Copper output at Corporacion Nacional del Cobre de Chile, or Codelco, the world's largest copper-mining company, rose in the first half of the year to 783,000 metric tons from 675,000 tons in the first six months of 2008, Codelco Chief Executive Jose Pablo Arellano said Thursday.

Including output from its 49% stake in the El Abra mine, operated by 51% shareholder Freeport-McMoran Copper & Gold Inc. (FCX), total production in the first half reached 822,000 tons, up from 715,000 tons, Arellano said at a press conference.

Codelco's output increased from a year earlier due to production at its Gaby mine, which added 70,000 tons of output, as well as improved efficiency at all its operations, the CEO said.

The mining company also produced 10,000 tons of molybdenum in the first half, unchanged from a year earlier.

With copper averaging $1.83 a pound during the first half of the year, Codelco's pretax profit plummeted to $722 million from $4.11 billion in the first half of 2008, when copper averaged $3.68/lb. A sharp drop in molybdenum prices, which fell to an average $20.1 a kilogram in the second quarter from an average $72.60/kg in the same period a year earlier, also pulled pretax profit down.

If Codelco earnings were reported using the same tax requirements as private companies, it would have posted a net profit of $575 million, compared with $3.28 billion in the first half of 2008.

Company earnings go entirely to the public sector, including a controversial allocation to armed forces weapons procurement totaling 10% of sales.

As to the recovery seen recently in international copper prices, currently around $2.91 a pound, Arellano expects prices to remain volatile in the coming months driven by Chinese demand, but they should stabilize over the long term.

-By Julian Dowling, Dow Jones Newswires; 56-2-820-4241; julian.dowling@dowjones.com

(Risa Grais-Targow contributed to this report.)