Codelco Boosts Copper Output After Mine Investments (Update1)

May 27 (Bloomberg) -- Codelco, the world's biggest copper producer, said first-quarter production rose 3 percent after it stepped up output in northern Chile.

Output climbed to 402,000 metric tons from 390,000 a year earlier, the state-owned company said today in a presentation in Santiago. Production in the company's Norte division rose 17 percent to 205,139 tons. Revenue soared to $505 million, up from $69 million a year ago.

The company's largest Norte division boosted production because of "better ore grades," Luis Farias, vice president of management control, said today at a presentation in Santiago.

Codelco, which supplies about 10 percent of the world's mined copper, last year made record investments in its mines after four years of declining production. Billionaire Chilean President Sebastian Pinera said May 11 the government will spend $15 billion over the next five years to revamp mines, some of which are a century old.

Last year's output increased to 1.78 million metric tons of copper, the highest since 2005, from 1.55 million tons in 2008.

Diego Hernandez, the former president of BHP Billiton Ltd. who was appointed by President Pinera, took office in March to revive sagging output. At BHP, Hernandez helped boost copper production 27 percent to 1.2 million tons in the year ended June 2009 from the same period in 2004, when he took over as head of its base metals division, according to company data.

Earthquake Losses

Codelco lost more than 22,000 metric tons of production because of an earthquake that disrupted supply and an acid shortage at its Gabriela Mistral mine in Chile's Atacama desert.

Chile was struck by an 8.8-magnitude earthquake on Feb. 27, the fifth-largest recorded in the world in the last century.

Pinera also appointed Gerardo Jofre, a former Banco Santander SA executive, as chairman of the company that employs almost 20,000 people.