MMG nixes Peru copper mine guidance


Australia-based MMG Ltd is formally withdrawing its 2020 production guidance for the Las Bambas copper mine in Peru, it says, after the South American country extended a state of emergency to contain the spread of coronavirus.

The miner, which is majority owned by state-run China Minmetals Corp, said in a filing to the Hong Kong stock exchange that Las Bambas would continue to operate at reduced levels, but did not provide a new full-year output forecast.

Las Bambas, one of the world’s biggest copper mines, is one of a string of major mining projects to curb production in the wake of the pandemic, which has killed more than 100,000 people worldwide.

However, any resulting supply tightness could be cancelled out by a collapse in metals demand.

MMG had on March 4 guided for production of 350,000-370,000 tonnes of copper in concentrate at Las Bambas this year – nearly 2 per cent of the world’s projected mine supply for 2020 – before saying on March 19 it had temporarily reduced operations at the mine due to the initial state of emergency.

Reuters reported last Thursday that MMG had declared force majeure – a clause invoked when companies cannot meet contractual obligations due to circumstances beyond their control – on concentrate shipments from Las Bambas after Peru extended its state of emergency to April 26..

“As a result of this extension, Las Bambas will continue to operate, consistent with national guidelines and company health protections, at reduced levels of mining and production,” MMG said in the filing.

“The transport of concentrates has been suspended, and the movement of people and critical supplies will also continue to be significantly restricted,” it added.

Last year, Las Bambas produced 382,518 tonnes of copper concentrate, lower than planned due to road blockades by local communities. This year’s guidance was lower due to declining ore grades.

Elsewhere, MMG said its operations have largely continued as normal at its mines in Australia and the Democratic Republic of Congo, where the company “at this stage continues to maintain existing 2020 guidance”.

“To date, no COVID-19 cases have been identified at any MMG operation,” it added, referring to the disease caused by the new coronavirus.

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