Copper prices have edged higher following a deadly incident at Chilean mining giant Codelco’s El Teniente mine. The mine, one of the world’s largest underground copper mines, experienced a tunnel collapse triggered by an earth tremor, resulting in six fatalities. Underground operations have been suspended while Codelco investigates the cause of the accident, raising concerns about potential impacts on the company’s output goals.
Codelco is a Chilean state-owned copper mining company and one of the world’s largest producers of copper. It plays a critical role in the global copper market, with its operations significantly influencing supply and prices. El Teniente produced 356,000 tons of copper last year, making it Codelco’s single biggest mine, a volume exceeding a month’s worth of Chinese refined copper imports.
The disruption at El Teniente coincides with already tight conditions in the global copper market. Copper smelters worldwide are facing intense competition for mine supply, with treatment fees remaining significantly negative on a spot basis. Some plants in the Philippines and Japan have already reduced production or closed due to these pressures, adding further strain to the market.
On the London Metal Exchange, copper rose 0.4 per cent to $US9,672 a ton. Investors are also closely monitoring other unexpected mine disruptions, including at Ivanhoe Mines Ltd.’s Kamoa-Kakula complex in the Democratic Republic of Congo. Other metals saw modest gains, with iron ore futures in Singapore rising 0.9 per cent to $US100.95 a ton, supported by a weaker US dollar. Aluminium and zinc also saw price increases.
