March 25, 2019 / 7:13 PM / in a year

Chile's Codelco terminates contract with Canada's SNC-Lavalin at Chuquicamata mine

FILE PHOTO: The logo of Codelco, the world's largest copper producer, is seen at their headquarters in downtown Santiago, Chile March 29, 2018. REUTERS/Ivan Alvarado/File Photo

SANTIAGO (Reuters) - Chilean state miner Codelco said on Monday it had terminated its contract with Canadian company SNC-Lavalin Group Inc at its Chuquicamata mine in northern Chile, accusing the engineering firm of failing to comply with its work commitments at the world’s largest open pit mine.

World top copper miner Codelco said the Canadian builder had not met obligations written into a $260 million contract that included engineering, supply and construction of sulphuric acid plants critical to the mine’s copper smelting operation.

SNC-Lavalin won the contract from Codelco to help upgrade the sprawling Chuquicamata copper mine in Chile in 2012, followed by a deal to build the sulphuric acid plants at the mine in 2016. The project has faced mass protests at the mine as the planned overhaul faced delays due to technical issues and rising costs.

The delays led SNC-Lavalin last month to cut its full-year 2019 profit forecast.

SNC Lavalin said last month challenges on the project are mainly due to unexpected site conditions, environmental and safety measures, as well as underperformance from sub-contractors.

Reporting by Fabian Cambero, Dave Sherwood; editing by Grant McCool and Susan Thomas

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