UPDATE: Chile July Copper Output Tumbles 18% To 373,498 Tons

Aug 30, 2011 SANTIAGO (Dow Jones)--Chile copper production tumbled 18% on the year in July, to 373,498 metric tons, the government statistics agency said Tuesday.

The July decline was the result of mine strikes and severe weather, which curtailed production, said the National Statistics Institute, or INE by its Spanish abbreviation, without naming specific companies.

Striking union workers kept production at the world's biggest copper mine, the Escondida mine, at a standstill for the last ten days of July. Escondida is controlled and operated by global miner BHP Billiton Ltd. (BHP, BHP.AU).

January-July copper production fell 4.2% year-over-year to 2,951,372 tons, the INE said.

The South American nation produces annually a third of the world's copper.

The production of copper contained in concentrates fell 17.4% year-on-year in July to 165,538 tons, due to the mine strike and adverse weather, the INE said.

Output of copper cathodes dropped 13.2% on the year to 197,532 tons, the institute said. Cathodes, large sheets of 99.99% pure copper, have a higher added value than concentrates, as concentrates must be smelted to get the purer form of the metal. The country also produces other forms of copper, such as blister, but in very small amounts.

As well as being the world's largest copper producer, Chile is also one of the leading producers of molybdenum, iodine, lithium, gold and silver. The mining industry represents some 19% of the country's gross domestic product.

Molybdenum output in July slipped 7.8% year-on-year to 3,050 tons. January-to-July production of the metal used to harden steel rose 21.1% to 24,345 tons.

Gold production rose 5.0% year-on-year in July to 3,375.1 kilograms, while silver production declined 6.5% on the year, the INE said without providing additional details.

Both these precious metals, as well as molybdenum, are often found as byproducts at Chilean copper mines.