Chilean court suspends Barrick mine due to environmental irregularities

SANTIAGO, Chile – 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 gold miner with “environmental irregularities” during construction of the world’s highest-altitude gold and silver mine.

Interior Minister Andres Chadwick welcomed the mine’s suspension and said he hopes the world’s top gold mining company can now fix problems at Pascua-Lama.

“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 (TSX:ABX) said Wednesday it was still awaiting formal notification of the injunction halting construction on the Chilean side of the Pascua-Lama mining project and would assess the potential implications when it came.

However, it said construction activities in Argentina, where the majority of the project’s critical infrastructure is located, including the process plant and tailings storage facility, are not affected.

Meanwhile, the start date for the mine straddling the Andean border with Argentina has already been delayed by more than six months to the second half of 2014. Cost overruns have seen the price tag rise from $3 billion to more than $8 billion.

The injunction stems from a constitutional rights protection petition filed with the court on Oct. 22 by a representative of a Diaguita indigenous community and other individuals against Barrick’s Chilean subsidiary and the regional Environmental Evaluation Commission.

That move followed a similar petition filed in late September by representatives of four Diaguita indigenous communities against the Barrick subsidiary, Compania Minera Nevada, with the EEC.

The plaintiffs allege non-compliance with aspects of the project’s environmental approval in Chile that have resulted in negative impacts on water sources and contamination, or at least the risk of contamination, of the Estrecho and Huasco rivers, according to information supplied by Barrick.

– With files from The Canadian Press