(Reuters) - BHP Group Ltd cut its annual copper production outlook on Thursday as operations at its Escondida project in Chile were impacted by labour shortages due to rising COVID-19 cases, while road blockades associated with social unrest in the country blocked access to the mine.

Chile, the world's top copper producer, earlier this month sued BHP, among other miners, over alleged environmental damages caused by its operations in the Atacama salt flats.

The road blockades, threats of work stoppage over alleged worker contract breaches, and surging COVID-19 infections at Escondida affected production at the project, which houses the world's largest copper deposit.

"Our Chilean assets experienced a challenging operating environment in the March 2022 quarter due to a reduction in our operational workforce as a result of a significant increase in COVID-19 cases in Chile," the miner said in its third-quarter production report.

Copper production from Escondida is now expected between 1,000 thousand tonnes (kt) and 1,030 kt for 2022, down from its previous range of 1,020 kt to 1,080 kt, resulting in a slight downgrade to total copper output forecast to between 1,570 kt and 1,620 kt.

The miner has logged 1,112 kt of copper output so far this financial year, down 10% from last year. Its third-quarter iron ore output from Western Australia came in flat from a year ago, and missed consensus estimates.

(This story corrects headline and paragraph 1 to say the forecast cut was due to rising COVID-19 cases and road blockades in Chile. Removes reference to Chile protests, environmental concerns)

(Reporting by Sameer Manekar in Bengaluru; Editing by Sherry Jacob-Phillips)