SANTIAGO, Dec 20 (Reuters) - The world's No. 3 copper mine, Chile's Collahuasi, said on Monday it halted shipments of copper concentrate after a weekend accident shut its key sea port terminal, fueling global supply worries.
The surprise force majeure announcement-- a clause that frees the company from contractual deliveries due to actions beyond its control -- could further lift copper prices already trading at near all-time highs on tight supply.
"I have to inform that as of today, Collahuasi has declared force majeure over its copper concentrate sales contracts until further notice," Collahuasi's operator said in a statement, adding it was evaluating the time required for repairs.
Copper for three month delivery CMCU3 on the London Metal Exchange rose nearly half a percent shortly after the news to trade above $9,200 a tonne. Collahuasi had previously said it was seeking for alternatives to export its copper.
The terminal at Patache, which exports mostly copper concentrate, could be shut for at least a month for inspection and repairs, said port Captain Domingo Hormazabal.
"The company has to make sure the port structure is safe," Hormazabal said. "We will have more information on operations once the inspection is done."
A former Collahuasi executive told Reuters the terminal may remain shut for at least three weeks during a police probe into the accident that killed three workers.
The terminal is key for the mine, which last year produced about 3.3 percent of the world's mined copper, or more than 535,000 tonnes -- of which nearly 88 percent is concentrate.
Collahuasi, jointly owned by Anglo American (AAL.L) and Xstrata (XTA.L), was able to ship copper during a month-long workers strike by stockpiling material at the port and mine site. The operator had planned to ship about 52,000 wet tonnes of copper concentrate by mid-December.
"They didn't declare force majeure during the strike because they had inventory so this may be a bit more serious now," said Robin Bhar, an analyst with Credit Agricole. "But in the holiday season demand is subdued so they may be able to go ahead without big problems."
He added that the operator's move to exercise force majeure could be a prudent measure to warncostumers of future delays.
Force majeure plus the month-long strike could hit Collahuasi's annual output target as the giant mine works on an expansion to nearly double annual production and become the world's top copper deposit.
Collahuasi is likely to seek to deliver copper from other ports in northern Chile such as the Antofagasta port, although availability could be an issue, traders said.
A new shipment departed from Patache just before the accident, the operator said.
Collahuasi produced 43,126 tonnes of copper cathodes and 492,727 tonnes of concentrate in 2009 -- most of which was sold to China, India and Japan, according to the company's annual report.