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UPDATE 1-Chile's copper production to rise 13.9 pct by 2028- commission

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(Recasts with quote from Cochilco report, additional statistics and context on Chile copper industry)

By Dave Sherwood

SANTIAGO, Dec 28 (Reuters) - Chile's copper production will rise 13.9 percent by 2028 from 2016 levels as new projects and mine expansions counter falling ore grades in the world's top copper producer, state copper commission Cochilco said on Thursday.

If the new projects come on line as expected, the commission estimates total production of copper in Chile will reach 6.32 million tons by 2028.

It added though that without the new investment, copper output could drop by as much as 31.5 percent.

"The situation is a reminder that the national mining industry must confront current challenges and push forward with new projects," the commission said in a report.

Several major projects are planned for the coming years.

State-run miner and world top copper producer Codelco, which produced 1.7 million tonnes of copper in 2016, has a five-year investment plan that includes construction of a new level at its century-old El Teniente mine and expansion at Radomiro Tomic. And miner BHP <BHP BLT.L> said in August it would spend $2.46 billion to extend the life of the Spence copper mine in northern Chile by more than 50 years, bringing new output online from 2021. Copper accounts for over half of export earnings and as much as 15 percent of gross domestic product in Chile. Prices of the metal surged to a four-year high on Thursday. (Reporting by Dave Sherwood; Editing by Bernadette Baum and Susan Thomas)

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