By Matt Craze and Nathan Gill

Sept. 1 (Bloomberg) — Antofagasta Plc, the copper producer controlled by Chile’s Luksic family, expects copper demand to increase this month, a company executive said.

Demand should recover in September as industrial production in China expands and summer vacations in the northern hemisphere end, Marcelo Awad, chief executive officer of the company’s mining arm, said today in an interview in Santiago.

Manufacturing in China, the world’s biggest user of metals, increased at the fastest pace in 16 months in August, two surveys showed. The metal tumbled yesterday as equities dropped in Shanghai, raising concern that China’s economic recovery may stall. Copper prices doubled this year as Chinese imports soared and on signs that the worst of the global recession is past.

Antofagasta’s production will increase to 540,000 metric tons in 2010 from 450,000 tons because of an expansion at its Los Pelambres mine, Awad said. Production will increase to between 700,000 and 750,000 tons in 2011 as Los Pelambres produces at full capacity, he said.

Copper for December delivery gained 4 cents, or 1.4 percent, to $2.8665 a pound at 10:59 a.m. on the New York Mercantile Exchange’s Comex division, paring a climb of as much as 2.8 percent. The price fell 4.2 percent yesterday, the steepest decline for a most-active contract since June 22.