivan Merino said in an interview Saturday.

“We all agree that all projects must be given a new social face, that we need a new pact.”

The minister’s conciliatory and pragmatic tone may further ease fears stoked by talk in the election campaign of greater state intervention in natural resources that would stifle investment and future output.

Tense relations between mining projects and often isolated rural communities combined with slow permitting have hampered progress in the industry.

Mining comprises 60% of exports from Peru, primarily for the Chinese market.

(With files from Reuters and Bloomberg)