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Earthquake disrupted many nonferrous metals operations in Peru

By Tom Stundza -- Purchasing, 9/13/2007

A 40,000 metric ton/year Funsur tin refinery in Pisco has been closed indefinitely because of damage from a major earthquake that struck Peru in mid-August. Also closed for now is Minsur's tin mine at San Rafael, which supplies concentrate to the refinery.

As a precaution against further seismic activity, lead-zinc miner Compania Minera Milpo closed the Cerro Lindo mine for a time that had only opened in July after a $110 million investment. It has since reopened on a limited schedule, as has the Corporacion Aceros Arequipa steel products mill.

Peru is a leading minerals producer and many plants have been made inaccessible since sizable chunks of the Pan-American Highway, which travels along the Peruvian coast linking most of the country's major cities, were destroyed during the temblor. Platt's Metals News reports that there has been limited restoration of power in the region where the earthquake hit, about 150 miles south of Lima. Authorities have told news services that more than 500 people were killed and more than 800 injured in the deadliest earthquake in more than 35 years. The earthquake also flattened more than 16,700 homes and reportedly left tens of thousands of people homeless.

None of the three Pan American Silver mines in Peru sustained any significant damage from the earthquake. The Quiruvilca mine was completely unaffected, according to a statement by Geoff Burns, CEO of the Vancouver company. Inspections at the Huaron and Morococha mines found minor rock falls in a limited number of underground production zones but no damage to any of the surface facilities or related infrastructure.

Melbourne, Australia-based BHP Billiton said there was no impact on its Antamina copper and zinc mine. Toronto-based mining companies Barrick Gold and Cominco say their operations in Peru also suffered no material damage.

However, information has been spotty about the condition of operations at Newmont Mining's Minera Yanacocha and Minera Barrick Misquichilca, the biggest gold producers in Latin America, and Volcan Compania Minera's zinc facilities. Southern Copper's Cuajone and Toquepala mines and the Ilo smelter and refinery apparently were undamaged but there are labor contract talks underway with three unions that have labor and management at loggerheads. Workers have rejected the initial six-year contract offer but reportedly have decided to postpone strike action because of the earthquake.

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