UPDATE 1-Mexico silver output up 18.6 pct in May
* May silver output 420,629 kg
* May copper output up 4.2 pct to 35,911 tonnes (Recasts, adds analyst comments and background)
July 31 (Reuters) - Mexican silver output jumped 18.6 percent in May from a year earlier to 420,629 kg, the National Statistics Institute said on Tuesday, as strong prices continued to spur production.
Mexican copper output rose by 4.2 percent to 35,911 tonnes in May as production increased at the massive Buenavista mine -- formerly known as Cananea -- following a three-year strike that ended in 2010, the institute said.
Fresnillo, Mexico and the world's largest primary silver producer, expects to meet its 2012 silver targets thanks to a ramp-up of production at its new Saucito mine.
The precious metals miner reported a 9 percent decline in first-half profit on Tuesday.
Fresnillo has seen a decline in silver production over the previous year, suggesting that other Mexican mining companies were amping up their own production, said RBC analyst Evgenii Risovich.
"Most of the (silver) mines now operate profitably, so it makes sense that production is growing because there is money to be made," Risovich said.
Copper output will likely continue to increase over the next few months but only moderately, thanks to production running at full capacity at Grupo Mexico's Buenavista mine, said Julio Zetina of Vector Casa de Bolsa.
"The jumps will be slight, but toward 2013 we might see higher capacities at other mines," Zetina said.
Grupo Mexico said it hopes copper production at Buenavista will reach 488,000 tonnes by 2015. A breakdown of metals production follows: Product May 2012 Pct Chge
vs yr ago
Gold 7,746 kgs +3.5
Silver 420,629 kgs +18.6
Lead 16,447 tonnes -8.6
Copper 35,911 tonnes +4.2
Zinc 39,872 tonnes +7.1
(Reporting By David Alire Garcia and Gabriel Stargardter; Editing by Maureen Bavdek and John Wallace)
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