* Codelco, Antofagasta (LONDON:ANTO) suspend some operations
* Anglo American (LONDON:AAL), BHP, KGHM say no impact from quake
* Coming up: Federal Reserve rate decision at 1800 GMT (Updates details, prices)
By Eric Onstad
LONDON, Sept 17 (Reuters) - Copper retreated from nearly two-month highs on Thursday after initial reports showed that a massive earthquake in top producer Chile had done little damage to mines.
Most base metals prices declined as investors refocused on concerns about demand in the biggest consumer, China, and ahead of a decision on U.S. interest rates later in the day.
Two copper operations in Chile restarted on Thursday after being suspended as a precaution in the wake of the 8.3-magnitude quake, which killed eight people and forced a million to flee their homes. ID:nC0N0Y501G ID:nC0N0Y501E ID:nL1N11M2Y6
"It caused a huge flurry of expectations but so far it appears that there really hasn't been any damage," said Stephen Briggs, metals strategist at BNP Paribas (PARIS:BNPP).
"Copper hasn't been showing huge conviction recently because there's still this worry about the demand side. Also, today's not the day for taking big bets in either direction ahead of the Fed decision this evening."
Traders were cutting risk ahead of the Federal Reserve rate decision due at 1800 GMT, which has deeply divided Wall Street's top economists. ID:nL1N11M10J ID:nL1N11M10C
The dollar weakened ahead of the decision, offering a measure of support to metals, making the dollar-denominated commodities cheaper to buyers outside the United States. FRX
Three-month copper CMCU3 on the London Metal Exchange was up 0.4 percent at $5,403.50 a tonne at 1423 GMT after hitting its highest since July 22 at $5,440.50 following initial reports of the Chile quake.
Dragging on metals, China's stock market dropped 2 percent, reflecting still-sour sentiment towards the country's growth prospects and jitters over a corruption probe. ID:nZZN2RJT00
LME zinc CMZN3 sagged 1.1 percent to $1,731 a tonne, weighed down by a surprisingly large run up in LME inventories that pushed back expectations of a market deficit.
The discount of cash zinc to three-month zinc CMZN0-3 increased to $22.50 a tonne, from $6.25 last week, indicating healthy supply, and compared with a premium of $7 in late July.
LME nickel CMNI3 slid 1.8 percent to $9,970 a tonne. The global nickel market surplus rose to 10,300 tonnes in July from a revised surplus of 7,800 tonnes the previous month, the International Nickel Study Group said. ID:nL5N11M3QO
Aluminium CMAL3 dipped 0.1 percent to $1,626 a tonne, lead CMPB3 dropped 0.6 percent to $1,723 and tin CMSN3 shed 1.1 percent to $15,490.
PRICES
Three month LME copper
CMCU3
Most active ShFE copper
SCFcv1
Three month LME aluminium
CMAL3
Most active ShFE aluminium
SAFcv1
Three month LME zinc
CMZN3
Most active ShFE zinc
SZNcv1
Three month LME lead
CMPB3
Most active ShFE lead
SPBcv1
Three month LME nickel
CMNI3
Most active ShFE nickel
SNIcv1
Three month LME tin
CMSN3
Most active ShFE tin
SSNcv1