Chile court suspends Goldcorp $3.9 billion El Morro project

Mon Apr 30, 2012 4:04pm EDT
 
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By Alexandra Ulmer and Euan Rocha

SANTIAGO/TORONTO (Reuters) - Chile's Supreme Court suspended a key permit for Canadian miner Goldcorp Inc's El Morro copper-gold project, the latest setback for the controversial project and one of the biggest legal blows to a mining project in the world's top copper producer.

El Morro, Goldcorp's only major asset in Chile, had its environmental permit for the $3.9 billion project struck down in February by an appeals court at the request of an indigenous agricultural community. Chile's Supreme Court upheld the ruling on Friday.

Vancouver-based Goldcorp said it has halted all development work at El Morro in light of the ruling. The project, 70 percent owned by Goldcorp and the remainder held by smaller competitor New Gold Inc, was expected to start being built in September and begin initial production in 2017.

El Morro, planned in Chile's mineral-rich Atacama region, is expected to produce about 200 million pounds of copper a year and over 210,000 ounces of gold for Goldcorp.

Goldcorp already faces a legal challenge from Barrick Gold Corp regarding its ownership of El Morro.

Projects in Chile, which produces a third of the world's copper, are facing increased opposition from social groups that are demanding greater environmental safeguards and a bigger chunk of the country's wealth from the mining boom.

The Supreme Court decision means Goldcorp has to solicit local communities' consent and then submit the entire project to environmental approval all over again, the Supreme Court and Chile's environmental evaluation agency said.

Goldcorp presented its original environmental impact assessment in November 2008 and it was approved in March 2011, according to the environmental evaluation agency's data.   Continued...

 
Goldcorps President & CEO Chuck Jeannes speaks during Reuters Global Mining and Steel Summit in Toronto, Ontario, March 27, 2012. REUTERS/Hyungwon Kang