Chilean copper output grew 7.8% in August to 459,823 metric tons from the 426,689 tons produced in the same month of 2008, the government statistics agency reported Wednesday.

January-August output, however, dropped 2.3% to 3,475,933 tons from 3,558,743 tons during the first eight months of last year. In 2008, Chile produced 5,364,159 tons, a 4.2% drop from the previous year.

The INE, as the statistics institute is known, said mining companies with more than 400 workers post a 10.1% increase in copper output and cited BHP Billiton Ltd.'s (BHP) Escondida mine and Xtrata PLC (XTA.LN) and Anglo American PLC (AAUK) joint-venture Collahuasi mine as well as state copper giant Corporacion Nacional del Cobre, or Codelco, as contributing to the output increase.

Production of copper contained in concentrates in August was 196,888 tons, up 1.5% from concentrate output in August 2008, the INE said.

Copper cathode production, meanwhile, rose 7.8% on the year to 234,796 tons, the INE said. Copper cathodes have a higher added value than concentrates, as the latter must be smelted or refined to get a purer form of the metal. The country also produces other forms of copper, such as blister, but in very small amounts.

Chile is the world's largest copper producer, accounting for some 35% of global output. It also is one of the leading molybdenum, iodine, lithium, gold and silver producers. The mining industry represents about 17% of the country's gross domestic product, according to state copper commission Cochilco's most recent data.

The country's molybdenum output in August totaled 3,164 tons, a 27% increase from the 2,495 tons it produced in August 2008. January-August production grew 2.5% to 22,710 tons from 12,155 tons in the first eight months of 2008.

The INE reported that gold production climbed 15.6% on the year to 3,387 kilograms, and silver production increased 8.4% to 109,566 kilograms. Both precious metals are often found as byproducts at many Chilean copper mining operations.

INE's July metallic mining index surged 8.3% on the year, while its nonmetallic mining index inched up 0.7%.

INE Web site: http://www.ine.cl

-By Carolina Pica, Dow Jones Newswires; 56-2-820-4244; carolina.pica@dowjones.com