Categories: General Market Commentary
Topics: General Market Commentary

Peru mine output stranded after rains disrupt rail shipments

March 21, 2017

Peru mine output stranded after rains disrupt rail shipments

Heavy rains in Peru have disrupted train transport of minerals from the country's central region to the Pacific Coast, and the train line could take at least 15 days to fix, Vice President and Transport Minister Martin Vizcarra said on Monday.

The government is coordinating with mining companies to find alternative routes, Vizcarra said. The intense floods have killed more than 70 people and destroyed tens of thousands of homes since the start of the rainy season.

Central Peru accounts for at least one-fifth of Peru's metals production, according to the National Society of Mining, Petroleum and Energy (SNMPE), an industry group. Peru is the world's second-largest copper producer, the third-largest zinc and silver producer and the sixth-largest gold producer.

The region is home to Chinalco Mining Corp's <3668.HZ> 300,000 tonne-per-year Toromocho copper mine, a zinc and silver mine owned by Volcan Compania Minera <VOL_pb.LM> and some precious metals mines owned by Compania de Minas Buenaventura <BUE.LM> <BVN.N>.

An SNMPE spokesman said warehouses at Peru's El Callao port had enough supplies to fulfill companies' commitments for up to 30 days.

Alvaro Barrenechea, director of corporate affairs at Chinalco's Peruvian affiliate, said the company would be affected if the railway does not re-open within a month.

"I expect the situation will improve in 10 days," he said. Speaking to local radio station RPP, Vizcarra said at least one kilometer of the rail line that links the center of the country with the coast was destroyed by flooding from the Rimac river in the outskirts of Lima.

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