All eyes in the copper world have been on stoppages at the Escondida, Chile and Grasberg, Indonesia mega-mines this past week.
But elsewhere, other concerning events are emerging for copper supply.
The major Las Bambas mine in Peru, for example, had another flare up of community protests. Which forced the operation to shut down for several days as locals blocked access roads — which were only reopened last week after the Peru government declared a state of emergency here.
And the world’s top copper-producing nation Chile also had tough news for copper miners. With yet another mine in the country being shut down, on issues between the operator and national regulators.
That’s the El Soldado copper mine, run by Anglo American. An operation that’s been in business for years, and was running toward the end of its productive life under the current mine plan.
Anglo American had come up with a plan for a redesigned mining operation — which would keep El Soldado in production, and prevent a full stoppage.
But reports emerged late last week that Chilean regulators have refused to endorse Anglo’s redesign. With Reuters first citing sources in the government as saying that the application had been rejected.
Officials from Anglo confirmed Friday that the plan has been turned down by national regulator Sernageomin. Prompting the company to take drastic action: shutting down the mine completely. Related: Record High Oil Inventories Crush Hopes For $70 Oil
Anglo said that it now plans to “immediately and temporarily suspend mine operations” at El Soldado. With the company saying it will examine options including appealing the Sernageomin decision, or submitting a new plan for the mine redesign.
The direct effect on the copper market won’t be enormous — with El Soldado producing a modest 36,000 tonnes of copper yearly. But it is one more operation lost at a time when supply concerns in the global sector are running high.
The move is also another warning sign for the Chilean mining sector in general. Where regulators have been active lately in intervening at operations around the country — including laying serious environmental charges against key producers Antofagasta and Kinross Gold.
Watch for the next actions from Anglo American, and for the reaction from the government. This could be yet another signal of looming problems for miners in this critical region.
Here’s to going back to the drawing board.
By Dave Forest
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