Chile authorizes Barrick gold mining project; bans relocation of glaciers

Chile authorizes Barrick gold mining project; bans relocation of glaciers

by EDUARDO GALLARDO, SANTIAGO, Chile (AP)

15th February 2006

Ambitious plans for an open-pit mine high in the Andes mountains were unanimously approved Wednesday by a Chilean environmental agency, but the project's future remained unclear because the agency rejected its most controversial aspect - relocating three glaciers to reach the gold underneath.

The proposed relocation of the glaciers by Toronto-based Barrick Gold Corp. (TSX:ABX) prompted an outcry by environmentalists and some downstream residents, who worry that the mine could poison the Huasco Valley's rivers - the Pachoi, Huasco and Chollai. Some 6,000 people live in the valley and raise avocado, grapes, olives and other crops, depending on water fed by the glaciers above.

Others in the region want the Pascua Lama mine, saying it would encourage economic development and create jobs.

A spokesman for Barrick, Vince Borg, said the company is "pleased with the decision," which he said was the result of improvements made by the company in a presentation to authorities last December.

"Now, we will take the time to evaluate our next steps," Borg said.

Barrick, the world's largest gold mining company after its recently announced takeover of Placer Dome Inc. (TSX:PDG), has promised to prevent any damage to the surrounding environment.

The company, which refers to the formations as ice masses and not true glaciers, had planned to relocate the ice by truck to reach the gold underneath. It wasn't immediately clear how the $1.5-billion-US project can proceed with the ice untouched.

The vote "clearly prevents any interference with a glacier," said presidential spokesman Osvaldo Puccio. "There will be total protection of the water resources."

Still, small protests broke out after the government's regional environmental commission in Copiapo, 800 kilometres north of Santiago, voted 19-0 to add the restrictions.

The international environmental group Oceana said it would continue opposing the project.

Wednesday's vote can be appealed to the federal government's council of ministers, which means hat the final decision will likely be made by the administration of Chile's incoming president, Michelle Bachelet.

"Of course there will be an appeal," said Mirna Inostrosa, a spokeswoman for Huasco Valley's opponents. "This battle is just beginning."