• A Chinese-owned mining company considered that 2022 was the lowest year for copper concentrate production and expects to solve an encroachment problem in order to start up the Chalcobamba project.

According to Alvaro Ossio, CFO of MMG Las Bambas, since last March 11, the mining company has been operating uninterruptedly with the transportation of copper concentrate, inputs and personnel; however, as a result of the social conflicts that have occurred around its area of operations, it has accumulated 68 days of blockades so far this year, 173 days of blockades in 2022 and 661 days of blockades since it began operations in 2016.

"Each day of lost exports represents US$ 9.5 million dollars, which in revenue is S/. 5.2 million soles in royalties and income tax. More than half of the total collected, i.e. S/. 3.2 million, is distributed among the regional government, local municipalities and two universities. With Las Bambas paralyzed, the company, the communities and the State lose," he emphasized at Road to PERUMIN, where the challenges of social conflict management were discussed.

In his words, 2022 was the year of lowest production of Las Bambas, since it produced 254 thousand tons of copper concentrate, a volume 45% lower than the average production of 400 thousand tons; having been decisive for the GDP of Apurimac to decrease by 7.4 percentage points, considered the highest drop at a regional economic level in Peru; and causing the GDP of the region to be 15% below the pre-pandemic level.

"After our activities started 6 years ago, Apurimac experienced a GDP growth of 141% and positioned itself among the first 8 departments with the highest GDP per capita, being four times higher than the public budget per capita compared to the rest of the country. With all this, we are witnessing the beneficial impact of the mining sector, but also the counterproductive blows of social conflicts," the executive reflected.

Despite the stoppage of its operations during all this time, Álvaro Ossio highlighted that, to date, Las Bambas has contributed more than S/. 1.74 billion in royalties and more than S/. 6.8 billion in taxes, created direct and indirect jobs for 8,800 people, benefited more than 75,000 people in an induced way, purchased more than S/. 1.5 billion in goods and services produced in Apurímac and Cusco, and more than S/. 4.1 billion in the whole country.

"Within the portfolio of mining projects with a combined investment of US$ $53 billion, the Chalcobamba project stands out, which is our second pit, which is ready to be exploited and thus recover production levels close to 400 thousand tons of copper concentrate. However, it cannot be put into operation today due to a problem of illegal encroachment on our concessions, which we hope can be resolved soon," he said.

Finally, the CFO of Las Bambas argued that, although works for taxes and productive strengthening programs are good tools to contribute to the sustainable development of communities, they are not sufficient to guarantee the correct execution of the local public budget financed in large part with mining transfers, especially when the authorities have little capacity to manage these funds or are prone to corruption.

"Works for taxes and programs are important, but they are not enough. It is necessary to improve the management of these funds collected from royalties and the mining canon. This management improvement must be achieved through the participation of the private sector, and the mining companies. Clearly, it is the only way to make efficient use, improve the quality of life and close the gaps. Because if this investment portfolio is developed, the benefit is enormous," he said