Winter Park, Florida 04/05/2016 - Copper mine disruptions increased in April due to heavy rains in northern Chile and a failing SAG mill at the Grasberg mine in Indonesia, Barclays Capital said.
The bank's analysts estimate roughly 121,000 tonne disruptions on the supply side in April, which brought the year-to-date total to a relatively modest 168,000 tonnes.
"The lack of further major production disruptions or shutdowns raises the risk of an overly supplied market, at least in the immediate term," Barclays said.
Chile was struck by heavy rains in April, which caused floods and production halts at several Codelco mines, including Los Bronces, El Soldado, El Teniente, and Andina.
"At El Teniente, the rains damaged access roads and power supplies to the mine and smelter, and repairs took longer than expected, causing the disruption of an estimated 6,000 tonnes of production," Barclays said.
"Damage at Andina operation was more severe, and both Wood Mackenzie and CRU report that the facility is operating at 65 percent of capacity. The rains damaged a tailings canal, resulting in a tailings leakage," it added.
Barclays estimates a loss of 40,000 of production, which is likely to be further revised as further details from Codelco become available.
Anglo American’s Los Bronces and El Soldado suspended operations for safety reasons, but quickly normalised operations and report no impact on production from the floods.
Elsewhere, Freeport McMoRan reported technical problems at a SAG mill at its Grasberg operation, causing the loss of 30,000 tonnes of production.
The Jinchuan Group's Xiongcun project in Tibet has been delayed until 2017. The project was expected produce 50,000 tonnes of concentrate this year.