Barrick Gold Corp has mine construction stopped by Chilean Government

The Chilean government created the Environmental Superintendency recently to make certain that its environmental laws were adhered to. At the end of 2012, the governmental entity began its operations because of the growing concern over the environment in the country.

Last week, the Superintendency, in a prepared statement ordered the Barrick Gold Corp to shut down its entire construction operation as the Pascua-Lama mine project. The project extends from Chile into Argentina through the Andes Mountains.

Besides shutting down the entire operation, the government entity also fined the company $16.4 million. The fine, said the entity, was imposed because Barrick had not fulfilled the requirements set forth in its environmental approval that was granted in 2006.

The government gave Barrick five days to respond and or appeal the fine and stop order. No indication was given by the government as to how long the mine shut down order was to last.

The government ordered the shutdown because of the water Barrick had been using in developing the new mine.

The mine is located in Pascua-Lama at 5,000 meters or approximately 16,400 feet above sea level. Because of the recent fine and changes to the project, the original cost is estimated to increase by at least $500 million said project officials. That would bring the final cost of the mine to over $8.5 billion.

It is estimated that the mine could produce up to 850,000 ounces of silver and gold per year and was on track to be one of Chile’s biggest producers. However, now some have suggested that Barrick cancel their entire plans of developing the mine.