UPDATE 1-S Copper to move ahead with Toquepala expansion

(Adds quote, context)

LIMA, June 18 (Reuters) - Southern Copper (PCU.N) will move ahead with an expansion project of its Peruvian mine Toquepala, reversing an earlier decision to put it on hold, the company's chief executive said on Thursday.

Construction work expected to lift the mine's annual copper output to 100,000 tonnes from 60,000 tonnes now, could start in the middle of 2010, Chief Executive Oscar Gonzalez said.

"In the second half of this year, we will start with engineering details and if everything looks good ... around the middle of next year, we may begin construction," Gonzalez told reporters at a mining conference in Peru's capital, Lima.

He said the decision to restart expansion operations at Toquepala followed the recent rise in copper prices, which plummeted on the global economic slowdown, but have begun to climb back.

Southern Copper, a unit of Grupo Mexico GMEXICO.MX, expects to produce around 500,000 tonnes of copper this year, between its Mexican and Peruvian mines, said Gonzalez. (Reporting by Teresa Cespedes and Dana Ford; Editing by Bernard Orr and Clarence Fernandez)