SANTIAGO, July 11 (Reuters) - World No. 1 copper producer Codelco is mulling selling some nonessential assets to finance its investment plan after the Chilean government allocated the state-owned miner less money than it wanted, a local newspaper reported on Thursday. Codelco is in the midst of a long-term plan to boost output from its massive but aging mines. It intends to spend about $27 billion to boost annual output from roughly 1.7 million tonnes to more than 2 million tonnes in coming years. The miner was disappointed with the $1 billion Chile's government said last week it would return to Codelco, which produces roughly 11 percent of the world's red metal. "We've looked around Codelco to see what assets we can do without, (assets) that we could make liquid," Chairman Gerardo Jofre was quoted as saying by the newspaper Pulso. Additionally, the company has said it is reassessing some investments in the wake of the disappointing capitalization levels to ensure financial responsibility. It could also seek to issue more debt to fund spending. Codelco hands over all its profits to the government. The battle for capital comes as Codelco is struggling to rein in soaring costs as global copper prices tumble.