Tuesday, April 16, 2013

Barrick in tough at Pascua Lama Mine - Forbes

A Chilean court has suspended work at Barrick Gold Corporation‘s Pascua Lama mine after indigenous communities complained that the project is threatening their water supply and polluting glaciers.
The appeals court in the northern city of Copiapo charged Barrick with environmental irregularities during construction of the mine, which straddles the Chile-Argentina border, and is the highest altitude gold and silver mine in the world.

The company said that it will follow the court’s orders and suspend construction work on the Chilean side of the project while working to address environmental and other regulatory requirements to the satisfaction of the Chilean authorities. The company says that it can still continue construction activities in Argentina, where the majority of Pascua Lama’s critical infrastructure is located, including a process plant and a tailings storage facility.
The total capital expenditure planned for the project now stands at $8-8.5 billion, including a 15-20% contingency on the amount that remains to be spent. The construction is approximately 40% complete and around $4.2 billion has been spent so far.

Before the latest ruling, Pascua Lama was supposed to begin production in the second half of 2014, but now even that seems in doubt. The suspension ordered by the court does not specify a time period for the same so it could be days, weeks or even months before work can resume on the Chilean side.


The Pascua-Lama project is located on the border of Chile and Argentina, in the Frontera district at an elevation of 3,800 to 5,200 meters. The Mine is set to open in 2014, and to produce 850,000 ounces of gold a year. Pascua-Lama has proven and probable reserves of 17.9 million ounces of gold, with 676 million ounces of silver contained within the gold reserves.

The mine will use up to 38 tonnes of explosives a day, 27 tonnes of cyanide and 33 million litres of water to extract the gold.

In 2009, the project was expected to cost $3-billion. Now the final cost is expected to be $8.5-billion.