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Environment watchdog orders Barrick to close Chilean side of giant Pascua-Lama project

Environment watchdog orders Barrick to close Chilean side of giant Pascua-Lama project

Photo by Reuters

19th January 2018

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – Chile's superintendent of the environment has ordered mining major Barrick Gold to close the Chilean side of the massive, but stalled Pascua-Lama gold/silver project straddling the border between Argentina and Chile.

The Superintendencia del Medio Ambiente (SMA) announced a revised sanction on the Pascua-Lama project in a statement on Thursday, as part of a re-evaluation process ordered by the country's Environmental Court in 2014 relating to historical compliance matters at the project.

The revised sanction includes a 25% reduction of the original administrative fine imposed by the SMA in 2013, from about $16-million to $11.5-million.

An environmental court ordered the SMA to reconsider its $16-million fine on technical grounds. At the time, the regulator threatened to consider a range of sanctions – from a warning to permit cancellation, or a fine.

The $8.5-billion project ground to a halt in 2013 in the face of mounting evidence of environmental issues, political opposition, labour unrest and swelling costs.

Based on a preliminary review of the resolution, Barrick said the SMA has not revoked Pascua-Lama's environmental permit, but has ordered the closure of existing facilities on the Chilean side of the project, in addition to the implementation of certain monitoring activities. It is currently operating under a temporary closure plan on the Chilean side of the project.

The SMA cited 33 charges, six of them for very serious infractions, fourteen for serious infractions and nine for minor infractions; while four charges were acquitted because of a lack of data. The charges relate to acid water discharges, destruction of flora, incomplete monitoring of both environmental and social variables and environmental damage in areas and glaciers of the Andean highlands.

According to Barrick, the closure of existing surface facilities in Chile is consistent with the company's plan to advance a prefeasibility study (PFS) for an underground mining operation on the Argentina side of Pascua-Lama, which would address a number of community concerns by reducing the overall environmental impact of the project.

The company is currently undertaking a number of optimisation studies in order to complete the PFS.

Barrick has, to date, sunk more than $4.8-billion into the project, which was slated to produce 800 000 oz/y to 850 000 oz/y of gold in its first five years of full capacity. In 2016, Chile rejected an attempt by local communities to block modifications needed to keep the project on track.

Barrick's TSX-listed equity closed the day 2.53% lower at C$17.71 apiece.

Edited by Creamer Media Reporter

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