Copper snags in Peru highlight rising clout of informal miners
Copper transport disruptions this week in Peru underscore the growing impact of informal mining on global mining corporations that operate in the Andean nation.
Frustrated by regulatory restrictions and red tape, thousands of small-scale gold and copper miners in Peru are staging protests, including roadblocks that are directly blocking flows of semi-processed copper from at least two key mines to their shipping port. Peru is the world’s third-largest supplier of the wiring metal.
The mines - MMG’s Las Bambas and Hudbay Minerals’s Constancia - have been frequently impacted by protests along Peru’s southern mining corridor. But typically the protests have been staged by communities seeking greater benefit from big mining companies. Las Bambas, for example, has experienced hundreds of days of road blockades over the past decade.
But Las Bambas hasn’t seen many protests like the ones this week, where those behind the current spate of roadblocks are fighting for the right to mine themselves. That is a new trend seen only within the past year.
Rising prices of gold and copper have boosted informal activity in Peru as more residents turn from subsistence farming to artisanal mining — mainly on concessions held by large companies. That’s threatening the development of the next generation of giant deposits, the industry warns, as well as adding risk to a global supply already hit by disruptions from Panama to the Democratic Republic of the Congo.
Besides the regulatory and legislative demands, this week’s protests show the emergence of informal miners as a social and political force, as leaders jostle to play a role in upcoming elections, according to Ivan Arenas, a Peruvian political analyst and specialist in mining and public policy.
“There are two main drivers here — the growth of informal activity as metal prices rise, and the elections,” he said.
Protests are taking place across the Andean nation. But Las Bambas and Hudbay Minerals's Constancia are the main copper mines impacted, said people briefed on the matter, asking not to be identified as they’re not authorized to speak publicly.
Disruptions are limited to transport, with no reports of protests affecting production on site. That may change if mines are starved of supplies needed to operate or they run out of storage space. A prolonged stoppage would also start to impact shipments to smelters in China and elsewhere.
In Peru, many small-scale miners use a temporary registry called Reinfo, which allows them to operate as they go through the process of formalizing. The program has been extended until year-end and is seen by big mining as a cover for illegal activity. Informal miners are pushing for the registry to drop its restrictions and new legislation designed for artisanal mining.
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