By Leia Michele Toovey- Exclusive to Copper Investing News

Share The Chilean earthquake boosted copper; as concerns over supply threats permeated the market.  The 8.8 magnitude quake hit over the weekend and when the markets opened Monday the red metal climbed the most in nearly a year.

Chile is the world’s powerhouse when it comes to copper production, supplying nearly one third of global demand. Five major mining companies were affected by the quake, including the world’s largest copper supplier, state-owned Codelco.

On Monday, Codelco reported that production was stalled over the weekend as a result of the quake disrupting the power supply at the Andina mine.  Anglo American also released a statement on Monday, claiming that “power had been partially restored at four sites impacted by the quake, “with teams working to return to full and safe production as soon as it is able.” Electricity cuts disrupted about 17 per cent of Chile’s copper production, or almost 5 per cent of world production

Chile’s copper production accounts for some 34 per cent of the world supply, with six of the world’s 28 main copper mines located in the nation. Fortunately, most of the copper mines are in the northern section of the country, far away from the quake’s epicenter. Mines and production facilities escaped major structural damage. So far,  nearly 700 deaths have been reported as well as $5 billion dollars in insurable damage.

Monday’s rise in copper comes on the back of February’s 7.1 per cent rise, the strongest monthly gain for copper since August 2009. On Monday, most-active May copper gained 2 per cent, settling at $3.35 a pound on the COMEX. In electronic trading over the weekend the metal rallied as high as $3.487 a pound.

On Tuesday, Codelco released a statement saying that operations at its Andina mine would return to normal later in the day. Meanwhile, Antofagasta said it was receiving normal energy supply at its Chilean mine. As news from mines showed disruptions could be temporary, copper prices that spiked after the quake began to backtrack. Benchmark copper on the London Metal Exchange was trading at $7,332 a tonne at 1109 GMT compared with $7,400 at the close on Monday.

Company News

Denver based gold and copper miner Newmont Mining Corp released Q4 earnings at the end of last week.  The release shows that the company’s net income skyrocketed as revenue nearly doubled.  Earnings reached $865 million from $42 million in the year-earlier quarter. Net income attributable to Newmont holders was $558 million, or $1.13 a share, compared with $4 million, or 1 cent. Adjusted net income in the latest period was $1.14. Shares outstanding rose 8.4 per cent to 493 million from 455 million. Revenue rose to $2.52 billion from $1.33 billion. The company sold 1.5 million ounces of gold and 72 million pounds of copper in the quarter.  In addition to increased revenue, the company’s cost of operations decreased. The cost of selling gold fell 7 per cent from a year-earlier to $413 an ounce; the cost of selling copper fell 2 per cent to 64 cents a pound.

If First Quantum Minerals had their first choice for acquisitions, they would be going after copper assets.  Unfortunately, stiff competition for assets, owed to the metal’s swift rebound, has made the miner determine that nickel assets would be a more feasible addition to the company’s portfolio of properties.  The Canadian miner recently closed its acquisition of the Ravensthorpe nickel mine in Australia from BHP Billiton.  First Quantum President Clive Newall released a statement regarding his company’s intentions. “If we could continue to find copper ore bodies we’d do that, because we are the most bullish about copper of any commodity, but so’s everybody else, so everybody’s competing for the same thing,” he said. “So we’re looking for opportunities where we can produce other  base metals at low costs, and there are a number of nickel projects that fit that bill right now.”  Over the next few years,  First Quantum hopes to morph from a  mid-tier copper miner into a notable nickel producer.

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