As the ground shook and buildings swayed, conservative billionaire Sebastian Pinera took office as Chile's president on Thursday, tasked with rebuilding after a massive earthquake killed hundreds just 12 days ago.

A series of strong aftershocks rattled central Chile minutes before Pinera swore in at the Congress building in the coastal city of Valparaiso. Latin American presidents and other dignitaries looked nervously at the ceiling but the inauguration went ahead as planned.

Pinera said initial reports were of significant damage in the city of Rancagua 100 km (60 miles) south of the capital Santiago. Workers in the capital briefly evacuated swaying office towers and took refuge in the streets.

In Constitucion, which was heavily damaged in the 8.8-magnitude quake on Feb 27, residents scrambled for the hills on Thursday after the navy issued a tsunami alert and ordered people away from beaches.

The earthquake 12 days ago killed nearly 500 people and damaged infrastructure across much of south-central Chile, threatening Pinera's election pledges to boost economic growth to 6 percent a year and to create a million jobs.

It's time to get to work, Pinera said after taking office, adding that he had ordered his interior minister to personally oversee the recovery work of state emergency office Onemi, heavily criticized for its handling of the earthquake and an ensuing tsunami that devastated coastal villages.

Chileans hope that Pinera, a Harvard-trained economist, can use his business acumen to help one of Latin America's most stable economies rebound from the devastating earthquake.

The main challenge is to identify priorities to swiftly start the reconstruction effort. That will be the key variable that will be evaluated during his administration, said Alberto Ramos, senior economist with Goldman Sachs in New York.

This could be the Katrina of President Pinera ... in terms of how the population perceives the relief and reconstruction effort, he said, referring to the powerful hurricane that struck New Orleans in 2005. The slow relief effort damaged U.S. President George W. Bush's popularity.

While mines were mostly unscathed in the world's top copper producer, the February quake seriously damaged Chile's key wine, fish and paper pulp industries.

Some analysts see the damage shaving 0.5 to 2.0 percentage points off this year's economic growth, while others are holding to their original GDP forecasts of around 5 percent.

State-owned copper miner Codelco, the biggest copper miner in the world, said none of its mines were damaged in Thursday's aftershocks. One, a powerful magnitude 6.9 centered about 124 km (80 miles) south-west of the capital, was nearly as powerful as the quake that devastated Haiti in January.

Pinera, a 60-year-old former senator who made a fortune on a credit cards business and an airline, ranks No. 437 on Forbes' richest list, which estimates his fortune at $2.2 billion.

To fund reconstruction, the new leader is likely to issue international bonds and dip into the country's copper savings.

Survivors are praying that he gets it right.

He is a businessman ... and that is what we need right now. Someone who can create jobs for our kids, said Carlos Fuentes, a 47-year-old fisherman who lost his home and boat when giant waves rolled over the town of Curanipe after the quake twelve days ago.

FRAYED NERVES

The continued rumbling has frayed nerves, particularly in hard hit Constitucion, where the new president was planning to visit later in the day.

Now I'm nervous! said Delfina Fuentes, 60, on a nearby hilltop on Thursday after abandoning her home, which was damaged by the February quake.

Following the tsunami alert, the historic downtown of Constitucion was deserted aside from troops and police who patrolled the streets.

The handover of power from popular center-leftist Michelle Bachelet was celebrated with an austere midday ceremony, toned down out of respect for the dead.

Pinera joins a small group of conservative leaders in Latin America, where most presidents are leftists or center-leftists. He is the first conservative leader in Chile after two decades of center-left rule that has consolidated the country's status as the most developed country in Latin America.

Bachelet, a pediatrician-turned-politician, left office with a record high 84 percent approval rating even after criticism of delays in government aid for victims.

Her government was also slammed for a faulty tsunami warning system, botched death toll estimates and hesitating to send in troops to quell violent looting. Pinera has promised a total overhaul of the country's emergency response office.

(With reporting by Alonso Soto in Curanipe, Fabian Cambero in Valparaiso and Rodrigo Martinez and Simon Gardner in Santiago; Writing by Brian Rhoads; Editing by Fiona Ortiz and kieran Murray)

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