Chile mines reopen, power in south spotty after quake

SANTIAGO (Reuters) - Chile's mines escaped serious damage and struggled back to normal on Monday, two days after a massive earthquake shut nearly a quarter of the top producer's copper output, but the disruption of power supplies threatened to slow the recovery.

As miners confirmed that operations were resuming, copper prices tempered gains to end up 1.8 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 severe damage to Chile's infrastructure near the epicenter some 200 miles south of the capital Santiago, there was no serious damage reported to the copper mines around the capital that were shut by power outages, while the biggest deposits in the far north were unaffected by the quake.

The full impact on Chile's two transmission systems was still being assessed. The electricity supply in the north, the principle mining zone was not damaged. But the quake did significant damage to power grid in the south, which includes Santiago and the mines near it.

Brookfield Infrastructure Partners said early assessments showed transmission towers of its transmission company Transelec, Chile's largest electricity provider, were largely unaffected. It said it was able to meet demand in the worst-hit area around the central city of Concepcion,

Transelec said no damage had been done to its Norte Grande grid that serves top mines.

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.

U.S. bank Morgan Stanley and European trader Vitol have each booked a ship to deliver gas oil to Chile from South Korea to meet diesel demand.

State-owned Codelco, the world's No. 1 copper producer, said midmorning it had restarted its Andina mine, the last major facility to confirm that it was up and running. Its massive El Teniente underground mine, which accounts for more than 7 percent of Chile's copper, reopened on Sunday.

U.S.-based Freeport McMoRan said its Candelaria mine, northeast of Santiago, was restoring operations to normal levels, although the power supply was still unsettled.

"At Candelaria, reliable power is the issue there. It went out on Saturday and as of reports today that is being restored," Freeport Chief Executive Richard Adkerson told an investor conference hosted by BMO Capital Markets.

Antofagasta PLC said Monday power was restored at the Los Pelambres mine and that the mine was coming back on line as of Sunday. Anglo American PLC said on Monday 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 copper smelter.

Chilean ports were also restarting operations on Monday.

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 said it sustained no damage to local facilities following the earthquake.

Iron ore producer CAP 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.

The biggest mines in Chile, which produces a third of the world's copper, are about 1,000 km (600 miles) to the north and were spared any damage, but the brief interruption of supply from the mid-sized deposits nearer the capital was enough to send three-month copper up 5.6 percent when trading opened on the London Metal Exchange.

But the panic subsided and May copper at the COMEX division of the New York Mercantile Exchange settled up 6.60 cents, or 2 percent, at $3.35 a lb.

(Writing by Alden Bentley; reporting by Alonso Soto in Santiago, Carole Vaporean in New York, Rebekah Curtis in London; Editing by Lisa Shumaker)