Barrick reviewing sanctions on Chile Pascua-Lama project
Barrick Gold Corp. is analyzing revised sanctions on its PascuaLama project on the Chile-Argentine border after Chile’s environmental agency reduced a fine but imposed new conditions, including the definitive closure of the original project site.
Construction of the open-pit mine was halted by a Chilean court in April 2013. A month later, Chile’s environmental agency, known as SMA, fined the company and ordered it to take steps to safeguard water supplies. The fine was the maximum the SMA could hand down and Barrick was able to cut it to about US$16 million by paying within five days. Activists protested, calling for a higher penalty, and SMA was told to recalculate the fine.
The SMA will reduce that fine to US$11.5 million and ordered additional environmental monitoring. Pascua-Lama had been operating under a temporary closure plan in Chile.
“Given the nature and the size of the breaches that the company committed, there is the conviction that total and definitive closure, plus an economic fine, is the most proportional sanction in this case,” SMA head Cristian Franz said in a statement.
The original plan for PascuaLama, dating from the early 2000s, would have had an effect on three small glaciers in Chile and involved significant construction on the Chilean side of the border and large waste dumps.
Barrick has since abandoned plans for an open pit at the site, saying it hopes to mine underground instead. Its pre-feasibility study isn’t finished but the expectation is that there will be less waste material to manage and much of the infrastructure previously planned for the Chilean side won’t be needed.
“Based on a preliminary review of the resolution, the SMA has not revoked Pascua-Lama’s environmental permit (RCA) but has ordered the closure of existing facilities on the Chilean side of the project, in addition to certain monitoring activities,” Torontobased Barrick said a statement.
“The company will complete a detailed analysis of these requirements and will provide further details in due course.”
It is not clear if the facilities the SMA is demanding be closed would be needed if a new underground mine plan is adopted.
“The closure of existing surface facilities in Chile is consistent with the company’s plan to advance a pre-feasibility study for an underground mining operation at Pascua-Lama, which would address a number of community concerns by reducing the overall environmental impact of the project,” the company said.
Chile’s environmental authority analyzed 33 charges and issued total closure sanctions for five breaches, which include the company’s operations impacting on protected flora and fauna, incomplete monitoring of glaciers and spilling acid solution into a river.
Barrick has said it hopes to mine the area for over a century. Last year, it sold 50 per cent of its Veladero mine in Argentina to Shandong Gold Mining Co. That partnership includes plans to jointly develop Pascua-Lama and other projects in the El Indio belt. Barrick executive chairman John Thornton has said investment in various technologies, including cyanide-free leaching, may speed development of the region.