Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Chile’s Supreme Court rejected Wednesday a requested permanent shutdown of Barrick Gold Corp.’s (TSX, NYSE:ABX) $8.5bn Pascua Lama project, straddling the border with Argentina, but confirmed the freeze on the suspended project.
Consistent with an earlier decision by the Copiapo Court of Appeals, the ruling requires Barrick to complete Pascua-Lama’s water management system in compliance with the project’s environmental permit to the satisfaction of Chile’s Superintendence of the Environment (SMA) before resuming construction activities in the country.
With the decision, the top court concludes a constitutional rights protection action filed in September 2012 on behalf of four indigenous communities.
But the verdict (in Spanish) also (and literally) leaves the door open for new lawsuits against the Toronto-based miner, as it states that “both the plaintiffs or any individual can initiate (…) actions they deem appropriate [and bring claims before] the authority or the corresponding Environmental Court, either seeking the cancellation of Pascua Lama’s permit or to request an audit to verify the environmental conditions in effect at the time of approving the project, are unchanged.”
In a brief statement Thursday, the company acknowledge the ruling as said it has submitted a plan to Chilean regulatory authorities, which estimates completion of the water management system by the end of next year.
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.
But last June Barrick said the project, on which it has already spent $5.4-billion, will be delayed until mid 2016.
Image by antitezo/Flickr
