A Chilean Court has ruled that Canadian miner Barrick Gold (TSE:ABX) (NYSE:ABX) did not damage the glaciers located in the area of the Pascua-Lama gold project.
Barrick’s bi-national mine, burrowed in the Andes between Argentina and Chile, has been left idle because of a Chilean Court order until it completes water management work that was not performed as outlined in the conditions of a mining permit.
"We are pleased that the court has confirmed what the technical and scientific evidence demonstrates, that these ice bodies have not been damaged by activities at the Pascua-Lama project," said Barrick's Executive Director for Chile, Eduardo Flores, in a statement released Monday.
The lawsuit was filed in 2012 by residents of the area close to the project and the environmental group OLCA, alleging the risk of a negative impact on the Toro 1, Toro 2 and Esperanza glaciers.
The ‘Second Environmental Court of Santiago’, in Chile, has now ruled that "no damage was done to the glaciers. They have evolved in a similar manner to the ice bodies identified as a reference to monitor the project."
Environmental groups have expressed fears over the potential and unpredictable effects of the project’s mining activity in the glaciers, also denouncing a reduction in water availability for the population. Barrick and its partners have argued that the impact would be small.
The glaciers have to be displaced in order to allow for mining activities. This would involve the use of 27 metric tons of cyanide a day and 33 million litres of water per day to extract gold, threatening to the region’s agriculture and water supply. Barrick had also not hidden the fact that it would use some 38 metric tons of explosives a day to blast mountain tops into rocks.
Residents of the area have opposed the project, also claiming that the firm did not properly consult indigenous communities, which are guaranteed rights by the International Labour Organization (ILO).
Barrick said in a statement that "the Pascua-Lama team has focused on resolving outstanding legal and regulatory barriers" and is committed to working with local communities to advance the project.
"Preserving and protecting glaciers from harm is essential to the work we do every day at Pascua-Lama…That is why Barrick worked with leading independent experts and glaciologists to develop and implement one of the most rigorous glacier monitoring programs anywhere in the world," said Flores.
The resolution of the dispute comes just months after Chile’s environment regulator (SMA) warned in January that it would re-launch a sanction process against the Pascua Lama project, aimed at revoking its mining license.
The SMA, meanwhile, said last week that it would continue to review Barrick’s compliance with the mitigation measures it has been ordered to adopt.
The US$8.5 billion Pascua-Lama project is one of Barrick’s most important and riskiest projects and it was supposed to start operations in 2014. The open pit mining asset is rich in gold, silver, copper and other minerals.
The project is located in the southern reaches of the Atacama Desert, overlapping the border across the Andes between Chile and Argentina at an altitude of over 4,500 metres.
Barrick has estimated that Pascua-Lama contains 17 million ounces of gold and 635 million ounces of silver.
The Pascua Lama gold project was closed in 2013 for environmental breaches on the Chilean side, and the fate of the mega project was put on hold, with the company suffering a US$5.1 billion writedown. Barrick said its team is focused on resolving the outstanding legal and regulatory hurdles at the project, completing a new plan to optimize remaining construction activities and minimize ongoing costs.
The mining minister of Argentina’s San Juan province has indicated that China’s Zijin Mining is interested in the Pascua project after visiting the mine site several times.