Chile miners saga unlikely to hurt copper industry

LONDON (BestGrowthStock) – As Chile frees miners trapped for months after a cave-in, the government will continue to shut old, decrepit mines, but the clampdown is unlikely to hit copper output in the world’s top producer, industry insiders say.

The survival against the odds of the 33 men who have endured more time stuck underground than any miners previously has attracted world-wide attention and support, from Pope Benedict to English football stars and presidents.

The August 5 collapse that trapped the miners 700 meters underground has exposed the deficiencies of the powerful Chilean mining industry, but those in the industry say any regulatory reforms are not expected to have much impact on the big mines.

“We need to give more support to small and medium mines on safety. They play an important role in the local economy, but not too much on volumes of copper,” said Diego Hernandez, the CEO of Chile’s state-run Codelco, the world top copper producer.

“Big mines in Chile have some of the best safety standards in the world.”

Industry players meeting in London for the LME Week paid close attention to the San Jose mine rescue, one of the most challenging mining rescues ever attempted and its impact on the industry of the mining powerhouse.

Since the accident, President Sebastian Pinera’s government has clamped down on small mines, shutting down dozens in the mineral-rich Atacama desert in the north over safety.

“Changes in regulation will not affect us. We have the highest safety rate among industries in Chile,” Javier Cox, the director of the Mining Council lobby group that represents the country’s top miners, told Reuters in London.

“This is more likely to hit small and medium mines … however, they produce a small percentage of the country’s copper output.”

So far, 15 of the 33 trapped miners had been hoisted to safety in a cramped rescue capsule on Wednesday, cheering and punching the air as they hugged their families in tears.

Chile produces about a third of the world’s copper and supply disruptions in the South American country catapults copper prices, already at over two-year highs.

Hundreds of dilapidated, century-old mines dot the desert, employing thousands willing to risk their lives for a steady paycheck.

Other San Jose mine workers on the surface have said the miners knew the deposit lacked basic safety conditions, but chose to work there anyway.

The trapped miners include a former soccer star down on his luck, a Bolivian migrant seeking a better life and a 19-year-old who became a father only months before the mine accident.

Pinera, a self-made billionaire who wants to increase tax on mining companies, has introduced legislation to bolster safety regulation and boost the budget of the industry’s watchdog.

Big mining companies, including global giants like state-run Codelco and BHP Billiton (BHP.AX: ) (BLT.L: ) extracted about 95 percent of the 5.4 million tonnes Chile produced last year.

(Reporting by Alonso Soto; Editing by Elizabeth Fullerton)

Chile miners saga unlikely to hurt copper industry