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Protests in Peru are threatening to choke
off access to almost $4-billion worth of copper just as China’s emergence from
Covid lockdowns promises to boost demand.
Peru’s third-largest copper mine, Las
Bambas, hasn’t dispatched copper concentrate since January 3 due to security
concerns. Glencore's Antapaccay is also facing restrictions. The mines, which
share the same highway access to ports, together account for nearly 2% of the
world’s copper output.
Unrest has rattled Peru since the ouster and
arrest of former President Pedro Castillo, upending commodity supply chains
from metals to organic coffee. The disruption comes at a particularly
precarious moment for copper markets. Inventories stand at historically low
levels while miners warn demand for the world’s most critical metal is poised
to skyrocket with the growing electrification of vehicles.
Base-metal prices have been on a bull run
since New Year’s after China, a top consumer, abruptly abandoned Covid-19
controls. Prices settled Wednesday at a seven-month high on the London Metal
Exchange. Goldman Sachs Group predicts ongoing deficits and forecast a record
price of $11 000 a ton within 12 months.
Las Bambas, whose operator MMG is
controlled by state-owned China Minmetals, has been the target of multiple
demonstrations since it opened in 2016 as indigenous groups seek greater
compensation for land and roads used by mining companies.