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SANTIAGO, April 13 (Reuters) - State copper commission Cochilco forecast on Thursday that Chile would produce slightly less than 5.6 million tonnes of copper in 2017, down from a previous forecast of 5.79 million, due largely to a strike at BHP Billiton's Escondida mine.
The walkoff at Escondida, where workers downed tools for 43 days in the first quarter, chopped 180,000 tonnes off the commission's previous estimate in January, Cochilco said in its quarterly report.
Cochilco's estimate for 2017 production represents a 0.8 percent increase over 2016.
"An important part of that increase can be attributed to the low base of comparison of 2016 when Chilean production registered a decrease of 3.8 percent," Cochilco executive vice-president Sergio Hernandez said in a statement.
The commission estimated copper prices would average $2.60 in 2017, up from a previous forecast of $2.40, due to tighter supply. In particular, the body cited stoppages at Escondida, the world's largest copper mine, as well as at Freeport-McMoran Inc's Grasberg mine in Indonesia and Cerro Verde mine in Peru.
For 2018, Cochilco estimated that global copper prices would level out at $2.60 per pound.
"This combination of disruptions generated expectations that during 2017, the refined copper market would present a deficit, bringing about an upward turn in the price," Chile's mining minister Aurora Williams said in a statement.
Worldwide copper production would likely grow 0.7 percent, down from Cochilco's previous forecast of 2.9 percent, she said. (Reporting by Felipe Iturrieta; Writing by Gram Slattery; Editing by Chizu Nomiyama)