Updated from 11:41 a.m. EDT

Copper prices were getting a lift Friday after the announcement from megaminer BHP ( BHP) that it was closing the Escondida copper mine it co-owns with Rio Tinto ( RTP) after talks with striking miners broke down.

Workers at the mine, which is located in Chile and supplies 8% of the world's copper, have been off the job since Aug. 7, demanding improved pay commensurate with the soaring value of the metal.

The news gave a boost to copper futures, with September contracts closing up 7.7 cents at $3.425 a pound in action on the Comex division of the New York Mercantile Exchange. The contract traded as high as $3.465 earlier on.

BHP took the steps to close the facility after the union blocked access to the mine, according to management. Previously, the plant had been operating at 40% capacity.

"We were no longer unequivocally able to guarantee the health and safety of our employees, which is our No. 1 priority," says Illtud Harri, spokesman for BHP.

The reaction in the copper patch seemed generally positive with U.S. miner Phelps Dodge ( PD) trading up 0.2% lately, while Freeport-McMoRan Copper and Gold ( FCX - Get Report) was gaining 1.4%.

Southern Copper ( PCU) and BHP were also up, adding about 0.5%. Rio Tinto was the odd man out, losing 0.1%, recently.

"Things have deteriorated significantly over the past 24 hours," says Neil Buxton, managing director at specialty consulting firm GFMS in London. "If you look at what happened to nickel prices when physical metal was in short supply, then it's clear that a return to $4-a-pound copper is highly likely if the closure continues for any length of time."

Nickel prices reached record highs Wednesday as London Metal Exchange stocks dwindled and shorts had difficulty covering positions because of the scarcity of physical metal. The eye-popping high prices above $30,000 a ton ($13.60 a pound) have subsequently retreated after the LME imposed trading restrictions in order to maintain orderly market conditions.

News that Ford Motor ( F) will slash car production 21%, however, won't be enough to help ease supply tensions about the base metals, experts say.

"Its not that people will buy fewer cars, just smaller ones and perhaps foreign vehicles," says Jason Schenker, an economist at Wachovia, noting that for wiring purposes a smaller vehicle would not yield much in terms of reduced copper usage.

Among precious metals, the gold market sank again with December futures ending the session $3.60 lower at $621.50 on the Nymex, as more news of an economic slowdown hit the market. Crude, which was trading up 99 cents at $71.05 a barrel on the Nymex recently, failed to provide any buoyancy for gold.

The Economic Cycle Research Institute's weekly leading index showed a decline of 1.4% for the week ending Aug. 11 vs. a decline of only 0.8% previously, providing another data point in a mosaic of weaker economic conditions in the U.S. economy. iShares Comex Gold Trust ( IAU) and streetTracks Gold Shares ( GLD) edged down with the metal.

Gold mining stocks were moving down in concert, including Gold Fields ( GFI), down 2.6%, Kinross Gold ( KGC - Get Report), 3.6% lower, Stillwater Mining ( SWC), off 3.1%, and AngloGold Ashanti ( AU), losing 4.5%.

Standing out as a winner was North American Palladium ( PAL), moving up 4.5% recently despite a falling palladium price. Futures for the metal closed down $1.30 at $333 an ounce on the Nymex.