Shougang looks to double Peru iron output in 2010

LIMA, March 28 (Reuters) - Shougang Hierro Peru (SHP.LM), a Chinese-owned iron miner, said on Friday it will invest this year in an expansion project to double annual iron production to 16 million tonnes, starting in 2010.

Raul Vera, the company's general director, declined to say how much the project will cost, but Peru's mining minister has said it is around $700 million.

"The plan is to double production, in the first stage to some 16 million tonnes of iron a year," Vera told Reuters by phone.

Right now, it produces about 8 million tonnes a year.

"In the second stage ... we will increase production to 20 million tonnes of iron per year," said Vera.

Shougang Hierro Peru is a subsidiary of the Chinese Shougang Group and is the largest iron producer in Peru.

The mine, which produces some 20,000 tonnes of mineral a day, sends most of its output to China, a major minerals consumer. (Reporting by Marco Aquino; Writing by Dana Ford; Editing by Christian Wiessner)