Hochschild Mining is set to suspend operations at its Arcata silver mine located in south-west Peru.
The company’s latest move is due to a low silver price that left it with no option but to suspend production.
Full maintenance of the Arcata mine is expected to be in effect by the second quarter of this year.
Hochschild plans to continue an exploration programme. It will carry out a review of the market conditions for the potential resumption of operations in the future.
The Arcata unit has already been fully impaired for accounting purposes.
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Hochschild Mining CEO Ignacio Bustamante said: “This decision has been expected but is still disappointing for the organisation. Arcata was the company’s first mining operation and started producing in 1964.
“It has been an excellent operation with an outstanding workforce and supportive communities but the continuing low silver price over some years and current geological conditions leave us no option.”
The company has already started making the necessary preparations and plans to mitigate the impact as well as manage the staged shutdown of operations by working with its employees and key contractors.
Located around 300km from the city of Arequipa on a 47,000ha site, the Arcata mine is a 100%-owned underground operation.
Hochschild started developing and preparing the Arcata mine in 1961. The company operates three mines in southern Peru and one in southern Argentina. All its underground operations are epithermal vein mines.