Codelco Closes Andina for Third Day; Copper Soars (Update2)

March 1 (Bloomberg) -- Codelco said its Andina Chile copper mine remains closed for a third day after an earthquake cut electricity, while Anglo American Plc is ramping up production after restoring power. Copper futures soared after the tremor disrupted supplies from Chile, the world's largest producer.

Codelco is evaluating when the 219,554 ton-a-year Andina mine can restart, an official, who was briefed on the plans, said by telephone today. Anglo American, based in London, said today in a statement that it restarted production yesterday after power was "partially restored" to operations on Feb. 27.

Anglo American's production was affected at the Los Bronces, El Soldado and Mantoverde mines and Chagres copper smelter by the 8.8-magnitude earthquake. About half the company's total output, or 341,300 tons of copper last year, came from those mines. The company's Mantos Blancos mine and the jointly owned Collahuasi were unaffected by the earthquake.

Copper futures jumped to a seven-week high in New York after the earthquake that killed at least 700 people. More than 50 aftershocks followed the earthquake, which was stronger than the one in Haiti on Jan. 12.

Copper for May delivery climbed 6.9 cents, or 2.1 percent, to $3.353 a pound at 10:56 a.m. on the New York Mercantile Exchange's Comex unit. The most-active contract earlier reached $3.487, the highest price since Jan. 11. The commodity surged as much as 6.2 percent before retreating.

'Gradual' Restart

Codelco began a "gradual" restart of operations at the 381,000 ton-a-year El Teniente underground mine in central Chile yesterday after reconnecting the power supply cut by the earthquake. The temblor didn't cause any significant damage to equipment, the company said. Andina also had a power cut, while a rockfall also caused a five-ton boulder to damage equipment.

The state-owned company can compensate for any shortfalls from the El Teniente and Andina mines with shipments from undamaged plants in Chile's north, a company spokesman said. The company ruled out declaring force majeure, a contractual clause that allows companies to miss obligations because of circumstances beyond their control.

Antofagasta Plc, the copper producer controlled by Chile's Luksic family, said its Los Pelambres copper mine in Chile resumed operations yesterday after power supplies were interrupted by the earthquake.

Los Pelambres is located 240 kilometers (149 miles) northeast of Santiago, while the earthquake was about 325 kilometers southwest of the capital city, the company said.

Gerdau, Cap

Antofagasta's other operations in the north didn't experience disruptions, it said.

Gerdau SA, Latin America's largest steelmaker, said it will decide when to restart operations in Chile after assessing possible damage to its buildings and equipment.

The company's main plants in Colina and Renca, in the Santiago region, were operating when the earthquake struck, Gerdau said today in a regulatory filing. The company said there are no reports of injuries to any of its employees.

Cap SA, Chile's biggest steelmaker, said its Huachipato plant in southern Chile was “seriously affected” by the earthquake. Operations are halted and repairs may take three months, the Santiago-based company said in a statement on the securities regulator's Web site. Cap's other steelmaking and iron-ore operations weren't affected, the company said.

Barrick Operating Normally

Barrick Gold Corp.'s gold and copper mines in Chile weren't affected and are operating as normal, a spokesman said.

"The plants are pretty much in the north of Chile and were not hit," Vincent Borg, a spokesman for the Toronto-based miner, said in a phone interview from the Canadian city.

Chile's GNL Quintero's SA regasification terminal is operating normally today after being shut down by the earthquake, spokesman Alfonso Salinas said in a telephone interview from Quinteros.

"The terminal was closed for about 10 hours but today it is supplying gas as normal" Salinas said today.  "There was no ships unloading LNG at the time of the earthquake but one is scheduled to arrive tomorrow."

Petroleo Brasileiro SA, Brazil's state-controlled oil company, said today in an e-mailed statement the earthquake didn't cause any major damage to its operations in the country.