MMG warns Peru election poses risk to Las Bambas copper mine

Peru’s presidential election next April could raise the risk of more protests affecting MMG Ltd.’s flagship Las Bambas copper mine, chief executive officer Zhao Jing Ivo said during an earnings call on Wednesday.

Las Bambas is Peru’s largest copper mine and the Chinese company’s cornerstone asset, but its operations have been dogged by years of sporadic social unrest — sometimes tied to political tensions in the Andean nation.

“In the run-up to the presidential election in April next year, the risk of protest actions could increase,” Zhao said on an earnings call on Wednesday.

The most serious disruption at Las Bambas was in 2022 — a year of political turmoil in Peru — when the mine halted output for more than 50 days after protesters occupied the site. Current President Dina Boluarte is due to hand over power after the vote next year.

MMG’s shares pared gains Thursday after rallying more than 10% on Wednesday on a jump in first-half net income to $340 million, from $21.1 million a year earlier.

The company is still clearing out inventories after road blockades by informal miners last month interrupted some shipments of semi-processed copper from the mine. There has been no formal agreement between those protestors and the government, so there is still a risk of further disruptions in the second half of the year, Zhao said.

Still, Las Bambas operated at full capacity throughout the recent disruption, Zhao said, and output guidance for this year was unchanged at between 360,000 tons and 400,000 tons. The upper end of the range assumes “stable operating conditions and limited external disruptions,” MMG said in a statement.

Since the major outage in 2022, MMG has worked to build a relationship with the local communities, including artisanal miners, and this has prevented similar events, Zhao said.

(By Paul-Alain Hunt)