Hudbay halts Constancia mine amid Peru protests

Hudbay Minerals (TSX, NYSE: HBM) has temporarily shut down its Constancia mine in southern Peru in response to local protests and illegal blockades that have escalated amid wider unrest across the country.

The Toronto-based company said on Tuesday the disruption will not affect its ability to meet 2025 production and cost forecasts, while it wasn’t immediately clear when a restart might occur. The company plans to use the downtime to carry out preventative mill maintenance and advance other planned work scheduled for later in the year.

BMO Capital Markets said on Wednesday Hudbay has experienced lower disruption risk than some of its peers, such as MMG and Glencore (LSE: GLEN), during its time in the region since 2011.

“Some media reports have suggested the local community of Uchuccarcco at Constancia is concerned about water and land disruption and is seeking a meeting with Hudbay’s CEO, and rejected the idea that the disruption is politically related,” BMO mining analyst Matthew Murphy said in a note. “However, Peru’s mining industry has at times been targeted by protestors to send a message to the government in Lima.”

Shares in Hudbay Minerals fell 5.7% on Tuesday to $18.59 apiece in Toronto, valuing the company at $7.38 billion.

Blockades

The southern mining corridor has been a flashpoint for Peru’s resource sector, with past blockades disrupting operations at MMG’s Las Bambas and Glencore’s Antapaccay mines. Communities have frequently raised concerns about water use, land disruption, and how mining revenues are distributed, making the region politically sensitive for copper producers.

In 2024, Hudbay’s Peru operations including Constancia and related operations produced 99,001 tonnes of copper, along with 98,226 oz. of gold and 1,323 tonnes of molybdenum.

While the Constancia mill had continued operating through the weekend, Hudbay said on Tuesday it was halted “as a safety precaution and to allow time for the authorities to address the illegal protests.” The safety of personnel is the company’s top priority and it has demobilized non-essential workers, Hudbay said.

Periodic unrest

It also noted that social protests “happen from time to time in Peru” and emphasized its long-term engagement with local stakeholders since Constancia’s 2014 start.

“After a period of heightened social pressures over the past few months, the situation has escalated over the weekend with riots in Lima and several protests across the country,” the company said in its release. “Hudbay will continue to collaborate with government and legal authorities to engage with the protestors to achieve a prompt resolution that will allow operations to return to normal as soon as possible.”

Hudbay completed major stripping at the Pampacancha satellite pit in the second quarter and expects higher grades from that deposit through early 2026, which could help mitigate the effects of the disruption.