Train Wreck du jour, real good illustration of it. So much for added copper supplies from Chile:
Reuters
Chile mulls cost to copper miners of natgas crisis
Thursday April 8, 1:52 pm ET
SANTIAGO, Chile, April 8 (Reuters) - Chile's government is studying the impact on costs in the copper mining industry as a result of a natural gas shortage affecting the country, the mining minister said on Thursday.
Chile, the world's top copper producer, is suffering cuts in its natural gas supply from energy-strapped neighbor Argentina, which has curbed exports to ensure domestic demand.
Power companies foresee higher electricity rates for clients as they switch to costlier fuel substitutes such as coal or diesel to maintain a steady supply.
"We're not seeing a problem of a shortage of electricity supply, but what we are seeing is a problem of higher costs, and this obviously is of great concern to us," Mining Minister Alfonso Dulanto told reporters.
Dulanto ruled out any interruption of copper production and said current high metals prices would help soften the blow for companies.
"I've asked internally ... for a study on what impact this will have on us in terms of costs because power supply has an especially important weighting in overall costs for mining, especially in the electrolytic (refining) process," he said.
In addition to buying electricity, many copper smelters in the country have recently converted to using natural gas for combustion.
The Chilean Copper Commission, or Cochilco, is doing the study, which Dulanto said would list exact operating cost increases in dollar terms for each large mine in the country.
Cochilco officials said it was not clear when the study would be completed.
Natural gas is used to generate about a quarter of Chilean electricity, according to the latest data.
However, the bulk of Chilean copper is produced in the arid northern region, which relies heavily on natural gas-fired power plants because hydro-electricity is not an option there.
The northern electrical grid, known as SING, has installed capacity of 3,200 megawatts, which is about double current demand. |
