LIMA, Feb 7 (Reuters) - Mining activity at Peru's massive Las Bambas copper mine, which accounts for 2% of global supply, has started to fall sharply after protesters blocked a key access road late last month, according to unreported power use data and a company source.
The mine, owned by China's MMG Ltd (1208.HK), has been a flashpoint of protests since it started operating in 2016. MMG warned on Monday that it may have to halt operations at the mine by Feb. 20 if the blockade is not lifted. read more
However, electricity demand data for the mine, seen by Reuters, shows that activity already started to plunge on Feb. 2. A company source confirmed it was due to the impact of the blockade on activity at the mine.
Electric demand at the mine has dropped 40% since, according to data from COES, a body that represents companies in Peru's domestic energy sector.
"The data does indeed show lower consumption," said Gonzalo Tamayo, a former mining minister and partner at consultancy Macroconsult. "It's a preview of what could happen if the blockade continues."
The source from Las Bambas who asked not to be named said the fall in electric demand was due to a "progressive winding down of operations" since the blockade started on Jan. 27. Las Bambas declined to comment.
The swift fall in electricity demand underscores how sensitive a mine like Las Bambas is to road blockades, which have increasingly become a tool of local communities looking to pressure mining firms to make payouts or create local jobs.
That has mushroomed under leftist President Pedro Castillo who came to power in July last year pledging to redistribute the country's mineral riches. read more
The hit to production, if unresolved, could hit MMG's 2022 projections for Las Bambas to produce 300,000-320,000 tonnes of copper concentrate.
The mining corridor highway has become a target of protest.
Since the mine opened in 2016, residents have blocked it for over 400 days, complaining that copper trucks pollute their crops and kill their animals and that the mine does not contribute financially to local communities' well-being.
The current blockade is taking place at the Ccapacmarca district in the province of Chumbivilcas, were residents are demanding the presence of Castillo and financial contributions from Las Bambas.
Former Prime Minister Mirtha Vasquez failed to reach an agreement after traveling to Ccapacmarca in mid-January, which triggered the current blockade. Vasquez recently resigned, leaving a political vacuum and stoking crisis in the government.
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Reporting by Marcelo Rochabrun in Lima
Editing by Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
