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Copper soars on accident
8 Oct 2009The price of copper shot up $55 to $6150 (£3846) a tonne on the London Metal Exchange today to give a two-day rise of $90 after a mechanical failure at BHP Billiton's Olympic Dam mine in Australia.
Analysts at Macquarie Bank estimated that Tuesday's accident caused by a runaway ore skip could cut the mine's production by 80%, turning the world's output from a surplus of 30,000 tonnes a year to a deficit of 20,000 tonnes.
BHP Billiton said it was too early to say how much disruption to production the accident would ultimately cause.
The damage caused by the skip forced the mine's main haulage system to be closed leaving it reliant on a back-up system which can only handle around 20% of output.
Macquarie said reduced output combined with a recovery in demand from the construction and electrical industries and restocking by Chinese manufacturers would “restore market balance”.
