Chile earthquake drives copper prices higher
02 Mar 2010
The devastating earthquake that struck the world's largest copper producing nation last weekend has sent the price for the metal up by 2.1 per cent to $3.35 a pound for May delivery yesterday on New York Mercantile Exchange, after paring an earlier gain of over 6 per cent.
Although, the direct impact on the copper mining sector is limited, it is believed that the damage to the country's infrastructure, especially power and connectivity to ports could affect production from the mines, raising supply concerns.
Chile produces over one-third of world's copper and exports of the metal account for about one-third of the mining exports of the country.
While the largest mines were not significantly affected, it is feared that production disruptions from mid-sized mines could move up the prices for the commodity.
Chile's vast reserves of copper and other minerals such as molybdenum, zinc, gold, silver, manganese, etc, are embodied in ore formations that exist along the great Andean Cordillera. Some of the world's largest open cast mines are situated at high altitudes and severe environments along the cordillera.
Apart from the state-owned Codelco (Corporacion Nacional de Cobre de Chile), the world's largest copper miner and the private mining company Antofagasta Minerals, all the major international mining houses such as BHP Billiton, Anglo American, Rio Tinto, Placer Dome, Barrick Gold, etc, have their operations in Chile.
Most of the country's key mining areas are located on the northern part while the quake struck mostly the central part of Chile.
