UPDATE 1-Copper mines returning to normal in Chile

Tue Mar 2, 2010 11:35am EST

Related Topics

(For full coverage, click on [ID:nCHILE])

* Power supplies normal at Antofagasta mines

* Codelco says Andina operations to return fully Tuesday

* Copper prices fall as supply worries ease

By Alonso Soto

SANTIAGO, Chile, March 2 (Reuters) - Mines in quake-hit Chile were returning to normal on Tuesday as power resumed at affected sites, easing investor worries about copper supply disruptions and reversing a spike in prices.

Chile's Codelco [CODEL.UL], the world's top copper miner, said all operations at its major Andina copper mine would be back online later on Tuesday after the massive 8.8-magnitude quake that killed more than 700 people briefly shut the mine.

Andina -- which produces 210,000 tonnes of copper annually and is located about 31 miles (50 km) outside Santiago -- will soon be operating at full capacity, but it will take time to reach normal output, a company spokesman said.

Miner Antofagasta (ANTO.L) also said on Tuesday it was receiving regular electricity at its mines.

Most of Chile's major mines are located in the north of the country and so avoided the brunt of the quake that hit south of Santiago.

As news from mines showed disruptions could be temporary, copper prices that spiked after the quake began to backtrack.

Benchmark copper CMCU3 on the London Metal Exchange was trading at $7,332 a tonne at 1109 GMT compared with $7,400 at the close on Monday when the metal used in power and construction hit $7,600 a tonne, the highest since Jan. 20.

"Most mining locations are going to be fully operational again within a short period of time, within a few weeks, so as horrific as the earthquake has been for the Chilean people the mining sector has largely been spared," said Mike Frawley, global head of metals with Newedge Financial Inc in New York.

Frawley said Chile had enough inventory to meet demand.

Chile produces about 35 percent of global mined copper, and countries such as China, India and Japan rely on copper concentrate from it to keep their smelters going.

Analysts said that forestry and steel companies with operations near the epicenter would be the hardest hit by the quake. Industrial conglomerate Copec COP.SN, one of the world's biggest producers of cellulose, was forced to halt forestry operations in affected areas and iron ore producer CAP CAP.SN closed down a steel unit in the south after the earthquake.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Chile Economy Seen Withstanding Quake

link.reuters.com/duk92j ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ (Additional reporting by Rodrigo Martinez in Santiago and Mica Rosenberg in Buenos Aires; Writing by Mica Rosenberg; editing by Stuart Grudgings and John Picinich)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.