Instability in the Andes

Peru's political crisis cuts off access to 2% of the world's much-needed copper supply

Global copper prices likely to rise as protests shut down Peruvian mines.
Protestors have said they will not stop their daily demonstrations until former president Pedro Castillo has been released from jail.
Protestors have said they will not stop their daily demonstrations until former president Pedro Castillo has been released from jail.
Photo: Stringer (Reuters)
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The Chinese-owned Las Bambas mine in Peru, responsible for close to 2% of the world’s copper production, officially halted production on Feb. 1 after months of blockades and protests made continued operations impossible.

MMG Ltd., the owner of the mine, announced it would cease all activity and transition to care and maintenance after the series of forced temporary closures. The political unrest has left about 30% of Peru’s copper production at risk, according to a Peruvian mining association.

Near-continuous protests have rocked Peru since early December when the National Assembly removed populist president Pedro Castillo from power after he tried to dissolve the legislative body to avoid impeachment proceedings.

Castillo aggressively denounced multinational corporations during his campaign and pledged to nationalize large swaths of the mining industry. So his removal sparked outrage in mining communitieswho say they work in unsafe conditions for low wages — causing mass work stoppages and putting the future of mineral extraction in the country in jeopardy.

As the unrest chokes off supply, the global price of copper will likely increase, especially given the current need for metal in the production of electric vehicles. A study by S&P Global found that the proliferation of net-zero emissions goals could more than double the demand for copper by 2035.

Peru’s mining sector, by the numbers

#2: Peru is the second-largest producer of copper and silver in the world.

$40.3 million: The export value of Peru’s mining sector, accounting for almost two-thirds of the value of all Peru’s exports.

30%: Chinese firms account for almost a third of Peru’s total mining investment portfolio.

Congress says no to expedited elections

An election might calm tensions and re-open mines, but Peru’s National Assembly again voted on Feb. 1 not to move presidential elections from their scheduled date in 2026 to this year, despite calls from the country’s current president, Dina Boluarte, who was the second in command under Castillo.

“I regret that Congress has not reached the necessary consensus to advance elections,” Boluarte said on the presidential Twitter account. “We will immediately present a bill so Peruvians can democratically elect their authorities in 2023.”

The Assembly agreed to move elections to the spring of 2024 after lawmakers originally removed Castillo from power. But this was not sufficient for protestors, who have called for immediate elections.

In a poll conducted earlier this week, Boluarte’s approval rating sank to 17%, lower than Castillo’s when he was removed from power. But even that is better than the National Assembly, which the same poll found enjoys approval from just 7% of the country.

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