Southern Copper CEO sees copper at $4/lb in 2011

* China demand not to fluctuate, CEO says * Approval of Tia Maria project expected by July * Recommendations on Asarco merger expected by mid year (Adds quotes, Asarco merger comments

Feb 17 (Reuters) - Southern Copper (SCCO.N) CEO Oscar Gonzalez said on Thursday he expects the price per pound of copper will hover around $4 in 2011, slightly off the record high prices it tracked early in the year.

Gonzalez said he did not foresee a sharp fluctuation in Chinese demand for the metal despite higher interest rates in the world's second largest economy.

"We believe copper prices will remain high this year (2011) and for 2012 we see a range of between $3 and $4 per pound," he told journalists.

Southern Copper is a subsidiary of Mexican miner Grupo Mexico(GMEXICOB.MX). Peru is the world's second largest copper producer after neighboring Chile.

Gonzalez also said he expects an environmental impact study of its key project, Tia Maria, to be approved before President Alan Garcia leaves office in July.

Peruvians in the southern region of Arequipa have opposed the $1 billion Tia Maria project over worries about water supplies. Tia Maria will produce 120,000 tonnes of copper concentrates per year, according to Southern Copper.

ASARCO MERGER

Southern Copper expects by mid year to have a recommendation from an independent committee evaluating Grupo Mexico's proposal to merge its operations with U.S. copper miner Asarco, Gonzalez said.

Grupo Mexico, which won control of Asarco in 2009 after a drawn out court battle, proposed the merger with Southern Copper in July to reduce costs and consolidate operations.

The committee has already visited operations in Peru, Gonzalez said.

"We hope to have a response by mid year because they started in September," he said. "They have to make recommendations to Southern Copper and to Grupo Mexico that give valuations for the stock swap that would have to take place."

(Source: http://www.reuters.com/article/2011/02/17/peru-metals-southerncopper-idUSN1712731420110217)