Copper price rising after Chile quake

SANTIAGO–Major copper mines slowly resumed operations on Sunday after central Chile suffered an earthquake that limited power supplies, which analysts fear could curtail exports by the No. 1 producer.

Ricardo Alvarez, manager at Chile's fourth-largest mine, El Teniente, said the recovery pace of output would depend on the electricity supply, which was partial.

Alvarez said the mine could slow extraction if power lags.

Copper prices surged in early trading Monday on supply worries caused by the 8.8 quake in Chile, jumping 5.6 per cent on the London Metal Exchange.

The tremor killed hundreds, with death tolls climbing, most of them south of the northern mine zone that forced Codelco to shut El Teniente and its Andina copper mine.

Production resumed at Anglo-American Los Bronces copper mine, union leader Eduardo Rocco said.

An Anglo American spokesman said there were no initial reports of major damage at the two mines, which together produce some 280,000 tonnes a year.

Chile's biggest mines produce a third of the world's copper.

Analysts feared supply disruptions from mid-sized deposits nearer Santiago would stoke prices.

Anglo American and Codelco halted output at four mines in total

Source:thestar.com/

Chile Copper Mines Shut for Second Day After Quake Cuts Power

Feb. 28 (Bloomberg) -- Chilean copper mines accounting for about 16 percent of the nation’s output were halted for a second day after a magnitude-8.8 earthquake cut electricity to the plants and damaged installations.

Codelco, the world’s biggest copper producer, said its Andina mine suffered power losses and installations were damaged by a five-ton boulder. The mine could reopen “in the coming” hours, said a spokesman for the state-owned producer, who declined to be quoted, citing company policy. El Teniente, the world’s biggest underground copper mine, also remains closed.

More than 50 aftershocks followed yesterday’s pre-dawn quake, which was stronger than last month’s temblor in Haiti that killed 300,000. Disruptions to copper mines in Chile, the world’s largest producer, may cause prices to rise when markets open, according to Macquarie Group Ltd. analyst Jim Lennon.

“We see copper as the tightest of the base metal markets,” Lennon said late yesterday in a telephone interview from London. “Even if it’s just 1 percent of global supply that is affected, it would be significant.”

Copper exports made up about half of Chile’s $53 billion of exports last year. Production rose 0.7 percent to 5.4 million metric tons in 2009. Prices more than doubled in the past year as the world economy recovered and demand increased. State-owned Codelco produces about 600,000 tons combined from the El Teniente and Andina operations.

Chuquicamata

Codelco’s mines in northern Chile, including Chuquicamata, are operating normally, said the spokesman. There are no reports of injuries to workers or damage, he said.

ENAP, as Chile’s state oil company, plans to import diesel fuel to ensure domestic supply after shutting the two refineries, according to an e-mailed statement.

Copper mines in northern Chile operated by BHP Billiton Ltd. weren’t affected by the earthquake that shook the country today, company spokesman Mauro Valdes said yesterday.

Rio Tinto Group, a shareholder in the world’s largest copper mine, Escondida, located in northern Chile and owned by BHP Billiton Ltd., also had no reports of damage, London-based spokeswoman Christina Mills said by telephone.

Empresa Nacional de Petroleo’s halted Aconcagua oil refinery may be fixed within six days, while the state oil company’s Bio Bio unit will take longer to resume operations, Mining Minister Santiago Gonzales said yesterday. He didn’t say how long it would take to restart the mines.

ENAP, as Chile’s state oil company is known, plans to import diesel fuel to ensure domestic supply after shutting the two refineries, according to an e-mailed statement.

--With reporting by Heather Walsh in Colombia, Steve Bodzin in Caracas and Sebastian Boyd in Santiago. Editors: Dale Crofts, Theo Mullen

Source:businessweek.com/