Chicago 06/10/2016 - JP Morgan reduced its 2016 copper production estimate by 40,000 tonnes to 20.171 million tonnes following mine disruptions in South America and weather-related problems in Australia.
PT Freeport Indonesia's Grasberg copper mine went on strike on September 28 due to ongoing labour disputes relating to bonus payments.
Unlike similar worker strikes at Anglo American's Los Bronces copper mine and Antofagasta's Los Pelambres mine – both in Chile – the respective sides have hit an impasse and a quick resolution is unlikely.
"The risk remains that the dispute may escalate, as Grasberg has been plagued by labor unrest in recent years," JP Morgan said. "In 2011, a three-month strike resulted in a 110,000 tonnes and 275,000 ounces loss in copper and gold output, respectively, while the blockade to the mine access road in 2015 halted production for five days."
Weather disruptions are also playing a role with two South Australia copper mines experiencing a state-wide blackout due to severs storms on September 28.
Damage to the local electrical system forced BHP Billiton's Olympic Dam and OZ Minerals' Prominent hill to shutter production. Olympic Dam annually produces 200,000 tonnes while Prominent Hill stood at 120,000 tonnes.
However, the mines suffered no structural damage and production loss at Olympic Dam is only expected to be around 7,000 tonnes.
Closer to the US, Hurricane Matthew ripped through Haiti and Cuba in recent days and forced Sherritt International Corp's Moa nickel-cobalt joint venture to shutdown.
The Moa joint venture produced 8,290 tonnes of finished nickel in the second quarter and is expected to produce 33,500-34,500 tonnes over the full year, according to the Toronto-based company's second-quarter earnings report.
(Editing by Tom Jennemann)