Chile’s environmental court has put the final nail in the coffin for Barrick Gold’s (TSX: ABX; NYSE: GOLD) giant Pascua-Lama gold-silver project, straddling the Argentina border, which had been on hold since 2013 over environmental concerns.
The court dismissed late on Thursday a legal challenge from the company to a 2018 ruling. At the time, Chile’s Environmental Protection Agency (SMA) ordered the “total and definitive closure” of the project.
The tribunal’s president, Mauricio Ovideo, confirmed three of the five main charges against Barrick outlined in the environmental authority’s original ruling. The sentence concludes that the Canadian miner failed to properly monitor glaciers surrounding the project. It also says Barrick’s activities negatively affected the water quality of the nearby Estrecho river.
In addition, the judge ruled the gold giant used an unauthorized methodology for calculating water quality levels, which is less detailed and strict than the one required in Chile.
The court also imposed a US$9 million fine on the Canadian miner.
While Barrick said it would not appeal the court’s decision, the executive director for Chile and Argentina, Marcelo Álvarez, noted Pascua-Lama remained an important project.
Alvarez added that work was already underway to reevaluate the project’s potential. The review will include technical, economic and social aspects of Pascua-Lama.
“Barrick is a very different company since its merger with Randgold, and we now have a strong focus on establishing good relations with the communities and authorities,” Alvarez said in a statement.
The original mine plan for Pascua-Lama, which required a capital outlay in excess of US$8 billion, contemplated an open-pit operation that would have affected three small glaciers on the Chilean side of the Andes. It also involved major construction in the area and huge waste dumps.
In 2016, Barrick began a “drastic revision” of the project and agreed to pay $140 million to resolve a U.S. class-action lawsuit that accused the company of distorting facts relating to the controversial project.
Shortly after, the company abandoned the idea of an open pit at the site, opting to mine underground instead.
In April 2017, Barrick sold a 50% stake in its Veladero mine in Argentina to Shandong Gold in a transaction worth $960 million. As part of that deal, which made the two firms strategic partners, the Shandong province-based gold miner committed to helping Barrick move forward with Pascua Lama.
Later the same year, the company agreed to pay a further $20 million to a Chilean group to settle an arbitration case filed in 2016, after the gold producer halted payments settled in 2005.
Barrick chief executive Mark Bristow was hopeful about solving the issues surrounding the project. Shortly after assuming the post last year, he travelled to the South American country and met with mining minister Baldo Prokurica.
“Chile is an investor-friendly country, with a significant mineral endowment, and which encourages the development of mining projects,” Bristow said last year. “We believe there are exciting opportunities here.”
Previous studies show Pascua-Lama could generate 800,000-850,000 oz. gold and 35 million oz. silver per year in the first five years of its 25-year mine life.
— This article first appeared in MINING.com, which is part of Glacier Resource Innovation Group.
CECILIA JAMASMIE, MINING.COM SE
You of all people know full well there is a lot more going on in Chile with the Mina Pascua Chile side of the project.
It is becoming legally accepted in several cases in Chile as well as Canada that Barrick never had the proper titles to go forward with the project in the first place.
The rights had been taken from another by name of Jorge Lopehandia and his family.
All actions since about 1996.
The environmental problems were of Barrick’s own doing to buy time while the legal issues slowly grind away.
Barrick were hoping the investment world would forget!
What a great article. I have seen also a couple other articles that you have written on Barrick and Pascua Lama. You have been following this for awhile so I am just wondering if you are up todate on all that is going on with Barrick, Chile courts, Pascua Lama, Jorge and Mountainstar Gold. The BCSC halted Mountainstar Gold and they also banned Brent Johnson from ever running a public company or from being associated with a public company. Rocco Galati has now joined Mountainstar as legal and because of this his participation Mountainstar just won a Leave to Appeal. This happens maybe 5% of the time so the evidence submitted was overwelming. Just as a side note the proper and up todate titles were submitted in with Rocco’s 639 page appeal. The news release is on Sedar or I can send you a copy. So as it stands at this moment Barrick does not have title or right to the Pascua property in Chile Jorge does. The courts will be deciding more next week so this information is really fresh. If you are interested in doing a story and getting to the truth this can be arranged. Did you ever wonder why in 25 years Barrick has never mined Pascua Lama…. NO Title plain and simple. Thank you.