- Barrick Gold (ABX) has settled its long-standing legal battle with Chile’s Environmental Court, regarding the controversial Pascua-Lama project
- Controversy surrounding the project’s impact on the regional glaciers prompted the site’s closure in 2013 and caused Barrick to mark down more than $5 billion in development costs
- In today’s hearing, the court upheld its original closure order and sanctions, which were originally brought against Barrick subsidiary Compañía Minera Nevada
- With a line finally drawn under the court case, Barrick has chosen not to appeal the decision and is continuing to re-evaluate the project, as well as other prospective mining opportunities in Chile and Argentina
- Barrick Gold (ABX) is up 0.79 per cent and is trading at $38.48 per share
Barrick Gold (ABX) has settled its long-standing legal battle with Chile’s Environmental Court, regarding the controversial Pascua-Lama project.
The court upheld its original closure order and sanctions, which were brought against Barrick subsidiary Compañía Minera Nevada back in 2013, forcing the site into care and maintenance.
Barrick first began exploring the project, located in the Andes mountain ranges between Chile and Argentina, back in 1991. By 2006 the mining giant had planned a $1.5-billion development roadmap for the site, with annual production expected to reach 750,000 ounces of gold.
Despite previous prediction, costs began to balloon and in 2012 the company estimated it could require more than $8 billion to bring the site to production.
This was not to eventuate, however, as a report by Argentine non-profit environmental organization CEDHA sparked a grass roots movement to stall the project in its tracks.
The CEDHA report outlined the damage and pollution a potential mining site could wreak on the region’s glaciers. As much of the surrounding communities depend on the glacial waters, the project was seen a threat to water security and environmental due diligence.
Eventually, public pressure surrounding the report brought down a financing deal between Barrick and two major banks. A year later, in 2013, the site development at the site was ceased and a court battle with Chile’s Environmental Court broke out soon thereafter.
Barrick took a $5 billion-dollar write-down from the site closure, triggering a share sell-off it only recently recovered from.
Turning back to the present, Barrick has chosen not to appeal the court’s recent decision and will instead turn its focus to other opportunities in the region.
Speaking on today’s ruling, Marcelo Álvarez, Barrick’s Executive Director for Chile and Argentina said Pascua-Lama remained an important project and work is already under way to re-evaluate its potential.
“Barrick is a very different company since its merger with Randgold and we now have a strong focus on establishing good relations with the communities and authorities
“Barrick sees great potential in a region that has always encouraged the development of sustainable mining projects and is committed to further investment in Chile and Argentina and to building productive partnerships with the government, business associates and communities,” he said.
Barrick Gold is up 0.79 per cent and is trading at $38.48 per share at 1:43pm EDT.