The copper price rose on Wednesday as supply concerns resurfaced in Peru, the world’s second-biggest producer of the metal after neighboring Chile.
Copper for delivery in May rose 2.6% from Monday’s settlement price, touching $4.633 per pound ($10,192 per tonne).
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Operations at Southern Copper’s Cuajone mine in Peru have been suspended for 15 days as locals continue to block the company’s access to a water reservoir and other key supplies.
The blockade began on February 28, when Southern Copper made the decision to replace a 50-year-old water pipe that supplies nearby communities.
The company said on Wednesday it plans to import copper concentrate potentially from as far away as Mexico for its refinery in Peru.
Raúl Jacob, the company’s vice president of finance, said this would imply an increase in costs and a decrease in profits for this year.
Southern Copper, controlled by Grupo México, has a smelter in the Peruvian town of Ilo and operates the Cuajone and Toquepala mines in the south. It also operates the La Caridad and Buenavista deposits in Mexico.
Southern Copper produced about 400,000 tonnes of copper concentrate in Peru last year, according to government data.
“This is going to drive up costs, for sure,” Jacob said. When asked if this would also impact profits for the year, he said it would because “every day that passes the company is going to be prevented from selling some $4.8 million.”
The protesters are demanding compensation of $5 billion for the use of their land and a 5% share of the company’s profits. The company says it has full land-use rights and that the protest is illegal.
Jacob said he hoped authorities would intervene to put an end to the conflict, claiming that the protest, along with others hitting MMG’s huge Las Bambas copper mine was affecting 20% of the country’s copper production.
(With files from Reuters)