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MMG's 4Q copper production slumps after protests halt operations

Hong Kong Stock Exchange-listed MMG’s copper production slumped in the fourth quarter of 2021 amid frequent protests at its Las Bambas mine in Peru, which led to a two-week suspension of operations in December. The threat of further community intervention remained.

Nathan Richardson
 MMG's Las Bambas mine in Brazil

MMG's Las Bambas mine in Brazil

Las Bambas copper-in-concentrate production in the fourth quarter was 65,349 tonnes, which is down 31% year-on-year and 18% weaker than the September quarter, MMG said. 

Full-year production was 290,097t, which was down 7% from 2020. 

"The final quarter of 2021 presented several challenges which impacted our copper production, most notably the extended community blockade at Las Bambas and lower grades at Kinsevere," MMG's interim CEO, Liangang Li, said. 

"Our focus remains on pursuing constructive and peaceful dialogue with local communities together with the government of Peru," he said. 

Mining trucks were blocked by the communities of the Chumbivilcas province over tensions about the number of jobs and level of social investment from the mine. 

While MMG said the mine returned to full capacity in January, concerns about future impacts remained. 

"Subject to government permits and approvals and community negotiations, development of the Chalcobamba pit at Las Bambas is expected from mid-2022, followed by first production during the second half," MMG said. 

"Dependent on this timing, Las Bambas production for 2022 is expected to be in the range of 300,000 to 320,000t in copper in concentrate," the company said. 

MMG expected C1 costs to be in the range of US$1.30 to $1.40lb "driven by a combination of inflationary pressures and one-off factors", it said. 

"Higher production levels from 2023 onwards will partially mitigate this C1 increase in subsequent years." 

The Kinsevere mine in the Democratic Republic of Congo saw fourth-quarter copper cathode production of 11,223t, which was down 36% year-on-year and was 4% weaker than the September quarter. Full-year production of 48,017t was down 33% year-on-year. For 2022, MMG expected output would be in the range of 45,000-50,000t. 

The Australian Dugald River operation produced 42,869t of zinc in concentrate in the fourth quarter, which was down 18% year-on-year and was 11% weaker quarter-on-quarter. Full-year production rose 1% to 180,313t.

Also in Australia, the Rosebery mine's zinc in concentrate production was 18,529t in fourth quarter, which was up 3% year-on-year and 38% quarter-on-quarter. Full-year Rosebery zinc in concentrate was up 3% year-on-year to 69,454t. 

"Dugald River is expected to produce between 170,000 and 190,000t of zinc in zinc concentrate and Rosebery is expected to produce between 55,000 and 65,000t of zinc in zinc concentrate in 2022," the company said. 

MMG closed trading on January 24 at HK$2.87/share. The price fell to as low as HK$2.30 throughout December, after starting November at HK$3.41. MMG had a market capitalisation of HK$23.75 billion.

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