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In the aftermath of the magnitude-8.8 earthquake that jolted central Chile on Saturday, details regarding the extent and geographical scope of the damage are still filtering in. Scenes of destruction from areas near the epicenter, including Chile's second-largest city of Concepcion, provide a glimpse of the ferocity of this tremor.
While national response efforts are focused on the enormous human tragedy involving some 2 million displaced Chileans, publicly held mining companies with operations in Chile provided updates about the extent of damage or interruptions to mining operations.
Chile is the world's leading supplier of copper. Accordingly, the red metal is a mainstay of an economy that will need all the strength it can muster for the long road to reconstruction. Fortunately, with the exception of some power losses and questions about near-term access to consumables like fuel, the mining industry appears to have emerged relatively unscathed.
In the immediate aftermath of the quake, mines representing some 20% of Chile's production were shut in temporarily, and copper prices reacted Monday with a small surge above $3.30 per pound.
Closer to the quake
Chile's state-run Codelco is the largest copper producer in the world, and its flagship El Teniente mine was among two Codelco mines closed following the quake due to power outages. Perched up in the Andes mountains less than 100 kilometers southeast of the capital city of Santiago, El Teniente is closer to the quake zone than the majority of Chile's major copper mines (which are concentrated further north). Still, no structural damage to the mine was reported, and operations resumed Sunday. Codelco's Andina mine resumed operations Monday.
Despite these speedy restarts, important questions remain about access to services and infrastructure for mines in these more southerly areas closer to the quake zone. With critical roadways and other infrastructure reportedly damaged, it is not yet clear whether adequate mine supplies can make their way in, or copper can make its way out to working export terminals.
Just north of Santiago
Proceeding northward about 350 kilometers from Chile's capital city of Santiago, we encounter another major concentration of world class copper mines near La Serena and Copiapo. Teck Resources (NYSE: TCK ) reports active mining under way at the Andacollo mine, stating that operations were only "minimally affected."
Freeport-McMoRan Copper & Gold's (NYSE: FCX ) Candelaria mine restarted operations Monday, but the company's indication of persistent power supply problems suggests that the mine may be operating at reduced capacity. Freeport reported no structural damage to the Candelaria mine, and reports that the El Abra mine in northern Chile remains unaffected by the quake.
Both Barrick Gold (NYSE: ABX ) and Kinross Gold (NYSE: KGC ) have sounded the all-clear for their Chilean mining operations, which include Kinross' Maricunga and La Coipa mines near Copiapo; and in Chile's far north Barrick's Zaldivar mine. No detailed reports have emerged as yet relating specifically to these companies' significant development projects in the region near La Serena and Copiapo; namely: Barrick's massive Pascua-Lama gold and silver project, Kinross' Lobo Marte, and their joint venture project at Cerro Casale. Goldcorp's (NYSE: GG ) newest prospective treasure at El Morro is also situated right in this area.
Chile's far north
If you own shares of a company with mining operations in Chile's far north, all indications at this stage suggest that mining operations there remain unhindered by the quake. BHP Billiton (NYSE: BHP ) and Xstrata issued a clean bill of health. SQM (NYSE: SQM ) -- which produces products like iodine, lithium, and nitrates from mines in northern Chile -- indicated that nearby port facilities as well as all of its production facilities suffered no damage from this earthquake.
This Fool will continue to track developments as they emerge relating to these and other mining companies and their ability to restore full operational capacity with access to power, roads, port facilities, and other essential components of mining and mine development operations. Please stay tuned for additional information by following my reports on Twitter.