(Adds detail on fine, project)
SANTIAGO, March 18 (Reuters) - The Japanese-owned Caserones copper mine in northern Chile has been fined $11.9 million for breaching environmental rules, Chile's environmental regulator said on Wednesday.
The fine was for a number of infractions, including failure to implement mitigation measures to prevent the contamination of underground water supplies and the construction of unauthorized transmission lines, said the SMA regulator.
The regulator said it was the second-highest fine it had imposed since it was set up in 2012. The mine, which began commercial operations last year, violated rules 17 times, eight of which were serious, it said.
"Our country needs initiatives and investments to grow and develop, but they must be very rigorous in complying with environmental obligations," said the regulator head, Cristian Franz, in a statement.
Top copper exporter Chile is battling to maintain its reputation as a place that is friendly for investors, while balancing increasing demands from local communities to safeguard the environment.
Caserones is 75 percent-owned by Japan's top copper smelter, Pan Pacific Copper, a business controlled by JX Nippon Mining . Japanese trading house Mitsui & Co Ltd holds the remainder.
The project was formerly run by Nelson Pizarro, now chief executive of state-run Codelco, the world's biggest copper producer.
Caserones could not immediately be reached for comment. (Reporting by Rosalba O'Brien and Fabian Cambero; Editing by Steve Orlofsky)