Chile to fine Barrick over ten new environmental violations

Based on inspections carried out in the last two years, the Superintendence for the Environment (SMA) said, according to local paper Diario Financiero (in Spanish), it was re-opening the case against the Canadian miner. That process ended up in October 2013 with the regulator imposing a $16 million fine over “very serious” violations to the country’s conservational laws, and instructing Barrick to halt the project.

The penalty, the largest-ever imposed in Chile, was revoked a few months later, but only to be re-worked, saying the SMA made a number of “errors and illegalities” when drafting the fine.

Barrick Chile chief executive, Eduardo Flores, said the fresh charges were disheartening, as they further complicate the likelihood of the project resuming construction.

“While in the past we have made mistakes, we took charge and apologized,” he was quoted as saying by El Mostrador (in Spanish).“We’ve been humble and transparent about it (…) We [also] know that restarting the project requires showing that we now have a new and better way to address its challenges.”

What’s next?

After the new amount is determined and the company legally notified, Barrick has the rights to appeal at Chile’s environmental court and, depending on that process, may also file a fresh plea with the Supreme Court.

Construction at Pascua-Lama has been stalled since October 2013 not only because of ongoing legal issues, but also for Barrick’s own reasons. The company mothballed the project after investing $5 billion in it, while facing cost overruns and a falling gold price.

Pascua Lama, which would produce about 800,000 to 850,000 ounces of gold a year in the first full five years of its 25 year life, was scheduled to start production in the second half of 2014.