Chile environment permit for Barrick mine was flawed -president

Thu Jun 6, 2013 5:16pm EDT
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SANTIAGO, June 6 (Reuters) - Chile President Sebastian Pinera on Thursday blasted the environmental review process that led to a permit for Barrick Gold Corp's now-suspended $8.5 billion Pascua-Lama gold mine project.

"The environmental permit of 2006 was badly done... you look at it and wonder: how didn't they anticipate all these problems?" Pinera, a conservative president whose term ends next year, told reporters in the La Moneda palace.

In April, a Chilean appeals court halted the project to weigh indigenous communities' claims that Barrick has damaged pristine glaciers and harmed water supplies.

Chile's new environmental regulator then fined and also ordered a suspension of the project in May, citing serious environmental violations.

"They're going to have to meet all requirements and in the meantime works won't be able to go forth," said Pinera, a former airline magnate with a pro-business record.

The mine, which straddles Chile and Argentina, will likely be reactivated in one to two years at the earliest, given the infrastructure that needs to be built to avoid water pollution, Chile's environmental regulator told Reuters on Thursday.

As per its environmental license, Pascua-Lama had to build infrastructure to manage and treat water before launching its pre-stripping operations. But the company had only partially implemented this mitigation system before it started pre-stripping, according to the regulator.

The regulator underlined that defective water canals led to a massive rockslide in January, which affected 1,500 square meters (16,145 square ft) of meadows -- causing "irreparable harm".

Barrick said this week it would delay the mine's startup beyond 2014 and as a result would likely exceed its current project budget of up to $8.5 billion.

The unpopular project has become a key focus of environmental groups in Chile, who have called for a revocation of its permit given the infractions.