Latin Analysis: Peru’s Copper Strikes
Over June and July, Peru was plagued with protests across the country by informal miners, which involved blockades along copper transport routes to prevent trucks passing from companies such as MMG, Glencore, and Hudbay. According to organizers, this action came about in response to the Peruvian government’s decision to “extend the deadline for regularizing informal mining operations.” These events have had widespread implications for the sector both domestically and across the world, due to Peru’s position as one of the top copper producers globally. Global supply chains were threatened, and Peru’s economy ended up in a precarious position. Although a truce has been called, organizers have emphasized that this may only be temporary, should the authorities not heed the warnings of miners across the country. Given that recent talks between miners and the government have recently broken down, this may just be the beginning of a long story that could throw global copper markets into disarray.
At the heart of these protests is a governmental decision to strive to end the so-called ‘informal’ mining program, which was set up over a decade ago to provide workers with temporary permits. Attempts by the administration to formalize the sector and end these practices have resulted in 50,000 miners being removed from the regulatory program by the Ministry of Energy and Mines in early July. This is another step taken by the government to bring them closer to their goal of formalizing 31,000 informal miners by the end of the year, around 38 per cent of the informal mining workforce. The government claims that 45,000 of the 50,000 that were removed have been inactive within the industry for the last four years, but this claim is refuted by the miners themselves. These workers argue that the formalization process is too complicated, as are the requirements for documentation, given that the goalposts have been constantly changing since 2012 as administrations have changed hands. Despite this resistance from within the sector, the government decided to push on with these formalization efforts, prompting the minors to stage blockades.
Inevitably, blockades along major copper transit routes have affected many key producers, including MMG, Glencore, and Hudbay, who oversee some of Peru’s largest copper mines. As the third largest copper producer in the world, which exports most of this metal to China, the trade of copper and gold constitutes a key pillar of the Peruvian economy, and one of the main income sources in the country. It is estimated that Peru’s metals and mining sector “accounts for 8.5% of the GDP” . The copper industry is also a key target of foreign investment, with $40 billion expected to be allocated to copper projects in the coming years. Understandably then, big companies responsible for overseeing key copper mines were concerned by the events and disruption of the last couple of months, with representatives from MMG and Hudbay meeting with Prime Minister Eduardo Arana on July 10 to warn about the possible impacts of this continued situation for national copper production.
Any notable halts in production puts the country’s economy at great risk, given that Peru relies on this trade to provide a significant portion of its income. For example, in the first quarter of 2025 alone, 30.5% of total exports from Peru were copper shipments. The potential economic impacts of halted copper production became abundantly clear in April 2022, when another round of protests threatened mines across Peru. According to Southern Copper Corp (SCCO.N) in a statement after six weeks of closure, "If we closed for a year, the government would stop receiving more than 3.1 billion soles ($830 million) in taxes and royalties, and 8,000 direct and indirect jobs would be lost.”
As well as domestically, however, these protests also spelt trouble for global supply chains. As one of the world’s biggest producers of this metal, accounting for 12 per cent of global copper production last year, any big reductions in Peru’s production would be a significant blow to the markets and the countries that receive the lion’s share of Peruvian copper. This would especially impact China, which receives 70 per cent of Peru’s copper exports. To the relief of producers and the countries that receive copper exports, the protests have been temporarily called off, allowing companies to return to normal. However, if the government cannot reach an agreement with the miners, further action may be catastrophic for Peru, as well as the states that rely on its copper for their own domestic endeavors.
The current ‘truce’, as announced by protest leader Luis Huaman, came about because of significant pressure from government and mining companies. However, organizers have made clear that this pause is conditional, and very much depends on whether the government agree to address the way they have approached the mining formalization program, which miners argue has put “administrative metrics over practical implementation”. Now, all eyes are on President Boluarte’s government, to see if they will indeed come up with an effective solution to alleviate concerns, simplify this bureaucratic process, and provide tangible support to miners who are working towards formal status.
Talks between the government and the miners appear to have broken down, meaning that it is likely that workers will take to the streets once again. If the government, which is already struggling to hold on to power, fails to reach consensus with the mining sector, serious economic trouble could be coming down the track. This will not only have a catastrophic impact on the country’s finances and the metal sector but could be fatal for Dina Boluarte’s weak grip on power.
