UPDATE 2-Century mine zinc port stockpile to run out

* Century zinc mine concentrate port stockpile running out

* Customers looking to buy concentrate elsewhere

* European smelters stand to be worst affected (Adds more quotes,details)

By James Regan

SYDNEY, Nov 17 (Reuters) - Australia's Century zinc mine, which yields a third of the country's zinc output, will run out of concentrate at its shipping port later on Tuesday, prompting buyers to look for alternative sources, a mine spokeswoman said.

The move is unlikely to have an immediate impact on refined metal output, although it may force European smelters to turn to other sources for the low iron-bearing concentrate they have until now relied on Century to provide, in order to meet strict environmental limits on iron residue generation.

"I wouldn't have thought it will have that big an impact on the market," said William Adams, head of research at FastMarkets.com.

"Given the state of things, this might tighten up the concentrate market, but it will be short-lived as long as they can get the pipeline up and running again."

Zinc concentrate is available in the spot markets of Antwerp, Rotterdam and elsewhere in Europe in plentiful quantities, though Century-type replacement material is less readily available, according to trading sources.

A large amount of concentrate would also be in transit from Australia to Europe and could help smelters eke out stocks they hold -- typically enough to fuel operations for four to six weeks -- though the level of reserves at Century's main customer in Europe, Nyrstar, was not immediately clear.

Belgium's Nyrstar NYR.BL, the world's biggest zinc metal producer, is dependent on Century concentrate for smelting at its Budelco smelter in Holland.

"There aren't a lot of alternatives to Century's concentrate out there and that's why Nyrstar and others hold long-term contracts with Century," a source familiar with the supply system said.

Budel sells around a quarter of its output within the Netherlands and 80 percent is shipped in a range of 300 km (180 miles),including customers in Belgium, France and Germany. Benchmark zinc prices on the London Metal Exchange MZN3 have risen more than 15 percent since the start of October to $2,262. In the same period, copper prices MCU3 rose 10 percent.

FORCE MAJEURE?

Stockpiles of concentrate have been run down over the past six weeks after shipments halted from the world's second-largest zinc mine, producing around 500,000 tonnes of contained zinc annually, after a break in the pipeline carrying the material.

Sally Cox, a spokeswoman for the mine's owner, China's Minmetals, declined to comment on whether a declaration of force majeure had been made to protect the company from liabilities under its supply obligations to customers.

The 304-km (190-mile) pipeline carrying wet concentrate from the mine to a storage shed in the Karumba port burst on Oct. 5.

"We have nearly completed shipments of all the current stocks in the storage shed in Karumba and we expect to complete that today," Cox said. "So our customers are sourcing alternative concentrate."

Cox said Minmetals expected customers to resume buying concentrate from the mine once the port's stockpile was replenished. Mining was continuing, with ore being stored at the mine site.

Installation of a bypass pipe section to fix the leak was expected to be completed by early next week at the latest, enabling tests using water through the pipeline to start prior to clearing the pipeline to resume shipments, Cox said.

Sources raised concerns that if testing showed other leaks along the decade-old pipeline, possibly caused by corrosion, that it could prolong repair work.

Minmetals managing Director Andrew Michelmore has already said it was important to complete the work before the onset of the heavy rain season next month.

"It's not yet known if this incident is isolated or an indication of something problematic going forward," said a source familiar with the the operation. (Editing by Nick Trevethan)