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Rio Tinto expects copper supply to stay tightFont Size: Decrease Increase Print Page: Print Jeffrey Sparshott |

September 13, 2008

MINING giant Rio Tinto expects historically high levels of copper supply disruptions to keep the market tight in the coming years, according to chief executive for copper Bret Clayton.

"We firmly believe we will continue to see higher levels of disruption than we have seen in the past," Mr Clayton said yesterday.

He was responding to a question on the effect of an incident at the Grasberg mine in Indonesia, operated by Freeport-McMoran Copper and Gold and 40 per cent-owned by Rio Tinto.

On Wednesday, Freeport cut its copper production outlook for 2008 by about 67,000 tonnes after a "small-scale" failure at the mine.

Mr Clayton said such disruptions were becoming more common and resulted from technical issues as mines move deeper into the earth.

"We've seen much higher levels of disruption -- 4-6 per cent compared with the historical average of 2-4 per cent," he said.

"And we think this is going to continue to impact on the supply response in what is a very tight market."

The Grasberg failure will reduce Rio Tinto's copper group earnings slightly this year. "It's tens of millions (of dollars) not hundreds of millions. It's not huge," he said.