|Chile court suspends Barrick's Pascua Lama mine|
by LUIS ANDRES HENAO, Associated Press
April 10th, 2013
A Chilean court on Wednesday suspended Barrick Gold Corp's Pascua Lama mine after indigenous communities complained that the project is threatening their water supply and polluting glaciers.
The appeals court in the northern city of Copiapo charged the Toronto-based mining company with "environmental irregularities" during construction of the world's highest-altitude gold and silver mine.
Chile is the world's top copper producer and its stable economy largely relies on the export of minerals. Mining also offers many of the country's poor their best shot at a middle-class life, especially in the rugged desert areas of the north, where most of the mines are located.
But several mining and energy projects in power-strapped Chile have been delayed amid mass protests demanding more regulation of the Andean country's natural resources.
Interior Minister Andres Chadwick welcomed the mine's suspension, which follows a fine imposed on Barrick by Chile's Environmental Evaluation Service for failing to monitor glaciers at Pascua Lama. Chadwick said he hopes the world's top gold mining company can now fix problems at the mine.
"We're not surprised at all and we think it is good that through a legal organism, construction work is suspended while Pascua effectively attends to the charges already made by the environmental regulator," Chadwick told local Radio Cooperativa.
Barrick officials told The Associated Press "construction activities are not affected in Argentina," but the company cannot respond to the ruling yet because it had not been notified by the court.
Lorenzo Soto, a lawyer representing the Diaguitas indigenous community said the suspension will remain in effect until the company addresses the problems and consults with the local indigenous group.
"If the mining company wants to continue its project it will have to meet the current legal standards," Lorenzo told CNN Chile. "Among those is the decision of consulting the community. It's clear that this project never consulted with the indigenous people."
Barrick says Pascua Lima has 17.9 million ounces of gold reserves, and the company believes it will be one of the world's biggest and lowest-cost mines. But the mine straddling the Andean border with Argentina has gone off track. Its start date has been delayed by more than six months to the second half of 2014. Cost overruns rose from an original $3 billion to more than $8 billion last year.
Barrick's shares plunged $1.69, or 6.3 percent, to $25 in afternoon trading. The stock was already around four-year lows. It dropped as low as $24.80 Wednesday, the lowest price since December 2008.
The company had 140 million ounces in proven gold reserves at the end of 2012, as well as 1.05 billion ounces of silver and 13.9 billion pounds of copper. It expects to produce 7 million to 7.4 million ounces of gold this year.
Barrick has three other mines in South America: two in north central Peru and one in Argentina. Those mines produced more than 1.6 million ounces of gold last year, and they are expected to yield about 1.3 million ounces in 2013.
The company also has 10 active mines in North America and nine in the Australia-Pacific region, some of which are operated through joint ventures. Its African operations are run by African Barrick Gold PLC, a separate company in which Barrick Gold owns a 74-percent stake.