Chile Codelco profit to fall on copper price drop-paper

SANTIAGO, Oct 15 (Reuters) - Chile's Codelco, the world's largest copper producer, expects its profit to fall sharply in coming years as prices for the red metal fall, the El Mercurio newspaper reported on Wednesday, citing an internal company document.

Citing what it called a provisional and unofficial 2009 Business and Development Plan (PND 2009) by the state miner, El Mercurio said company profit would hit $808 million in 2012, less than a tenth of record profit levels in 2006 and 2007.

Codelco could not be reached for immediate comment.

Its profit in the first half of 2008 was $4.108 billion, down 12 percent from the first half of 2007, when it had profit of $4.669 billion.

Copper prices have fallen sharply in recent weeks from record highs as global markets anticipate a slowdown in demand that some analysts say could mark an end to an extended upcycle.

Mercurio said the PND report did not contemplate the most recent fall in copper prices.

Separately, Codelco said Wednesday in London that the premium for refined copper in Europe will be around $80 a tonne for 2009, compared to $115 per tonne this year.

The Chilean state-owned company also said copper production in 2008 will be 1.45 million tonnes while 2009 output will be close to the 2008 level, or possibly lower.

In early August, the company said it expected second-half copper output to rise 15 percent from the first half.

"We are working on that, we are not sure we are going to be there," Jose Pablo Arellano, chief executive at Codelco, told Reuters in an interview during LME week. (Reporting by Pav Jordan in Santiago and Julie Crust in London)