Codelco CEO Sees Chile Copper Output Reduced by Strikes and Bad Weather

Aug. 13 (Bloomberg) –Chile, the world's largest copper producer, may have lost about 8 percent of its output this year because of adverse weather, strikes and project delays, Codelco Chief Executive Officer Diego Hernandez said.

Production has been hurt by weather problems, especially in Chile's north, as well as workers protests, he said today in an interview at the company's El Teniente mine. Santiago-based Codelco, the world's top producer, may miss its output target for the year after union action and weather-related problems, Chairman Gerardo Jofre said in a separate interview.

"If we add this all up we get a significant impact on estimated production, perhaps about 8 percent of national output," Hernandez said. The lost output is "not recoverable," he said.

Copper prices have climbed 22 percent in the past year as production at mining companies including BHP Billiton Ltd. (BHP) and Rio Tinto Group were affected by falling ore grades, labor disputes and adverse weather. Goldman Sachs Group Inc. said in an Aug. 8 report that copper will climb to $11,000 a metric ton in 12 month as supplies tighten because of growth in emerging economies. Copper for delivery in three months fell $16, or 0.2 percent, to $8,865 a ton on the London Metal Exchange today as of 1:55 p.m. New York time.

Workers at BHP's Escondida unit in Chile agreed on Aug. 5 to accept a package of benefits to end a two-week strike at the world's biggest copper mine. Codelco workers staged a one-day stoppage July 12 in the first companywide strike since 1993.

Chile's state-owned Codelco expects prices for the metal to remain at current levels for the rest of 2011, Hernandez said. Falling demand has mitigated the loss of output, he said.