| * Company boosting output while some global peers freeze expansion * Sandfire also beats production guidance, considers buying assets By James Regan SYDNEY, Oct 23 (Reuters) - Oz Minerals, Australia's third largest copper miner, on Friday said it would dig up to 20 percent more of the metal this year than previously touted as a weak local currency gives domestic producers an advantage over international rivals. A depreciating Aussie dollar has cushioned the impact on Australian miners of a sharp drop in U.S. dollar-denominated international copper prices, giving them a boost at a time when overseas peers are curbing production and freezing expansion work. "We've got a strong balance sheet, we've got cash and we produce in Australian dollars, which for us means the copper price is flat," said Andrew Cole, managing director of Oz Minerals, which trails Glencore and BHP Billiton in production volumes of Australian copper. "This gives us a competitive advantage sitting here looking out across the globe, with most other companies under pressure from over-leveraged balance sheets." Oz has enjoyed a record run of production, with the last three quarters the best in five years, surprising analysts on Friday with an up to 20-percent, or 21,000-tonne, increase in its 2015 guidance. Overall mining of copper in Australia is forecast to increase at an average rate of 7 percent a year to 1.3 million tonnes by 2020, said Gayathiri Bragatheswaran, a commodities analyst for Australia's Department of Industry and Science. Earlier this month, U.S.-based KKR & Co LP picked up 10 percent of Oz Minerals' shares at a 7-percent premium, saying it believed the miner was "undervalued", and marking a rare step by private equity into mining. "KKR's move probably said as much about the longer-term value of Australian copper mining in general as it did about Oz Minerals," said Gavin Wendt, an analyst with MineLife in Sydney. Another Australian copper miner Sandfire Resources said on Friday that it had beat September quarter production guidance as it targets annual produciton of 65,000-68,000 tonnes, and that it was aiming for even higher output next year by exploring more, and possibly via acquisitions. "We are in a position to take a good, hard look at opportunities," said Sandfire Managing Director Karl Simich. "In the last 12 months, we've looked at tens and tens, if not hundreds of different opportunities." International copper prices have bounced along in a $4,800-$5,400 range since late August, around their lowest in six years. (Reporting by Jim Regan; Editing by Joseph Radford)
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