Posted on 08/18/2006 5:26:43 PM PDT by TigerLikesRooster
BHP shuts world’s biggest copper mine after blockade
Posted online: Saturday, August 19, 2006 at 0000 hours IST
AUG 18: BHP Billiton shut the world’s biggest copper mine after striking workers in Chile blocked all roads to the site, cutting off metal supplies at a time of surging demand.
Copper prices jumped 2.7% after BHP Billiton, the world’s largest mining company, said it called off talks with the union following the blockade. A 12-day-old strike by 2,052 miners seeking higher pay at the Escondida mine had already cut production to as little as 40% of capacity.
Prices of copper, used in wires and pipes, have more than doubled in the past year as strikes disrupted supplies and consumption soared in China, the world’s fastest growing economy. Mine management said August 16 the dispute was costing owners including BHP Billiton, Rio Tinto Group and Mitsubishi Corp $16 million in profit a day.
“The shutdown of Escondida, if for any length of time, will have a major impact on the supply of copper globally and on prices,” said Neil Boyd-Clark, who helps manage $3 billion at ABN Amro Asset Management Ltd in Sydney. “Though it is quite possible that any profits lost by BHP here will be made up by profits elsewhere because of high commodity prices.” Rio Tinto, which owns 30%, declined 27 pence, or 1%, to 2,755 pence. Shares in Mitsubishi fell 0.6% to close at 2,445 yen in Tokyo.
The Escondida shutdown comes amid labour disruptions at mines in Chile and Mexico as workers seek a greater share of the profits generated by the rise in metal prices to all-time highs. Grupo Mexico SA, the world’s seventh-biggest copper producer, is planning to restart its La Caridad copper mine and cathode plant in Mexico in early October, after replacing workers and repairing damage left by a four-month strike.
As much as 18% of global copper supply may be disrupted by industrial action this year due to wage talks, UBS AG said in June. Copper futures contracts on the London Metal Exchange rose to $7,470 a metric tonne. Earlier they gained as much as $220, or 3%, to $7,510 a tonne. Prices dropped 5.3% on Thursday on expectation talks with the union would resolve the dispute.
BHP Billiton will take legal action against the union over the roadblocks at the mine, which accounted for 8.5% of all mined copper worldwide last year, spokeswoman Emma Meade said in an e-mail.
Double whammy.
Not to worry, the hoodlums in Detroit are stealing (some getting fried) power lines and selling the metal as scrap will certainly make up for it.
Just great.
Blow the mines up, Francisco.
:-D )))
I was going to post "Brother, you asked for it!"
Copper is at $3.40 where it has been for a while. A couple years ago it was under one dollar, but oil, natural gas, gold, silver, copper, and other commodities all rose substantially during that period. All are more or less holding at their present levels for some weeks and most are down from their peak a few months ago.
Wow!
I had no idea. Doubled in 1 year!
thank you...
Thanks for your comment. It is really informative.
There are a lot of closed copper mines in the western U.S., and some in the east as well.
Here we are told Copper is at an all time high.
Yet no American copper mines are reopening.
Instead we have hand wring about the "eyesores" from the digging and "Super-fund" claims abound.
Funny how there is no toxic waste problem when the mines are active, only when they are idle.
Damn, you beat me to it.
Everyone has learned from the oil industry.
Think of all the finished goods that use copper.
Electrical wiring for new homes, electric appliances, wiring for new cars, power lines, copper pipes, welding cable, brass/bronze alloys, the list is endless.
Look at the KITCO chart and consider all the companies that had three to six month inventories bought at the low end of the curve.
The replacement costs are severe and how much do you really want to buy now at these elevated prices?
Buy a three month inventory and watch prices fall making you look like an idiot for purchasing it?
Or buy it and watch prices keep soaring making you look like a visionary?
It's a crap shoot right now and I don't know where it's going to go to!
"Thanks for your comment. It is really informative."
Thanks for posting this thread!
BHP bought Magma where both my Father and I works for many years. The shut it down and are unlikely to open it back up as long as they can make more money with their South American ans Asian properties.
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