Chile files sinkhole-related charges against Lundin Mining

Chile’s environmental regulator SMA filed on Thursday four charges against Lundin Mining (TSX: LUN) for a giant sinkhole that appeared in July above an underground copper mine operated by the Canadian miner in the country’s north.

The main infractions are related to extraction of ore beyond the permitted limits and construction outside of environmentally approved zones, the SMA said.

The charges come as the regulator’s regional office concluded an investigation that links the sinkhole on the Alcaparrosa mine’s property with ore overextraction.

“In addition, when the event occurred, large amounts of water began to leak into the mine from places where the company intervened beyond what was considered in the environmental assessment,” SMA’s superintendent Emanuel Ibarra said in the statement.

“In addition, when the event occurred, large amounts of water began to leak into the mine from places where the company intervened beyond what was considered in the environmental assessment,” Ibarra added.

The discovery of the 36.5-metre-diameter (120 feet) crater in Chile’s northern Atacama region grabbed headlines around the world and fuelled speculation about possible causes.

Following the immediate halt of operations at Alcaparrosa, the SMA issued “urgent and transitory” measures while authorities conducted further investigations.

Lundin has said it continues its monitoring and technical analysis in the area to identify the factors that led to the formation of the infamous sinkhole.

‘Very serious‘

The alleged overextraction was labelled as a “serious” infraction while modified mining infrastructure that could cause “irreparable environmental damage” to an aquifer was labeled “very serious.”

The two minor charges were related to infractions in transporting minerals.

The Toronto-based miner owns 80% of the property, while the remaining 20% is held by Japan’s Sumitomo Metal Mining and Sumitomo Corporation.

Sinkholes are pits that form over areas where water gathers underground without external drainage, causing the water to carve out subterranean caverns.

These cavities also form regularly near old and active mines, where large amounts of rock and ore have been extracted, studies have shown.

Sinkholes often form gradually over many years, but can also open quite suddenly, taking cars, homes and streets down with them.

Alcaparrosa is one of two underground mines that make up the Ojos del Salado operation, within Lundin’s Candelaria complex.

The company now has ten working days to appeal the resolution or to present an action plan to address the infractions applying current environmental regulations. If none of these actions are taken, Lundin risks fines equivalent to more than $13 million, closure or having its environmental permit revoked.