Argentine mining company Minera Alumbrera Ltd. said Tuesday its
key port along the Parana River isn't able to receive or load
copper-gold concentrates due to a strike that has closed
neighboring ports used by grain exporters to ship their products to
global markets.
"We have a certain amount of storage capacity. We might be a few
weeks away from shutting down" the filter plant, Raul Mentz, the
company's sustainable development director, told Dow Jones
Newswires.
The filter plant separates water from copper-gold concentrate
that is transported to a railroad depot from the mine by a slurry
pipeline. The concentrate is then shipped to the port by rail.
Mentz estimated the company can continue to operate the filter
plant for about two weeks, after which time concentrate will have
to be stored near the mine.
Alumbrera has storage capacity for 60,000 tons of concentrate at
its port and about 40,000 tons at other locations, including its
mill, rail cars and filtering plant, he said, adding that it's too
early to say how much of its storage capacity outside of the port
is available.
The open pit mine, Bajo de la Alumbrera, has annual production
capacity of 150,000 metric tons of copper and 400,000 ounces of
gold in concentrate, according to the website of the mine's biggest
shareholder, Xstrata PLC (XTA.LN). The mine also has capacity to
produce about 1,600 tons of molybdenum concentrate a year, which is
trucked to Chile for processing.
Minera Alumbrera is operated by a subsidiary of global mining
giant Xstrata, which owns 50% of the company. Canada's Goldcorp
Inc. (GG) and Yamana Gold Inc. (AUY) own 37.5% and 12.5%,
respectively.
Alumbrera has become the latest casualty in a labor conflict
that started last Wednesday, when unions affiliated with a chapter
of Argentina's powerful labor-umbrella group, the Confederacion
General de Trabajo, or CGT, blocked access to port terminals near
the city of San Lorenzo to demand a higher minimum wage.
The CGT unions represent people indirectly linked to the ports
and related oilseed crushing plants who work in activities ranging
from trucking to food service.
Mentz said Alumbrera's employees aren't involved in the
strike.
Alumbrera shares a common main entrance with five other ports.
With the main gate blocked by picketing union workers, Mentz said
Alumbrera's employees can't get to the company's port, nor can
copper-gold concentrates be brought in by rail.
Alumbrera Tuesday asked the Labor Ministry to intervene in the
labor dispute at San Lorenzo, Mentz said, adding that its next ship
is scheduled to dock in late February.
Located at 2,600 meters above sea level in Argentina's Andean
province of Catamarca, Alumbrera started operations in 1997.
Concentrate is pumped through a 316-kilometer slurry pipeline to
Cruz del Norte, Tucuman province, where it's then carried about
1,000 kilometers by rail to be loaded onto ships bound for
international markets. The port can handle Panamax-size vessels,
according to Minera Alumbrera's website.
Copper prices hit fresh records Tuesday, thanks to the
continuing recovery in global manufacturing. The most actively
traded copper contract, for March delivery, jumped 8.85 cents, or
2%, to settle at $4.5470 a pound on the Comex division of the New
York Mercantile Exchange.
Copper traded on the London Metal Exchange also closed at a
record $9,945 a metric ton, roughly equivalent with New York
prices, and later traded even higher.
The already optimistic outlook for world copper demand was
further bolstered by several indicators. U.S. manufacturing
activity in January rose to its highest level since May 2004,
Chinese purchasing managers' indexes registered growth and
euro-zone manufacturing jumped to a nine-month high.
The pickets in the San Lorenzo area have affected at least 10
ports and crushing plants belonging to major grain and edible oil
exporters like Bunge Ltd .(BG) and Cargill.
Alberto Rodriguez, president of the industry trade group
representing Argentina's edible-oil makers and grain exporters,
CIARA-CEC, said Tuesday the strike has delayed 46 ships, forcing
some of them to moor well downstream.
About three-quarters of Argentina's agriculture exports are
shipped from river ports clustered around the city of Rosario.
Argentina leads the world in soymeal and soyoil exports and is the
third-largest soybean exporter.
San Lorenzo, located about 12 miles north of Rosario, is home to
a dozen ports that handle wheat, corn, soy, soymeal, soyoil and
related products.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740;
ken.parks@dowjones.com
--Matt Whittaker contributed to this article.
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