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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 in 17 items, 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 77.37 percent-owned by Japan's top copper smelter, Pan Pacific Copper, a business controlled by JX Nippon Mining & Metals under JX Holdings Inc. Japanese trading house Mitsui & Co Ltd holds the remainder.
"We have responded to all directives given by the regulator in 2013 and we have implemented all measures and constructed all facilities to comply with rules," said Masayoshi Yamamoto, public relations manager at JX Nippon Mining & Metals in Tokyo.
"We believe this action by the regulator will not affect our mining license or operation of Caserones mine," he said, adding that the fine was partially factored into its profit forecast for this business year that ends on March 31.
JX Nippon Mining said last month that Caserones produced 19,000 tonnes of copper concentrate in 2014, far below its earlier target of 70,000 tonnes, due to a delay in setting up an automatic operation program and building tailing dam.
The company now aims to boost output to 150,000 tonnes a year of copper concentrate from around August this year, Yamamoto said.
The Caserones project was formerly run by Nelson Pizarro, now chief executive of state-run Codelco, the world's biggest copper producer.
Reporting by Rosalba O'Brien and Fabian Cambero in SANTIAGO, Yuka Obayashi in TOKYO; Editing by Steve Orlofsky and Michael Perry