BHP's Escondida copper mine stays shut after fatal accident, restart timing unclear
A contractor died at the world's largest copper mine on Sept. 23, and Chilean rules require inspectors to clear the site before any resumption.
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A contractor died at BHP's Escondida mine in Chile on Sept. 23 while carrying out maintenance work, the company said. The union representing workers at the site told Reuters the accident involved a front-end loader, a machine commonly used across the industry.
Chile's National Geology and Mining Service, known as Sernageomin, confirmed the fatality and ordered its regional team to investigate immediately. Under Chilean rules, a mine can only resume activity after a fatal accident once inspectors confirm conditions are safe, a threshold that has not yet been cleared.
The disruption showed up quickly in copper markets. The LME cash-to-three-month spread, a gauge of near-term supply tightness, widened to $107.50 per tonne on Sept. 24, the highest since Sept. 1 and up sharply from near zero a week earlier, according to Discovery Alert. Copper prices were sitting 1.7% below their record high as the Escondida suspension combined with a separate looming strike vote at BHP's Centinela mine, Discovery Alert reported.
Escondida is the world's largest copper mine and was projected to produce between 1.1 million and 1.28 million tonnes this financial year, down from 1.26 million tonnes previously, according to Grafa. Rio Tinto holds a 30% stake in the joint venture and Japan's JECO Corp holds 12.5%. The mine's full suspension raised the prospect of a meaningful supply disruption at a moment when BHP is also mid-negotiation on a new labour contract with Escondida workers, with a vote pending. How long the shutdown lasts, and how quickly output returns once inspectors sign off, will determine whether this stays a brief interruption or turns into the kind of prolonged stoppage that copper markets have been pricing as a risk.