METALS-Copper hits three-week high on DRC mine woes, soft dollar

By Polina Devitt and Eric Onstad

LONDON, May 23 (Reuters) - U.S. copper prices rose to their highest in more than three weeks on Friday, buoyed by a weaker dollar and worries about problems at a big mine in Congo.

U.S. Comex copper futures HGc3 climbed 3% to $4.82 a lb, the strongest since April 30.

Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) gained 1.2% to $9,617 a metric ton by 1630 GMT, its strongest since May 14.

Earlier base metal prices ticked lower after U.S. President Donald Trump said he would impose 50% tariffs on goods from the European Union, but bounced back as the dollar index .DXY fell to its lowest in over three weeks.

A weaker U.S. currency makes dollar-priced metals more attractive for buyers using other currencies.

Copper was also bolstered by concerns about the huge Kamoa-Kakula copper mine in the Democratic Republic of Congo, the biggest copper producer in Africa and one of the world's largest.

China's Zijin Mining warned that a suspension of activity due to seismic activity may have an "adverse impact" on achieving planned production this year of 520,000 to 580,000 tons.

"It sounds fairly bad and obviously it's a pretty big mine," said Dan Smith, managing director at Commodity Market Analytics.

Co-owner Ivanhoe Mines IVN.TO, however, disputed Zijin's statement, saying an investigation was still in progress.

Copper inventories in warehouses monitored by the Shanghai Futures Exchange CU-STX-SGH fell 9% to 98,671 tons this week, while stocks in the LME-registered warehouses MCUSTX-TOTAL lost 8% to 164,725 amid continuing inflows into the COMEX-owned warehouses HG-STX-COMEX. The COMEX inventories are up 3% at 174,607 this week.

In the LME system, the spread between the cash against the three-month copper contract CMCU0-3 remained at a premium, indicating some tightness for the nearby supply due to the outflows from the stocks.

The premium, known as backwardation, was last at $32 per ton.

Meanwhile, LME aluminium CMAL3 rose 0.4% to $2,466.50 a ton; zinc CMZN3 added 0.3% to $2,705, nickel CMNI3 gained 0.7% to $15,605, lead CMPB3 climbed 1.1% to $1,991 and tin CMSN3 advanced 1.6% to $32,910.

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