UPDATE 2-Chile copper output falls in December, up 3 pct in 2012
* December output down on ore grades, maintenance work * Red metal annual output highest since 2007 * World No.1 copper miner Chile seen boosting output this year SANTIAGO, Jan 30 (Reuters) - Chile produced 513,344 tonnes of copper in December, a 1.8 percent slip from a year earlier, but boosted its output of the red metal by 3 percent to 5.455 million tonnes during all of 2012, the government said on Wednesday. December output in the world's No. 1 copper producer fell on lower ore grades and maintenance work in certain mines, the INE statistics agency said. Annual output rose last year to its highest since 2007, according to data from state copper commission Cochilco and the statistics agency. "Among the factors that explain this rise are better ore grades in some deposits, production increases in mines that began operating in 2011 and a low base of comparison due to a strike that affected an important mining company in July 2011," the agency said. World No.1 copper mine Escondida's union stunned the copper market in 2011 by staging a two-week strike, sending the mine's output tumbling and raising the specter of an increase in labor action. Cochilco had estimated 2012 copper output at 5.45 million tonnes in November, but Mining Minister Hernan de Solminihac had said in April that production would reach a whopping 5.7 million tonnes. Many analysts at the time had called his forecast too ambitious. On Monday Cochilco said Chile's copper output in 2012 reached 5.433 million tonnes. Chile is expected to produce 5.596 million tonnes of copper this year, up 3 percent from 2012 levels, as heavy investment in mines pays off, Cochilco also said on Monday. Cochilco said a pick-up at state copper producer Codelco's century-old Chuquicamata deposit and the launch of its Ministro Hales mine at the end of the year will help lift output of the metal, which is used in construction and power generation and transmission. But analysts have warned that several factors threaten forecast jumps in production, including deteriorating ore grades, delays to key energy and mining projects, and operational woes. Chile's molybdenum output nosedived 25 percent in December year-on-year to 2,008 tonnes. Production posted a 16.6 percent tumble to 30,155 tonnes in 2012 from 2011 levels.
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