UPDATE 1-Codelco: Gaby output near 80,000 T copper in '08

(Updates with fresh quotes, details throughout)

By Pav Jordan

CALAMA, Chile, May 19 (Reuters) - Chile's Gaby copper mine, owned by world No. 1 copper miner Codelco, will produce around 80,000 tonnes of the metal in 2008, the firm's chief executive said on Monday.

Codelco Chief Executive Jose Pablo Arellano said during a visit to the mine that Gaby would be ramped up to full capacity of about 150,000 tonnes per year of copper in August.

"This year we will produce around or even a little more than 80,000 tonnes, given we will only be in production for half a year," he told reporters.

He said output at the $1.024 billion mine will be expanded further to 165,000 tonnes per year in a second phase.

Codelco is in an expansion phase meant to help offset a slide in output at the mining giant in recent years amid falling grades at aging mines.

The Gaby mine is currently the only greenfield expansion project at Codelco, which is in the middle of an ambitious expansion across its five divisions.

Codelco's production came in at 1.583 million tonnes in 2007, not including its stake in a joint venture mine with Freeport-McMoRan Copper & Gold Inc (FCX.N), El Abra.

Output has been curtailed this year by a subcontractors' strike at three divisions and the Gaby start-up is about two months behind schedule.

"We expect to recover lost production," said Gaby plant supervisor Gerardo Morales.

Codelco's overall output is expected to hit the 1.7 million tonnes per year level in 2009 and 2010, without its stake in El Abra.

Codelco is also planning a major expansion at its Andina division and a conversion of its largest mine, Chuquicamata, into an underground operation from an open-pit operation.

At Radomiro Tomic, part of the Codelco Norte division together with Chuquicamata, Codelco is developing a new project to exploit sulphides. (Editing by Simon Gardner and Marguerita Choy)