Copper prices are rising for the second day in a row. The reason is the suspension of metal production in Chile. Mining giant Codelco is struggling with the consequences of a deadly accident at one of the world’s largest underground mines.
Bloomberg reports that six people were killed when an earthquake hit a tunnel in El Teniente, which accounts for more than a quarter of Codelco’s production. Underground work has been suspended, and as the company investigates the cause 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 Tenente mine produced 356,000 tons of copper. Tonnes of copper, making it Codelco’s largest mine. This volume is equivalent to one month’s worth of refined copper imports into China.
Against this backdrop, the price of copper on the London Metal Exchange rose 0.4% to $9,672 per tonne.
The mine’s shutdown comes as global copper smelters face fierce competition for supplies. Refining fees, a significant source of income for copper smelters, remain extremely low in the local market, while plants in the Philippines and Japan have cut production or closed. Even in China, where production remains stable, there is speculation that it is reaching its breaking point.
