Mexican copper strike to hit output soon

By Frank Jack Daniel and Tomas Sarmiento

MEXICO CITY (Reuters) - Mining giant Southern Copper Corp. (PCU.N: Quote, Profile, Research, Stock Buzz)(SPC.LM: Quote, Profile, Research, Stock Buzz) said on Wednesday a strike at its massive La Caridad mine in Mexico will begin to hit output if it does not end soon.

Chief Financial Officer Eduardo Gonzalez told the Reuters Latin America Investment Summit, the strike, now in its sixth day, would hurt production from La Caridad's smelter complex if it stretched to 10 days.

The smelter is currently running using inventories and copper concentrate from the company's nearby Cananea mine.

"You have more or less eight to 10 days of inventory at the smelter," he said. "If it continues more than 10 days it will have an impact. We think this is going to lift relatively quickly and have an impact relatively ... minor."

The strike started when a split over worker loyalty to a union boss brought down contract negotiations.

Juan Rebolledo, vice president of international relations at Southern Copper parent Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research, Stock Buzz), said the company had asked the state government to declare the picket line blocking the mine illegal and for permission to enter forcibly if necessary.

"We have been told that we will have an answer in the next few days ... this week," Rebolledo said.

Gonzalez expected a decision on the purchase of BHP Billiton's Tintaya copper mine in Peru within two months. Billiton is in talks with a number of companies, including Southern Copper, to sell the mid-size mine.  Continued...