Copper is rising in price for the second day in a row due to the shutdown of mining in Chile. Mining giant Codelco is struggling with the aftermath of a fatal accident at one of the largest underground mines in the world.
Bloomberg writes that six people died as a result of the collapse of a tunnel caused by the earthquake in El Teniente, which accounts for more than a quarter of Codelco's production. Underground work has been halted, and since the company has launched an investigation into the causes of the accident, it is unclear how long the shutdown will last and whether it will affect the company's production plans.
Last year, the El Teniente mine produced 356,000 tons of copper, making it Codelco's largest mine. This volume is equivalent to more than a month's worth of refined copper imports to China.
Against this background, the price of copper on the London Metal Exchange increased by 0.4% to $ 9672 per ton.
The shutdown of the mine occurred at a time when the world's copper smelters are facing fierce competition to secure supplies. Processing fees, the main source of income for copper smelters, remain extremely low in the spot market, and plants in the Philippines and Japan have reduced production or closed. Even in China, where production remains stable, there is speculation that it is reaching a limit.
Investors are also monitoring other unexpected disruptions in the mines, in particular at the huge Kamoa-Kakula complex owned by Ivanhoe Mines Ltd. in the Democratic Republic of the Congo. For its part, the company's management gave an optimistic assessment of the prospects for the return of this mine to its previous performance.
Prices for other metals started unchanged or with an increase, supported by a weakening dollar. Iron ore futures in Singapore rose 0.9% to $100.95 per tonne, reversing the biggest weekly drop since April. Aluminum and zinc have also increased in price.
