Peru protests snarl supply routes to key mines, industry body says

LIMA/SANTIAGO, Dec 14 (Reuters) - A wave of political protests in Peru related to the ouster of former leader Pedro Castillo is affecting supply routes to key copper mines in the Andean nation, the world's no. 2 producer of the red metal, raising a potential risk to production.

Protesters have blocked highways around the country, especially in mining regions in the south, since Castillo's removal from office and arrest last week.

The latest blockades have hit important mining roads, affecting supplies to copper deposits such as MMG Ltd's (1208.HK) huge Las Bambas mine, which supplies some 2% of global copper. A source at the mine said those blockades remained on Wednesday.

The blockades "are causing major setbacks to mining operations that have been affected in terms of the supply of goods and food, and in the replacement of personnel and transportation of output," Peru's National Society of Mining, Oil and Energy, which represents companies in the sector, said on Wednesday.

Protesters are demanding early elections, a referendum for a new constitution and the release of Castillo, currently in detention while being investigated for the alleged crimes of rebellion and conspiracy after trying to shutter Congress.

Castillo, who won election in 2021 on the back of strong support in poorer rural and mining regions, denies the charges and says Congress removed him illegally. He was replaced by former vice president Dina Boluarte.

Peru's mining sector has been hit by regular protests over recent years, including road blockades, which grew bolder under Castillo who had pledged to redistribute mining wealth, though never fully managed to fulfill on his promise.

Anglo American (AAL.L) told Reuters its Quellaveco mine was still "operating normally," while BHP (BHP.AX), which partners with Glencore (GLEN.L) on the huge Antamina deposit, did not immediately respond to a request for comment.

The government declared a state of emergency in the entire country on Wednesday, a rare move to quell protests, which allows the armed forces to assist police and curtails certain civil liberties including the right to assembly.

Brokerage Jefferies said in a note to clients that protests and rising uncertainty could ultimately hit copper production.

"The ongoing geopolitical unrest in Peru may significantly affect the volumes of existing mines in the country, as well as increase the risk of investing there," Jefferies said.

"Higher risk means less investment, less supply over time and a higher copper price."

Reporting by Fabián Andrés Cambero and Marco Aquino, Editing by Rosalba O'Brien

Our Standards: The Thomson Reuters Trust Principles.