Oct. 28 (Bloomberg) -- Southern Copper Corp., which holds the world’s second-largest reserves of the metal, can “easily” double annual output to more than 1 million metric tons, Chief Executive Officer Oscar Gonzalez Rocha said.

Southern, which expects to produce 500,000 metric tons this year, plans to raise output 70 percent at its Peruvian mines by 2012, Gonzalez said. It may increase production further if parent company Grupo Mexico SAB regains control of U.S. producer Asarco LLC, he said.

“Southern can become the world’s biggest copper producer,” Gonzalez said yesterday in an interview in Lima. “We can easily reach more than 1 million tons of production from mines in Mexico, Peru and the U.S.”

Grupo Mexico lost control of Tucson, Arizona-based Asarco after putting it under bankruptcy protection in 2005 and is now battling Sterlite Industries (India) Ltd. A Texas court may rule on who should control the company in “days,” Gonzalez said.

Southern fell for a fourth day, dropping 5.5 percent to $31.48 in New York Stock Exchange trading. The stock has more that doubled in the past year.

Copper futures for December delivery closed 6.85 cents, or 2.3 percent, lower at $2.9305 a pound on the Comex division of the New York Mercantile Exchange. Copper, which doubled this year, touched a record $4.2605 a pound in May 2008.

New mine

Southern expects Peru’s government will approve studies for its $934 million Tia Maria copper mine before the end of the year, allowing construction to begin in the first quarter of 2010, Gonzalez said. The mine, which will produce 120,000 metric tons annually, will start operating in mid-2011, he said.

“Before construction can begin, we need approval of the environmental impact study,” Gonzalez said. “Hopefully the local community will support the project at the next public hearing.”

Southern also plans to add 100,000 metric tons of annual production at its Toquepala mine by 2012, as part of $2.1 billion of investments in Peru, the world’s third-largest copper producer after Chile and the U.S.

Southern is the biggest producer of the metal in Peru and Mexico. Chilean state company Codelco is the world’s top copper producer and holds the largest reserves.

To contact the reporters on this story: John Quigley in Lima at aemery1@bloomberg.net; Alex Emery in Lima at aemery1@bloomberg.net.

Last Updated: October 28, 2009 19:59 EDT