UPDATE 1-Chile court freezes Glencore hydro project to weigh appeal

Fri Oct 25, 2013 5:01pm EDT
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* Appeals court halts $733 million Cuervo dam

* Opponents cite environmental, geological risks

* Case seen likely to end up in Supreme Court

SANTIAGO, Oct 25 (Reuters) - A Chilean appeals court has preventively blocked a recently approved $733 million hydroelectric dam to weigh an environmental appeal, a surprise setback for owners Origin Energy and Glencore Xstrata PLC.

Opponents of the 640-megawatt Rio Cuervo project planned in the remote southern Aysen region say it would harm the environment and would be built above a geological fault line in highly-seismic Chile.

Lawyers from the environmental prosecutor's office lodged the appeal, claiming the plant's environmental permit granted last month was not legal.

The Coyhaique Court of Appeals agreed to look at their case, and has in the meantime blocked construction of the complex.

The fresh freeze on the project is another blow for energy-strapped miners in copper powerhouse Chile, where unclear rules have allowed environmental and social groups to appeal against projects even after approval, putting in limbo billions of dollars of investment.

If recent history is any guide, the project is likely to eventually up in the Supreme Court.   Continued...