April 7, 2015 / 1:55 PM / 5 years ago

UPDATE 1-Chile cuts copper production forecast for 2015

(Adds details on production, context, price forecast)

SANTIAGO, April 7 (Reuters) - World No. 1 copper exporter Chile is expected to produce 5.94 million tonnes of the metal in 2015, state copper commission Cochilco said on Tuesday, slightly lowering its forecast.

Cochilco estimated in January that output would be around 6.0 million tonnes, up from 5.78 million last year.

The cut in the forecast was mostly due to a lower estimate from projects run by Anglo American PLC and at the Zaldivar mine, which is operated by Barrick Gold Corp, Cochilco said.

Anglo said last month that an ongoing drought in Chile had affected its operating performance late last year and could have an impact at its Los Bronces mine in central Chile this year.

Extreme weather conditions in the north of the country earlier this month have also taken a toll, Cochilco said.

“There is an effect, albeit of low significance, from operations temporarily halted (mostly Codelco’s Salvador and JX Nippon’s Caserones) due to the heavy rains,” the commission said in a statement.

Chile, which produces around a third of the world’s copper, is facing dwindling ore grades at many of its aging deposits, although new mines such as Codelco’s Ministro Hales are helping to boost output.

Concerns over slowing demand in key buyer China have pulled the copper price to more than five-year lows, however, cutting into both company profits and Chile’s main source of income.

The copper price is seen averaging $2.85 a pound this year, Cochilco said, maintaining its previous forecast. It sees the price dropping to $2.80 next year. (Reporting by Fabian Cambero, Writing by Rosalba O’Brien; Editing by Chizu Nomiyama; and Peter Galloway)

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