SANTIAGO – (Reuters) – A Chilean indigenous group will likely ask the Supreme Court to review a lower court decision on Barrick Gold Corp’s Pascua-Lama gold mine, because the ruling does not go far enough to protect the environment, a lawyer representing the group told Reuters on Thursday.
The appeal will probably also seek a re-evaluation of the suspended $8.5 billion project and ask that Barrick present a new environmental impact assessment study, a potentially lengthy and costly process, the lawyer, Lorenzo Soto, added.
The Copiapo Court of Appeals on Monday ordered a freeze on construction of the project, which straddles the Chile-Argentine border high in the Andes, until the company builds infrastructure to prevent water pollution.
“It’s very likely we appeal the decision,” Soto said. “What we’re interested in is that the project be re-evaluated. What is optimal, in our opinion, is for the project to present a new environmental impact assessment.”
Soto said the decision on whether to appeal would be made on Friday. The Diaguita indigenous group has until Monday to file with the court, he added.
Environmental and social groups say the mega mining project will damage pristine glaciers, strain and pollute water supply and harm agricultural activity in the area.
Barrick declined to comment on a potential appeal by the Diaguita community.
While a copper boom has buoyed Chile’s economic growth, many Chileans feel metal profits haven’t benefited them and that massive mining operations have polluted the environment.
Chile’s environmental regulator suspended Pascua-Lama in May, citing major environmental violations, and asked the Toronto-based miner to build water management canals and drainage systems. The Copiapo court’s orders are broadly in line with the regulator’s requirements, which Barrick has said it is committed to meeting.
Given the Andean country’s complex legal system and new environmental regulator, it is hard to predict what will happen to Pascua-Lama, originally forecast to produce 800,000 to 850,000 ounces of gold per year in its first five years of full production.
But experts agree the world’s top gold miner is facing a protracted legal battle in Chile, where Pascua-Lama is one of the most unpopular mining projects.
“The fact that the Diaguitas won their case unanimously in the Copiapo court sets a complicated precedent (for the project)should the case land in the Supreme Court,” said Juan Carlos Guajardo, head of mining think tank CESCO. “The most serious situation for Pascua-Lama would be to have to do another environmental impact study.”
Chile’s Supreme Court rejected a planned $5 billion Central Castilla thermo-electric power plant last year, citing environmental reasons.
“There could be a big risk there” for Pascua-Lama, said Winston Alburquenque, a natural resources law professor at the Universidad Catolica. But ordering a new study be conducted would be “an extreme” measure for a mega project that is already being built, he stressed.
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