Codelco Sees Copper Output up, World

Sep. 29 (Reuters) - Chilean miner Codelco, the world's top copper miner, expects its copper output to rise above 1.8 million tonnes this and next year while global supply has struggled to meet demand, the firm's chief executive said on Wednesday.

A presentation by CEO Diego Hernandez showed the company sees total output, which includes its stake in El Abra mine, rising to 1.82 million tonnes in 2010 and 1.84 million in 2011. It also showed output dropping to 1.76 million in 2012, although, the firm did not include production from its smallest division Salvador.

A company spokesman said Codelco did not include El Salvador figures for that year as it still decides on the details of a plan to extend the life of the deposit.

In 2009, Codelco saw output increase for the first time since 2005 as the state-run miner invests to maintain output at century-old mines and increase extraction at younger mines, Gaby and Radomiro Tomic.

Hernandez said world supply has struggled to meet demand as new copper projects worldwide show lower ore grades and are increasingly more expensive to develop.

He added that current projects will remain highly profitable under current prices while new projects will enjoy "normal" returns.

Codelco foresees output at Chuquicamata, once the world's top copper mine, down by 100,000 tonnes to 294,000 tonnes in 2012. Production at other aged mines like El Teniente is expected to remain steady at 419,000 tonnes in 2012.

Codelco, which produces around 11 percent of the world's mined copper output, is going through deep changes under Hernandez, the former head of base metals for competitor miner BHP Billiton (BHP.AX) (BLT.L).

Hernandez is creating new mining divisions and organizing all the mines under two vice-presidencies that report to him directly. He has also started a retirement plan to reduce the workforce by 15 percent or 3,000 workers as he aims to increase efficiency.

His tough management style has clashed with the company's powerful unions, but reforms and the retirement plan are not seen sparking protests or strikes that hit output, union sources said.