Brazil Miners Sign for Delivery of Pain from Truck Strike

- May 30th, 2018

Roadblocks around Brazil have bitten miners, with delays in shipments to ports leading to disruptions in production.

Latin America’s largest country has ground to a halt, with truck drivers creating hundreds of roadblocks around Brazil to protest rising fuel costs.

Deliveries through road transport are simply not happening, and miners are amongst those feeling the pain as the logistical nightmare cascades through the economy.

Australian miner Avanco Copper (ASX:AVB) revealed on Tuesday (May 30) that it will be scaling back all activities at its flagship Antas copper-gold mine because of the roadblocks.

“All Antas site activities are being scaled back to conserve fuel without compromising safety,” said the company. “This includes suspending plant operations and most mining activities.”

The company currently has a month’s supply of run-of-mine ore stockpiled, but due to the issues it’s having making deliveries to the port it has decided to ease off on production.

“(Avanco) confirms that delays in the delivery of fuel and other consumables to the Antas Mine and Pantera (an exploration project) are being experienced. Roadblocks on highways are preventing the dispatch of copper concentrate to the port,” the firm said.

The company hopes the protests will come to a halt soon; in its release, Avanco says it will be able to make up for any “short-term production disruptions.” The strike has been ongoing for over a week now.

The Antas mine is located in Pará State in Northeast Brazil, 25 kilometers southeast of Parauapebas, which is described as a mining-friendly city in the Carajás, a mineral-rich area.

Under normal circumstances, 40 containers of copper concentrate are delivered weekly from Antas to the port of Vila do Conde for sailings to Asia, where the company ships to customers in China.

The company has the cash to pay creditors now, but says that it is too early to know if operating costs and production guidance for 2018 will have to be recalculated.

Antas produced 3,016 tonnes of copper concentrate in Q1 2018, and its 2018 guidance is set at 12,000 to 13,000 tonnes. The company has said it is ready to get back to work as soon as the situation improves, noting that because the site sources power from the national grid it could come back online quickly.

So far efforts by Brazilian president Michel Temer to placate the trucker unions have achieved little. The country remains at a standstill, with shortages of vital supplies hitting every sector of the economy.

Unions are demanding a cut to tolls on trucks and minimum freight rates.

Avanco’s shares on the Australian Securities Exchange didn’t move much with the news, and even climbed 3.03 percent to AU$0.17.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

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