UPDATE 2-Power cuts force Hunan metals smelter outages

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By Lucy Hornby and Polly Yam

BEIJING/HONG KONG, Jan 28 (Reuters) - Power outages designed to safeguard residential supplies have forced outages at mines and plants controlled by the parent of Hunan Nonferrous Metals (2626.HK), executives in Hunan Province said on Monday.

China's largest antimony producer, Hsikwangshan Twinkling Star Co, has shut operations for over a week, while lead and zinc producer Shuikoushan Nonferrous Metals has halted mining and smelting for the past two days. Power cuts have also hit the Zhuzhou smelter, China's largest zinc smelter.

Snow and ice storms across southern and central China have brought the coldest weather in 50 years to Hunan, where many homes don't have central heating. The weather has disrupted coal transport and downed power lines.

"All the power here is out. All the mines are down," the Hsikwangshan official said by phone from Hunan Province.

He said it was too early to say what impact the outage would have an expected 2008 production of 30,000 tonnes of antimony, a flame retardant.

Electricity supply in Hunan is only about 80 percent of normal demand, and local governments are diverting power to homes ahead of the Chinese New Year, said Wang Jianjun, director of the import-export department of the Zhuzhou smelter, China's largest zinc smelter.

"If it gets any colder we can't live here any more."

"We are not producing as much as expected," said Liu Wei Qing, board secretary of the smelter's listed arm, Zhuye Torch Metals (600961.SS), without providing an exact figure. The Zhuzhou smelter has an annual capacity of 400,000 tonnes of zinc and 100,000 tonnes of lead a year.

"Most of the antimony and bismuth production and a lot of the lead and zinc in Hunan are down," said a metals trader in the southern city of Guangdong. Bismuth, a by-product found with other base metals, is used in nuclear reactors and cosmetics.

"There's nothing to do but wait, at least for another week."

Shuikoushan officials have headed for the mines to control flooding, a company official said. It mines about 600,000 tonnes of lead and zinc ore containing 5-6 percent metal and has smelting capacity of 180,000 tonnes of lead, 70,000 tonnes of zinc and 10,000 tonnes of copper.

(Additional reporting by Alfred Cang in Shanghai)

(Editing by Chris Johnson)