Gold Fields (NYSE: GFI; JSE: GFI) may see its US$1 billion Salares Norte mine in northern Chile affected again after the country’s environmental watchdog (SMA) said there was no certainty the miner had captured and relocated a population of 25 critically endangered chinchillas living in the area as asked.
The regulator’s latest order, issued late on Wednesday, forces Gold Fields to stop activities around the mine plant area. The miner has 10 days to prove of the absence of chinchillas in the rocky area or may face sanctions.
Chilean authorities stopped the initial rescue operation, launched in 2020, after two of the first four rodents being relocated died shortly after. SMA laid charges against the South African gold producer and asked it to made adjustments to the original plan to guarantee the survival of the remaining short-tailed chinchillas.
The regulator approved the new strategy late last year, and “Operation Chinchilla” resumed in February. Since then, however, Gold Fields has been unable to locate any.
In an operational update earlier this month, the company said the rodents appeared to have left on their own, without any human intervention.
“We have been working with the authorities on the capture and relocation of the chinchillas, and we have gone through the sequencing. And to date we have not captured any,” CEO Mike Fraser said during the presentation.
“It is quite conceivable that the chinchillas moved on. That’s a plausible scenario,” he added.
Hunted for centuries for their thick, soft pelt, chinchillas are now only found in the wild and are protected by law. Former CEO Nick Holland acknowledged in 2017 the tiny animals were among the main obstacles for bringing Salares Norte into production.
The relocation of these critters is a key component of Salares Norte’s environmental licence.
US$8B in gold at stake
According to Gold Fields’ latest estimations, the Salares Norte mine’s reserves are at 3.4 million oz. of gold and almost 42 million oz. of silver.
At current gold prices of around US$2,380 per oz., the asset is worth roughly US$8 billion.
The mine, which cost Gold Fields over US$1 billion to build, produced its first gold in late March, as planned. Getting to this point has not been easy as on top of dealing with the relocation of chinchillas, construction of the mine was hit by rising costs and the global pandemic.
Felipe Sanchez, head of SMA’s regional office told MINING.COM that the Salares Norte mine, Gold Fields’ newest operation, was constantly being monitored due to its environmental impact on the fauna of the Atacama Region’s mountain range, where the project is located.
“This project has a sanctioning procedure that began in December 2021, in which Gold Fields was accused of deficient implementation of rescue measures for the rodents present in rocky areas of the mining licence,” Sanchez said.
Chinchilla around Salares Norte gold mine. Credit: SMA
The SMA official noted that while the miner was allowed to resume activities in the area to complete the mine on time, the issue of moving the rodents is pending.
Salares Norte, located 4,500 metres above sea level in an area where winter temperatures can be as low as -20C, is key to the company’s goal of churning out 2.8 million oz. of gold by 2025.
Production at the mine is expected to reach about 250,000 oz. of gold this year, ramping up to full-year production of 580,000 oz. next year.
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