* KGHM plans dividends at up to one third of profits
* Plans to raise copper output by more than 1 mln tonnes
* Sees its EBITDA 70 pct up by 2020 (Adds details, background)
WARSAW, Jan 26 (Reuters) - Europe's No.2 copper producer KGHM plans to pay out dividends of up to one third of its 2014 annual profit, as it plans to spend 27 billion zlotys ($7.23 billion) to boost output over the next five years, the company said on Monday.
The dividend policy of the state-controlled miner is in line with what it signalled last year. KGHM paid out a dividend of 5 zlotys per share which equalled 30 percent of its 2013 profits.
In its strategy for 2015-2020 published separately, KGHM said it planned to increase its annual copper output to more than 1 million tonnes by 2020 from 567,500 tonnes targeted for 2014.
KGHM should receive a production boost from its key foreign asset, the Sierra Gorda mine in Chile, which it co-owns with Japan's Sumitomo.
The mine, which started production late last year, is expected to produce 120,000 tonnes of copper and 50 million pounds of molybdenum this year.
KGHM expects the average copper price to be $7,600 a tonne in 2015-2020. It expects $6,800 in 2015, unchanged from last year.
The company, which is also the world's largest silver producer, expects the average silver price to be $21 per ounce in 2015-2020, and forecasts $18 per ounce for 2015.
It also sees EBITDA, or earnings before interest, tax, depreciation and amortisation, rising 70 percent by 2020 from 2014.
$1 = 3.7341 zlotys Reporting by Agnieszka Barteczko; editing by Susan Thomas