Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
Gold Fields (JSE: GFI)(NYSE: GFI) may see its $1 billion Salares Norte mine in northern Chile affected again after the country’s environmental watchdog (SMA) said there was no certainty the miner had captured and relocated a population of 25 critically endangered chinchillas living in the area, as asked.
The regulator’s latest order, issued late on Wednesday, forces Gold Field to stop activities around the mine plant area. The miner has 10 days to present prove of the absence of chinchillas in the rocky area or may face sanctions.
Chilean authorities stopped the initial rescue operation, launched in 2020, after two of the first four rodents being relocated died shortly after. SMA laid charges against the South African gold producer and asked it to made adjustments to the original plan to guarantee the safety of the remainder short-tailed chinchillas.
The regulator approved the new strategy late last year, and “Operation Chinchilla” resumed in February. Since then, however, Gold Fields has been unable to locate any.
In an operational update earlier this month, the company said the rodents appeared to have left on their own, without any human intervention.
“We have been working with the authorities on the capture and relocation of the chinchillas, and we have gone through the sequencing. And to date we have not captured any,” chief executive Mike Fraser said during the presentation.
“It is quite conceivable that the chinchillas moved on; that’s a plausible scenario,” he added.
Hunted for centuries for their thick, soft pelt, chinchillas are now only found in the wild and are protected by law. Former chief executive Nick Holland acknowledged in 2017 the tiny animals were among the main obstacles for bringing Salares Norte into production.
The relocation of these critters is a key component of Salares Norte’s environmental licence.
According to Gold Fields’ latest estimations, the Salares Norte mine’s mineral reserves are at 3.4 million ounces of gold and almost 42 million ounces of silver.
At current prices of around $2,380 per ounce per gold ounce, the asset is worth roughly $8 billion.
The mine, which cost Gold Fields over $1 billion to build, produced its first gold in late March, as planned. Getting to this point has not been easy, as on top of dealing with the relocation of chinchillas, construction of the mine was hit by increasing costs and the global pandemic.
Felipe Sanchez, head of SMA’s regional office told MINING.COM that the Salares Norte mine, Gold Fields’ newest operation, was constantly being monitored due to its environmental impact on the fauna of Atacama Region’s mountain range, where the gold mine is located.
“This project has a sanctioning procedure that began in December 2021, in which Gold Fields was accused of deficient implementation of rescue measures for the rodents present in rocky areas of the mining licence,” Sanchez said.
The SMA official noted that while the miner was allowed to resume activities in the area to complete the mine on time, the issue of moving the rodents is pending.
Salares Norte, located 4,500m above sea level in an area where winter temperatures can be as low as -20 degrees Celsius, is key to the company’s goal of churning out 2.8 million ounces of gold by 2025.
Production at the mine is expected to reach about 250,000 ounces of gold this year, ramping up to full-year production of 580,000 ounces next year.
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THROWBACK THURSDAY: 25 chinchillas stand between Gold Fields and billions of dollars in gold
