March 25, 2019 / 7:13 PM / 2 months ago

UPDATE 1-Chile's Codelco terminates contract with Canada's SNC-Lavalin at Chuquicamata mine

(Adds context on contract, delays and further details on non-compliance from Codelco)

By Fabian Cambero

SANTIAGO, March 25 (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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