WRAPUP 2-Chile mines reopen after quake, power coming back

Mon Mar 1, 2010 5:57pm EST

Related Topics

 * Andina resumes operations, last mine to restart
 * Valparaiso, San Antonio ports reopening
 * Codelco, hit hardest, says normal power restored to all
 * Refineries remain offline, one may restart this week
 * Copper up near 3 pct, off peaks as impact seen limited
 (Adds Codelco comment on power supply)
 By Alonso Soto
 SANTIAGO, March 1 (Reuters) - Chile's mines returned to
service on Monday after the massive weekend earthquake briefly
shut nearly a quarter of the top copper producer's output,
while improving power supply eased concerns of further
disruption.
 As miners confirmed that operations were resuming, London
copper prices tempered gains to end up nearly 3 percent after a
knee-jerk jump of more than 5 percent when markets opened after
Saturday's 8.8 magnitude quake, among the largest on record.
 Despite heavy damage to Chile's infrastructure near the
epicenter some 200 miles (322 km) south of Santiago, there was
no serious damage reported to the copper mines around the
capital that were shut by power outages, while the biggest
deposits some 600 miles (1,000 km) to the north were
unaffected.
 And while the southern electricity grid that serves mines
near Santiago suffered from the quake, state-owned Codelco, the
world's No. 1 copper producer, said Monday afternoon that all
its mines were receiving normal electricity.
 Codelco restarted its Andina mine, the last major facility
to confirm that it was up and running on Monday. Its massive El
Teniente underground mine, which accounts for more than 7
percent of Chile's copper, reopened on Sunday.
 "Chile's earthquake is unlikely to have a lasting impact on
production and trade, beyond a short-term price rally given
that all mines are intact. Infrastructure will likely be
quickly restored, (and) global inventory levels are at relative
highs," analysts at UBS said in a report.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 To see a Reuters Insider video clip on copper stockpiling
after the quake, click link.reuters.com/ned82j
 To see a map locating Chile's major copper mines and the  
quake epicenter, click on link.reuters.com/qug92j
 For a Factbox on operations click: [ID:nN28135112]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 The biggest question by Monday focused on the availability
of electricity, a factor that a host of operators cited as
hindering the recovery to full production rates in a country
that produces about one-third of the world's copper.
 "At Candelaria, reliable power is the issue there. It went
out on Saturday and as of reports today that is being
restored," Freeport McMoRan (FCX.N) Chief Executive Richard
Adkerson told an investor conference hosted by BMO Capital
Markets. Freeport's Candelaria mine had been temporarily
offline.
 Antofagasta PLC's (ANTO.L) Los Pelambres mine was coming
back on line after losing power. Anglo American PLC (AAL.L)
said it had restarted operations at the Los Bronces, El Soldado
and Mantoverde mines that account for about half of the
company's copper production, as well as its Chagres smelter.
 Brookfield Infrastructure Partners (BIP_u.TO), whose
Transelec is Chile's largest electricity provider, said early
assessments showed transmission towers of its company were
largely unaffected. It said it was able to meet demand in the
worst-hit area around the central city of Concepcion.
 A Transelec official said it had addressed all major
problems, and that remaining issues -- which could take
"months" to resolve -- were on a smaller scale affecting only
final distributors, not generation or transmission systems.
 Both of the country's oil refineries, including the Bio Bio
plant just outside of the hard-hit city of Concepcion, were
shut, forcing Chile to step up diesel imports, which could be
further increased by demand for generators.
  ENAP may be able to restart the 100,000 barrel-per-day
(bpd) Aconcagua refinery near the capital in five or six days,
a union leader said [ID:nN01104513], while state oil firm ENAP
said it would buy a 65,000-cubic meter diesel shipment.
 After surging as much as 5.6 percent to a five-week high of
$7,600 when trading opened Monday on the London Metal Exchange,
the benchmark three-month copper contract MCU3 ended up just
2.8 percent at $7,400 a tonne, while May COMEX copper HGK0
rose 2 percent.
 PORTS RETURN, STEEL UNIT OUT
 Chilean ports were also restarting operations.
 Denis Yanez, the head of a national confederation of port
workers, said the copper exporting port of San Antonio was
scheduled to restart operations at 10 a.m. EST (1500 GMT).
 He said the major port of Valparaiso started receiving
shipments on Sunday and was expected to increase its load later
on Monday.
 Chilean fertilizer, lithium and iodine producer Soquimich
(SQM.N) said it sustained no damage to local facilities
following the earthquake.
 Iron ore producer CAP CAP.SN said Monday it was forced to
close its southern Huachipato steel unit and that repairing the
damage will take at least three months to get output back to
normal.
 Industrial conglomerate Copec COP.SN, one of the world's
biggest producers of cellulose, said it halted forestry
operations in the areas hit by an earthquake this weekend.
 (Writing by Alden Bentley; reporting by Alonso Soto in
Santiago, Carole Vaporean in New York, Rebekah Curtis in
London; Editing by Lisa Shumaker)






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