Copper prices spiked on Wednesday due to fears of a significant supply disruption at the Las Bambas mine in Peru. Las Bambas produces 400,000 tonnes of copper a year and is one of the largest mines in Peru, which is itself the world’s second largest producer of the metal. The disruption fears led three-month copper on the London Metal Exchange to rise 0.8%, to $9,325 a tonne.

This comes after a two-week truce facilitated by newly-elected President Pedro Castillo broke down, with residents near the MMG-owned mine blockading the road used to transport the metal. The mine had already experienced a four-day blockade earlier in the month.

Las Bambas’ location within the more densely populated southern part of Peru, rather than the highlands, had worsened relations with locals due to the need to transport all concentrates along a specific road. This has led to heavy truck traffic in the area, which has led to mineral dust being spread, threatening the local communities’ agriculture.

Communities in the surrounding area demanded that MMG pay them to use a dirt road that goes from the Las Bambas mine and eventually arrives on Peru’s coast, where minerals are loaded on ships. They have claimed that MMG has made little to no effort in brokering a deal that would positively impact local communities, leading to the resumption of the blockade.

Victor Gobitz, president of the Peruvian Institute of Mining Engineers, stated: “To mitigate the disruption caused by protests, we require better infrastructure and to invest in a pipeline that is cost-effective and is better for the communities”.

The new government has stated it has been making a more concerted effort to develop a new approach with miners on community relations. Minister of Energy and Mines Ivan Merino said: “We all agree that all projects must be given a new social face, that we need a new pact.”

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Despite this more pragmatic approach, the local communities seem steadfast in their protest of the mine.

“The communities have decided to restart the road blockage because the company does not want to participate in dialogue to solve the conflict,” said Walter Molina, who represents nearby communities.

Castillo, who has appointed a prime minister who hails from Chumbivilcas, has said that his government will prioritise the welfare of historically marginalised communities. Therefore, this blockade will be the first test of the Castillo presidency on balancing the wants and needs of the mining interests and the local communities that were instrumental in bringing him to power.