* Aurubis eyes growing primary production outside Europe
* Could pay up to around 777 million euros for acquisitions
* CEO says sees current downturn in copper prices as blip
* Shares rise as much as 3.1 percent, outperforming midcaps
(Adds CEO comments on Salzgitter, outlook for copper industry)
By Marilyn Gerlach
FRANKFURT, June 23 (Reuters) - Aurubis, Europe's biggest copper smelter, is looking at acquisition opportunities in Asia and South America to boost its primary copper production business, Chief Executive Bernd Drouven told Reuters Television.
"If we look at the copper primary production, I think we have established already a sound basis in Europe. Therefore we would look at outside Europe," he said in an interview on Tuesday.
The company has the financial flexibility to pay up to 777 million euros ($1.1 billion) for any purchases, he said.
"In total that is an upper range. I think that is doable."
That is as much as it spent on its last major acquisition, when it bought Belgian copper group Cumerio last year as part of its goal of becoming a globally integrated copper producer.
Since then, Aurubis has been able to pay down a large portion of the debt it piled up for the acquisition as it continues to generate cash, Drouven said.
Shares of Aurubis were up 1.8 percent at 19.57 euros at 1454 GMT, having touched 19.87 euros earlier. The German midcap index was unchanged.
In Europe, Aurubis still has opportunities to grow in copper products, Drouven said, while declining to be more specific.
TEMPORARY BLIP
While Drouven has an eye turned toward consolidation, he said he did not believe Salzgitter, which now holds a 23 percent stake in Aurubis, intended to take over his company completely as such a combination would not yield any synergies.
Salzgitter is Germany's second-largest steelmaker and it has said it aims to boost its stake in Aurubis if the share price is favourable.
Copper smelters have been hit with volatile prices after the market came off a temporary surge in demand from China.
Prices of copper, used in the power and construction industries, rose more than 70 percent to an eight-month high of $5,388 a tonne earlier this month, helped by Chinese stockpiling and improving economic data, but have since retreated.
Drouven said he saw the current downturn in copper prices as a temporary blip rather than a dramatic development, saying copper prices were typically sluggish in summer but would rebound later in the year before tapering off by year-end.
Demand for copper wire rods had already picked up since April. In the copper strip products business, which was hit by a collapse in demand from the automotive sector, demand would pick up by September, as well, Drouven said.
In the medium term, economic stimulus programmes around the world would help boost prices again. ($1=.7216 Euro) (Reporting by Marilyn Gerlach, editing by Will Waterman)