* Reductions from Escondido, Grasberg could cut output 5,000 T/day
* Escondido union warns strike could be lengthy this time
* Freeport still trying to work out permit renewal for Papua mine (Recasts to focus on supply disruptions at world’s two biggest copper mines)
By Wilda Asmarini
JAKARTA, Feb 8 (Reuters) - Disruptions at the world’s two biggest copper mines by strikes and other issues this week are threatening to reduce global supplies of the metal, pushing benchmark prices back towards their highest levels for the year so far.
BHP Billiton said it would halt output in Chile at its Escondida mine, the biggest copper producer, during a strike to begin on Thursday. Freeport-McMoRan Inc warned it will scale back output at its Grasberg mine in Indonesia, the second-biggest, amid a smelter strike and issues over renewal of its mining permit.
Three-month copper on the London Metal Exchange gained more than 2 percent during trading on Wednesday to $5,925 a tonne on the supply threat, with analysts noting they had already been expecting tighter supplies this year.
Standard Chartered estimated that more than 5,000 tonnes of copper production would be lost each day that both BHP and Freeport were curtailing or halting output at their mines.
In Indonesia, a strike at the country’s biggest copper smelter, which is Freeport’s sole domestic offtaker of copper concentrate, has added to the company’s woes.
Freeport had warned last week it could be forced to cut staff and production at Grasberg if it did not get a new export permit by mid-February.
Freeport Indonesia spokesman Riza Pratama on Wednesday confirmed by text message that the company planned to begin copper output cuts.
“We are still negotiating with the government,” Pratama told Reuters, looking for a “way out so that we can export again.”
Concentrate exports from the mine in Papua, Indonesia, were halted on Jan. 12 as part of Indonesia’s push to add value domestically to natural resources.
In Chile, the main union for workers at Escondida said that unlike other recent labour actions the strike scheduled for Thursday could be lengthy.
Standard Chartered said a strike of 25 days would equate to lost output of 85,000 tonnes, more than an expected global surplus of 80,000 tonnes.
The threat of the output reductions also boosted Shanghai Futures Exchange copper by nearly 2 percent.
Swiss investment bank UBS said tight copper supplies this year, along with the disruptions, could push prices for the metal to $3 a pound, or more than $6,600 a tonne, which would be the highest for the metal since November 2014.
Reporting by Wilda Asmarini; Additional reporting by Susan Taylor; Writing by Fergus Jensen; Editing by Tom Hogue