The quest by Chile's giant Collahuasi copper mine to find a new route to resume shipments in the wake of a port accident that halted its exports may be hobbled by environmental and logistical hurdles.

The struggle by the world's No. 3 copper mine to find a new port with appropriate docking facilities and permits appears set to prolong global supply fears that pushed copper prices to a new record.

The giant mine, which produces 3.3% of the world's mined copper or 535,000 tons per year, suspended shipments after a shiploader accident killed three workers and closed its Patache port terminal over the weekend.

The mine declared force majeure -- essentially freeing it from liability if it cannot deliver copper shipments to buyers on time. A senior port official said repairs could take at least a month.

The best option, the Patillos port, just 5 km (3.1 miles) north of Patache, requires Collahuasi to have environmental permits to export from the facilities, which are used mostly to load salt. The main user of the port, salt producer Sociedad Punta de Lobos, has tripled salt exports due to the cold snap freezing roads in Europe, signaling another roadblock for Collahuasi.

"Geographically it makes sense, but I doubt they can get the permits," said a former senior Collahuasi executive. "Salt is not a contaminant so the environmental standards at salt ports are very different from those of a mine port."

Other mining ports are either too far, lack immediate docking space or don't have the needed infrastructure to transport the material, experts said.

Both the Angamos and Mejillones ports have the size and infrastructure to handle copper from Collahuasi, although they are both located about 200 km (124 miles) south of the mine's sea terminal. Another big port, Antofagasta, is even more removed.

The long distances are a hassle for Collahuasi that will likely need environmental permits to transport by road the dry copper concentrate, which is a dusty material considered a contaminant.

"Logistics now seem like a real nightmare for Collahuasi," said a Santiago-based trader. "I don't think they will be able to ship much out via other big ports immediately."

Operational Risks
Collahuasi has now declared force majeure twice this year, which could hit its annual output target. A protest by temporary workers forced the mine to briefly shutdown operations in May.

The latest export disruption also comes on the heels of a month-long workers strike and could harbor more risks to operations.

Industry experts said that if the export stoppage drags on for too long, the mine could have to lower output as inventory capacity reaches its limit.

Collahuasi represents more than a third of Anglo American's annual copper output and about a quarter of Xstrata's mined copper, according to available data.

Still, Collahuasi could have some breathing room after it loaded some 52,000 wet tons of copper concentrate in several shipments in December alone.

A mine spokeswoman said it continues to search for alternative routes and operations remained normal.

Collahuasi produced 43,126 tons of copper cathodes and 492,727 tonnes of concentrate in 2009 -- most of which was sold to China, India and Japan, according to the company's annual report. (Reuters)