Copper Mines Suspended in Chile Following Heavy Rains

Heavy rains have rocked Chile for the second time this year, causing a number of copper mines in the country’s north to suspend operations.
State-owned copper-mining company Codelco has halted work at its Chuquicamata mine, while BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT) has seen minimal disruptions at its Escondida mine in the region, Bloomberg reported. Antofagasta (LSE:ANTO) told the news outlet that its mines in the region are operating normally.
According to Reuters, Codelco also temporarily halted opperations at its Radomiro Tomic mine, but has since resumed operations. The company hasn’t reported issues at its biggest copper mine, El Teniente.
Five people have died as a result of the storms, and a state of emergency was declared in the cities of Antofagasta and Tocopilla. Roughly 1,000 people have been evacuated from Tocopilla.
Northern Chile was hit with what the BBC has called the heaviest rains in 80 years earlier this year. Those floods killed 17 people and left roughly 11,000 affected. Lundin Mining’s (TSX:LUN) Candelaria mine and operations run by Codelco were temporarily halted as a result of the floods, while a fair amount of lithium production in Chile was also put on hold.

Currently, Codelco is also facing a a potential strain on its output due to ongoing strikes at Ministro Hales, and according to another report from Reuters, Codelco’s Salvador mine is currently shut down and has been “in the hands of protestors” for over two weeks.
Bloomberg also states that the rains are helping bring a seven-year drought in the region to an end, which is no doubt helpful for copper miners that might be worried about adequate water supply. However, those same storms, as well as numerous labor actions in the region, could have some market watchers worried about copper supply from the nation. Chile is the largest copper-producing country globally, while Codelco is the world’s top copper-mining company in terms of production.
The spot copper price has gained nearly 2.67 percent in the past three days, rising to $2.39 per pound. However, the red metal is still down nearly 25 percent so far this year, and some analysts remain concerned about oversupply and slowing demand from China.
That said, on August 5, Reuters reported that Codelco hadn’t offered refined copper to China on the spot market for weeks in a move to protect its ability to supply term shipments should the strikes continue. Term shipments of copper and contracted spot deliveries hadn’t been affected.
 
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 
Related reading:
What do Floods in Chile Mean for Lithium Supply?