Aug 30, 2012 (Dow Jones) SANTIAGO, Chile--Copper output in Chile, the world's largest copper producer, surged 9.8% year-on-year in July to 414,339 metric tons, the government statistics agency said Thursday.

The National Statistics Institute, or INE, attributed the gain to a low basis of comparison as workers at the BHP Billiton Ltd. (BHP, BHP.AU)-controlled Escondida copper mine went on strike in July 2011, which curbed output that month last year.

For the first seven months of the year, Chile produced 3,058,611 tons of copper, an increase of 3.4% when compared with January-July 2011.

Last year, Chile produced 5.25 million tons of the industrial metal, which represented a decrease of 3.2% from what it mined in 2010.

As well as mining roughly a third of the world's copper, Chile also is one of the leading producers of molybdenum, iodine, lithium, gold and silver. The mining industry represents about 15% of the country's gross domestic product, according to the central bank.

Molybdenum output in July retreated 5% year-to-year to 2,647 tons, due to lower ore grades, INE reported.

Molybdenum, which is used to harden steel, and precious metals such as silver and gold are often found as byproducts at Chilean copper mines.

In January-July, molybdenum output fell 18% year-on-year to 18,120 tons. Last year, production of the metal rose 10.7% to 40,994 tons.

Gold production decreased 2.3% on the year while silver production fell 15.6%, INE reported without providing output figures.