UPDATE 3-Chile copper mines weather quake; some ports shut

Wed Apr 2, 2014 1:59pm EDT

* Massive, quake-proof copper mines dodge harm following 8.2
quake
    * Some concerns closed ports could curb supply
    * Copper prices rise to over three-week high

 (Adds trader comment, details on mining, paragraphs 6-9, 13-14)
    By Alexandra Ulmer and Fabian Cambero
    SANTIAGO, April 2 (Reuters) - Copper operations in Chile,
the world's top producer, were unscathed by a major earthquake
that struck the mineral-rich north on Tuesday night and prompted
the evacuations of some workers. 
    But several ports that ship metals from the Andean country
remained closed on Wednesday following a tsunami evacuation,
suggesting some exports and trade flows may be disrupted.
 
    Copper prices rose to their highest in more than
three weeks on Wednesday on concerns that supplies could be
affected following the 8.2 magnitude quake. Chile supplies
one-third of the world's red metal.    
    None of the quake-proofed mines in the Andean country
reported structural damage following the earthquake, which
killed six and triggered the tsunami that pounded the shore.
 
    "I think the impact this time around is close to zero," said
Juan Carlos Guajardo, the head of mining think tank CESCO.
"Ports are the most exposed, but they didn't suffer either
because the tsunami was very small."     
    Any major damage could have been catastrophic for Chile,
where copper accounts for over one-half of export revenue and
about 15 percent of gross domestic product. The country produced
5.8 million tonnes of the metal last year. 
    Still, one physical copper trader in Europe who says he
doesn't have any cargo warned of disruption to business over the
next several weeks.
    The clean-up, checking safety of mines and port closures
will disrupt trade for weeks, he cautioned.
    "It'll have more of an effect on ports and logistics (than
prices). There could be some logistical bottlenecks. I think
people have got a little ahead of themselves. We're talking
about a shallow tremor here," he said.
    
   
    The massive Collahuasi mine, a partnership between Glencore
Xstrata Plc and Anglo American Plc, located
relatively close to the epicenter, evacuated workers, but said
the deposit and port were intact and that mining operations
should return to normal on Wednesday. 
    Chilean state-run miner Codelco and global miner
BHP Billiton  said their mines and ports were
experiencing no problems with copper shipments. 
    SQM , which has extraction rights to some
of the world's biggest reserves of nitrates, iodine and lithium
in the north, said they had not suffered damage at their
operations, but a few facilities had power cut.
     Power cuts following the quake may have dented copper
output, although most mines can quickly activate back-up
generators.
    "Up until now, the fall in electricity generation in (the
Northern SING grid) averages around 350 megawatts," said Pedro
Fuenzalida, a mining and energy analyst with LarrainVial in
Santiago. "That leads us to estimate that to date roughly 1,000
tonnes in copper output have been lost." 
    ENAP, the state-owned oil company, said it had
halted operations and evacuated workers at its Aconcagua and Bio
Bio refineries but operations were returning to normal. Chile's
fuel supply was unaffected by the quake, the company
added. 
    The northern ports of Arica, Patache, Iquique, Mejillones
and Tocopilla were closed or only partially operating, according
to the Chilean army. 
    China is the world's top consumer of metals and many of the
ships on Chile's Pacific coast cross the ocean to Asia.
    "Any delay, based on the premise that there indeed wasn't
major damage to ports, should be overcome within a few days,"
Fuenzalida, the analyst, added. 
    The CESCO/CRU copper conference that kicks off next week in
the capital, Santiago, where the quake was not felt, was set to
proceed as normal.

 (Additional reporting by Josephine Mason in New York; Editing
by Sofina Mirza-Reid, Jeffrey Benkoe and Tom Brown)
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