Chile Copper Strikes Could Cause Prices to Soar

In a strike over pay and benefits, workers in Chile copper mines have created the potential for price increases as global supplies could come under pressure.

Along with the shutdown of Codelco's El Teniente mine, the state also shut down the Salvador and Andina mines over the strike.

The largest underground copper mine in the world, El Teniente, has also been blocked by hostile miners. Chile produces about 40 percent of copper globally.

The copper production in Chile has already been hurt by electric shortages as a nationwide drought has created shortages in hydro-electric power generators, as water levels remain low.

Copper is expected to continue to grow at an annual rate of 3.7 percent through the next ten years, as demaand continues to increase. That would bring consumtion to 27 million tons.

With the slowing housing market in the U.S., China has now become the No. 1 consumer of copper in the world.

Cooper prices have soared by 28 percent so far in 2008, with projections spot copper could end the year at $4.10 a pound, or $9,000 a ton. In 2009, projections are it could reach $10,000 a ton.