Published On: Fri, May 31st, 2013

Barrick Gold Criticized by President of Chile

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/ By Clive Minchom /

On a state visit to Canada to discuss Canada-Chile mutual economic relations, Sebastian Pinera, President of Chile yesterday held a joint press conference with Stephen Harper Canada’s Prime Minister.

In the press conference he took the opportunity to point out that the company had badly handled the $8.5 million project to date and comply with orders from his country’s environmental regulator, a message that underscores the tough road ahead for the company to get its crucial Pascua-Lama gold project back on track.  The Chilean Regulator has already fined the company for violating its environmental conditions in the construction of the mine.

“The company didn’t comply with all the conditions that were established in that environmental impact assessment, ” Mr. Pinera said during a joint news conference with Prime Minister Stephen Harper. “We have identified 23 areas where they will have to improve their behaviour with respect to the environment in Chile.”

Last week, Chile’s environmental regulator halted development of the gold and silver mine, citing “very serious violations” by Barrick. Reuters reported last week  that the Regulator has indicated it expects it may take up to two years for Barrick to put the proper water management and drainage systems in place to overcome the environmental deficiencies in management of ground water for the project to be successful.
Mr. Pinera said Chile wants Barrick to eventually proceed with its Pascua-Lama mine – as long as it obeys environmental rules: but no more short-cuts.

According to the Toronto Globe and Mail, TD Securities Inc. analyst Greg Barnes forecasts that first production from Pascua-Lama is still possible in late 2015, a significant delay from original expectations for a targeted start in late 2014. But if Barrick were to voluntarily choose to temporarily stop the project until the price of gold recovers, it would be hugely disruptive to the world’s largest gold producer, he said. “It would be expensive to suspend. It would annoy the regulator and the government, and you would lose the momentum on the project.”

Mr. Pinera said he is counting on Barrick to comply with Chile’s “environmental legislation and procedures and standards, ” adding that he hopes “the investment will be able to continue and it will be very important because this is an investment which is done in the high mountains, very close to the frontiers with Chile and Argentina.”

Barrick spokesman Andy Lloyd said Thursday that the company continues to evaluate the regulator’s order and examine “the work required to achieve compliance. Barrick is fully committed to complying with all aspects of project’s environmental permit and to operating at the highest environmental standards.” While Barrick declined to outline the steps required to restart Pascua-Lama’s construction on the Chilean side, the company acknowledged that certain components of the project deviated from construction plans and fell short of requirements for environmental approvals.

The Pascua-Lama mine is so far just a giant construction project, half-built and located in the Andes mountains straddling the Chilean border with Argentina. While work on the Chilean open-pit mine has been suspended for now, construction continues on the processing plant on the Argentine side.

 

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