UPDATE 2-Chile's Antofagasta to close Lince copper mine

(Adds analyst comment, shares)

LONDON Jan 14 (Reuters) - Chilean copper miner Antofagasta Plc (ANTO.L) will close its small Lince open pit mine because it is not viable due to falling metal prices, the company said on Wednesday.

The London-listed company said copper cathode production at its Michilla unit from its underground mine would be 38,000 tonnes in 2009 after the loss of about 7,000 tonnes due to the closure of Lince, which has higher costs.

Michilla is relatively small, accounting for around 10 percent of the firm's output, which was estimated to rise 8 percent in 2008 to around 463,000 tonnes.

Analyst Fraser Jamieson at Cazenove said the move was slightly positive for the group since the closure would likely result in Michilla breaking even in 2009 instead of suffering a $30 million loss.

Jamieson, who reaffirmed an "in-line" rating on the company, estimated the closure would increase Antofagasta's group earnings per share by 7 percent this year.

"While this appears to be a sensible move to remove uneconomic capacity from the portfolio, the impact on our numbers is small and the valuation premium remains in place," a note said.

The closure would lead to about 70 job losses, leaving the Michilla operation with 440 employees and 1,000 contractors, it added.

"Michilla will continue to review the longer-term future of the mine over the following months taking into account the current copper price environment and the interests of the Antofagasta group in the district including the Antucoya project," a statement said.

Benchmark London Metal Exchange copper prices MCU3 have tumbled 63 percent since touching a record in July.

Antofagasta shares, which have rebounded by 42 percent since touching a low in October, fell 4.7 percent to 390.75 pence by 1423 GMT, compared to a 6.5 percent decline in the UK mining index .FTNMX1770 (Reporting by Eric Onstad, Editing by Peter Blackburn and Sue Thomas)