* Chile seen producing 5.596 mln tons of copper this year * Chuqui mine, launch of Ministro Hales mine to lift output * Copper prices seen at $3.57/lb this year, dropping in 2014 * Supply growth outlook weighs on price rise on Monday * Cochilco sees global copper demand up 1.5 pct in 2013 SANTIAGO, Jan 28 (Reuters) - Chile is seen producing 5.596 million tonnes of copper this year, up 3 percent from 2012 levels, as heavy investment in mines in the world's No. 1 producer pays off, the country's state copper commission, Cochilco, said on Monday. Cochilco said a pick-up at state copper producer Codelco's century-old Chuquicamata deposit and the launch of its Ministro Hales mine at the end of the year will help lift output of the metal, which is used in construction and power generation and transmission. But analysts have warned that several factors - deteriorating ore grades, delays to key energy and mining projects, and operational woes - threaten forecast production jumps. Cochilco expects output in Chile, which mines roughly a third of the world's copper, will rise to 5.754 million tonnes in 2014 from an estimated at 5.433 million tonnes last year, which was an 3.2 percent increase from the year before. "This is fairly positive news because international estimates said Chile couldn't reach predicted output and Chile's production rose 3.2 percent," Mining Minister Hernan de Solminihac said. Cochilco had estimated 2012 copper output at 5.45 million tonnes in November, and de Solminihac had said in April that production would reach a whopping 5.7 million tonnes. Many analysts at the time had called his forecast too ambitious. If Chile meets its production forecast, the higher copper supply could "slightly weigh on prices," said George Gero, precious metals strategist at RBC Capital Markets Global Futures. Copper edged higher on Monday after better-than-expected U.S. economic data, but uneasiness about the growth of supply kept prices in check. The Andean country will attract $100 billion in mining investment in the next 10 to 12 years, a slightly longer time frame than previously forecast, as regulatory uncertainty and energy woes loom as key risks, the Sonami mining association said earlier this month. Industry experts say Chile is failing to take a firm hand in regulating its mining and energy industries, leaving billions of dollars worth of projects exposed to the risk of lawsuits by local communities. EXPANSION OF TIRED MINES The forecast for climbing output from Chile comes as some global miners are scaling back investment plans as operating costs soar and the world's economic outlook remains volatile. But many miners in the Andean country have major plans to revamp aging mines. World No. 1 copper miner Codelco has an ambitious investment plan worth roughly $27 billion to maintain and ultimately lift production at its copper mines to more than 2 million tonnes. In addition, BHP Billiton and Rio Tinto have approved plans for a $4.5 billion expansion of Escondida, already the world's biggest copper mine. The world's third-biggest copper mine, Collahuasi, hopes to have a good year and turn the corner to produce more than it did in 2012, its CEO told Reuters on Friday. Anglo American's major growth project, Los Bronces, helped increase the company's copper production in 2012, a relative bright spot for the global miner. COCHILCO MARKET VIEW Cochilco sees copper prices averaging $3.57 per pound this year, unchanged from its previous estimate, before dropping to around $3.32 per pound in 2014. Globally, it sees copper output growing 3.3 percent this year, outpacing demand growth, which is seen up 1.5 percent. It expects a 56,000 tonne copper surplus in the market in 2013.