SANTIAGO The costs of large-scale copper mining in Chile kept rising due to lower production and rising service costs, a report from the state-run Chilean Copper Commission (Cochilco) said on Tuesday.

The report, which covers the first half of the year, said that the direct cost reached 198.8 cents per pound, a year-on-year increase of 39.6 cents.

"Lower production and the increase in the costs of third-party services, remunerations and prices of materials, electricity and TC-RC (treatment and refining) charges, explain the increase in costs in the first semester," the report said, adding that smaller operations were the most affected by the cost increase.

The report sampled 22 mining operations, which represent 93.5% of production. Out of those, 19 had cost increases. The smallest producer in the sample produced 102,800 metric tons of copper.

The report noted a few factors that counteracted cost increases like higher credits for the sale of molybdenum and gold, the decrease in the cost of sulfuric acid, freight and diesel.

Chile is home to state-owned Codelco, the world's largest copper producer, as well as other mining giants like BHP, Glencore, Anglo American and Antofagasta.

(Report by Fabián Andrés Cambero; Writing by Alexander Villegas; Editing by Rod Nickel)