Red metals reach the red: Peruvian protests impact the global copper supply
As the world gears up to mitigate the far-reaching effects of climate change—many of which are already being felt—investment into zero-emission technologies is growing to complement more than 70 countries’ mid-century net-zero emission targets. Copper will be a key component to energy-efficient technologies, including electric vehicles, charging infrastructure, solar PV, wind, and batteries. For this reason, copper demand is projected to double over the next 10 years and more than triple by 2050; but this may have detrimental social, political, and economic impacts on the surrounding contexts of copper mines, which may, in turn, have repercussions on the global supply and cost of copper.
Peru, for instance, holds the world’s second largest reserve of copper, which contributes to 4% of Peru’s entire GDP; however, local communities that live around the Apurímac-Cusco-Arequipa Road mining corridor continue to be the poorest in Peru. The mining industry has foregone environmental and health restrictions, while increasing inequality in mining districts, thus contributing to existing socioeconomic tensions among local Peruvian communities, for instance against the Antapaccay mine in Espinar, the Las Bambas mine in Cotabambas, and the Cuajone mine in Moquegua. Such enmities have been exacerbated in the ongoing political crisis in Peru that began in December 2022.
The past five decades in Peru were foundational to the country’s current political crisis. Insurgency during the 1970s, multiple dictatorships, and resulting economic instability generated political and social strife, which collectively exploded upon President Castillo’s impeachment after he attempted to install an emergency government and rule by decree in December 2022.
Castillo is highly supported by Peru’s rural populations, many of whom live in the surrounding areas of copper mines, as he denounced foreign mining corporations and their negligence of environmental regulations, promised higher taxes and wealth redistribution policies, safer working conditions for miners, and nationalisation of the entire mining industry.
After Castillo’s removal, political tensions among local miner communities—as well as much of Peru’s left-wing population—rose, leading to worker strikes, protests against mines, and disruption of mining operations. This includes ceasing operations at the Las Bambas mine, which alone supplies 2% the world’s copper. The Antapaccay mine stopped production in mid-January, but has since resumed. Continued nationwide protests threaten to cut access to $4 billion worth of red metal, including copper. In 2022, growth potential of mining GDP from 2.9% to 0.3%, due to social unrest.
To re-establish the export of copper from Peru, mining companies such as Glencore, MMG Limited, and Freeport-McMoRan must enter into agreements with local communities, in conjunction with the newly formed government led by Dina Boluarte. The mining industry should address grievances in a manner that reduces poverty, prevents environmental and health impacts, and allows for inclusive employment of the surrounding communities.