Oct. 8 (Bloomberg) -- Copper rose in London on the dollar’s decline and concern about threats to supply in Australia and Chile. The Dollar Index, a six-currency gauge of the greenback’s performance, fell to the lowest since Sept. 23, 2008, on signs the global economy is recovering, bolstering demand for higher- yielding assets. BHP Billiton Ltd. may take two weeks to investigate an accident at its Olympic Dam mine in Australia that forced the closing of the main haulage shaft. “Copper is up along with the rest of the base-metal complex as the dollar hit a fresh low,” Daniel Major, an analyst at RBS Global Banking & Markets in London, said by phone. “Olympic Dam is positive for sentiment.” Copper for three-month delivery rose $184.75, or 3 percent, to $6,279.75 a metric ton on the London Metal Exchange at 10 a.m. local time. The contract climbed as high as $6,285, the highest since Sept. 23. December-delivery copper added 2.9 percent to $2.859 a pound on the New York Mercantile Exchange’s Comex unit. All of the six main industrial metals traded on the LME gained, with lead posting the biggest climb. Declines by the dollar make metals priced in the currency cheaper for holders of other monies. Copper producer Antofagasta Plc and other mining companies accounted for eight of the 10 biggest advances in the U.K. benchmark FTSE 100 Index of shares. Effect on Production BHP, the world’s largest mining company, is still producing ore at Olympic Dam. The mine produced 181,800 tons of copper cathodes in the year through June, compared to a world market of about 18 million tons. “Olympic Dam’s mine planning team is examining what impact the temporary closure of the Clark shaft will have on production, planning schedules and budget,” the Melbourne-based company said by e-mail. BHP also faces a potential strike at its Spence copper mine in Chile, where workers agreed to delay a walkout and extend wage negotiations to give the company time to sweeten a contract offer, a union official said yesterday. Employees, who had planned to down tools starting today, will now strike on Oct. 13 should BHP refuse to improve its latest offer, said Francisco Aravena, a union spokesman. Contract Talks More than 20 percent of copper mine output is “at risk” over the next three to six months because of labor contract talks, Barclays Capital said in a report yesterday. Spence, one of the first mines to negotiate contracts this year, produced 180,000 tons of copper cathodes last year, or about 1 percent of the total market, according to Standard Bank Group Ltd. “It is unlikely to have a significant impact on supply- demand dynamics in the near term,” RBS’s Major said. Refined copper supply will outpace demand by 400,000 tons in 2010, more than this year’s 350,000-ton surplus, Mitsui Bussan Commodities said in a report. Among other LME metals for three-month delivery, aluminum rose 2.1 percent to $1,882 a ton. Alcoa Inc., the largest U.S. producer, reported an unexpected third-quarter profit. “We are looking for a 10 percent year-on-year increase in annual aluminum consumption in 2010, and the Alcoa results are quite encouraging,” Major said. “It is in line with the recovery in end-user demand, which is likely to be accentuated by restocking across the depleted manufacturing supply chain.” Tin gained 0.9 percent to $14,800 a ton, and zinc added 3.6 percent to $2,006 a ton. Nickel climbed 3.84 percent to $19,350ton after reaching $19,500 the highest intraday price since Aug. 28. Lead advanced 4.3 percent to $2,248 a ton. To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net

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