Lundin's Caserones Mine Faces Up to Three-Week Restart Following Storm Damage

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Lundin's Caserones mine has been without power since July 18, with power restoration and the gradutial restart of operations expected to take between two to three weeks.

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No Power

Lundin said on July 27 that its Caserones copper mine in Chile's Atacama region has been without power since July 18, after severe weather brought heavy rainfall and snowfall, forcing the company to suspend operations.

The company has started backup generators to support critical infrastructure at the site. Lundin identified damage to two power line towers serving the mine, and has since deployed crews to repair the damage. Power restoration and the gradual restart of operations are expected over the next two to three weeks.

Industrial Info Resources data show three active projects at the Caserones mine involving US$150 million in investments for new equipment and expansions.

Despite the disruption, the company said on July 21 that it has incorporated weather disruptions into its production forecasts and maintains full-year production guidance at Caserones of 130,000 to 140,000 tonnes of copper. No update for the production forecast was issued on July 27.

During the first quarter, the Caserones mine was Lundin's largest copper producer, with output of 39,000 tonnes or 48.2% of the company's volumes.

Lundin completed the acquisition of an additional 5% interest in Caserones in April, increasing its ownership in the mine to 75%.

Candelaria Mine Disruption

Lundin also reported a brief disruption of its operations at its Candelaria mine due to severe weather in Chile's Atacama. However, the mill continued to operate using existing stockpiles, while mining has since returned to full capacity.

The Candelaria mine recorded volumes of 31,000 tonnes of copper in first-quarter 2021, and its guidance for the year has been set at 135,000 to 145,000 tonnes of copper.

Industrial Info Resources is tracking 40 projects at the Candelaria mine worth slightly more than US$1 billion.

Copper Prices

The disruption comes as the copper market remains sensitive to pottential supply disruptions amid high prices. Over the last week, copper prices have remained above the US$6-per-pound mark, driven by nine-month-high Chinese imports, low inventories in London and Shanghai, lower production from Chilean mines, and solid long-term demand for the red metal, according to Cochilco, the Chilean Copper Agency.

Demand for copper is expected to remain strong over the next few years, driven by the transition to renewable energy as well as grid expansion, both copper-intensive.

Key Takeaways

• Power supply and operations at the Caserones copper mine have been impacted since July 18 due to severe weather.
• The company expects to restart operations in the next two to three weeks.
• The Candelaria mine also had operations impacted by severe weather, though the company has since restarted production.

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